Optimistic start to the year as UK media companies outperform
the market Q1 2010
The first quarter of 2010 saw the valuation of mid-market media
companies rise by 13.4%, significantly outperforming the FTSE All
Share which saw gains of 5.4% and the FTSE 100 which rose by just
4.9%, according to the latest Media Watch index from financial and
business advisers Grant Thornton.
Since Q1 2009, the 98 UK-listed mid-market media companies*
which form the Media Watch index saw gains of 50.0%. This compares
to a 28.1% increase across the FTSE 100, 31.3% across the FTSE 350
and 31.7% across the FTSE All Share over the same period.
The sub-sector leading the valuations increase is Broadcast and
Entertainment, which saw an average increase of 25.6%** in Q1 2010,
a substantial rise on the 9.5% increase in the previous quarter (Q4
2009).
Mark Henshaw, Head of Media and Entertainment at Grant Thornton
said: "The fate of ITV has undoubtedly helped influence valuations
in the Broadcast and Entertainment sub-sector. The TV giant has
reached a point of stability, having completed the sale of Friends
Reunited for £25m and achieved a return to profitability in 2009
final year results. ITV's new chairman Archie Norman has also
implemented a strategic review to transform the financial and
operational shape of the business over the next five years.
"It is also welcome to see continued deal activity in the
independent television arena. Widely reported in the press this
quarter has been the proposed tie up between RDF Media Group,
previously AIM listed, and Zodiak to create the third largest
television production company in the world. This relays a message
to the market that there are still profitable deals to be made in
the sector and may have sparked new interest in Broadcast and
Entertainment investment. Valuations are more realistic than they
were 12 months ago and this, coupled with the weak pound, means
that UK companies are looking attractive to investors. In addition,
Shed Media announced encouraging results showing continued top line
growth and profitability."
The sub-sector struggling most in Q1's Media Watch index was
Publishing. On average, the value of Publishing companies rose by
only 8.7% in the quarter. This is still an improvement from Q4 2009
which saw values fall by an average of 1.2%.
Mark Henshaw concluded: "Although Publishing saw the smallest
growth of the media sub-sectors this quarter, a return to positive
growth is indicative of the substantial, stable investment that
publishing can still offer to investors, which is attractive in the
current market."
For further information, please contact: Lisa Ritchie, Grant
Thornton Press Office: 020 7728 2208. email: lisa.ritchie@gtuk.com