Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Media sector could offer investor rewards this year, says Numis

Media sector could offer investor rewards this year, says Numis

Media firms have ended the year with plenty of cash and offer investors scope for good returns, reckons City broker Numis.

It comes after a sustained period over the last five years where companies have been reducing debt, says analyst Gareth Davies, which sees the sector "moving up the risk dial" in 2013.

He also envisages a time of greater merger and acquisition activity and consolidation in the sector in the year ahead.

"We are cautiously optimistic on the macroeconomic outlook, and given modest current trading multiples relative to historic norms, underpinned by attractive dividend yields, we believe the sector currently offers a compelling balance of risk/reward," says the analyst.

In broadcasting, he views BSKyB (LON:BSY) and ITV (LON:ITV) as structurally secure, while the agencies are also "structurally robust", he says.

Business to Business (B2B) groups are in good shape, he says, while in business to consumer (B2C) he prefers dual revenue national newspapers to regionals, while he is negative on directories.

The sector also enjoys exposure to fast-growing pure play firms, which are benefitting from the growth of online, he says, citing Blinkx, Perform and Rightmove.

In the professional and educational sub-sector, there continues to be a movement online, says Davies.

"We are cautious on the outlook for education as the industry migrates to a mixed ecology of print and online, and note continued pressure on budgets," he says.

Giles_55af4ddca6481.jpg


Register here to be notified of future ITV Company articles
View full ITV profile

ITV Timeline

Article
August 31 2015

Related Articles

lingo350.jpg
August 28 2015
Lingo Media (CVE:LM; OTC:LMDCF), the technology company focused on the education sector, delivered record results in the second quarter of 2015.
laptop_and_hands.png
February 03 2016
Porta Communications looks to be succeeding in its bid to build a global integrated agency as the group's half year results underlined.
roulette.jpg
March 21 2016
Momentum has continued into the current year, the gaming group added

© Proactive Investors 2016

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.