Traditional advertising

Interest results from SXL and OML.

OML with a buyback, earnings uplift, and deleveraging, citing reasonably strong ad volumes.

Southern Cross Media (radio, TV ads) also out with reasonably solid results, citing robust advertising demand.

The key for SXL will be to maintain earnings, in aggregate, from traditional media, whilst funding and growing the digital media presence. That is a touch-and-go proposition, because competition is large and well funded (everything from Netflix to Youtube is a competitor) and everyone wants to secure an audience, which means spending big.

Hence, the worry is SXL pours all the remaining good years of traditional radio revenues into the pit of digital, and never generates a profit.

However, so far, things appear to be going well. In general, the sector is very cheap, with everything from Seven West Media through to Nine entertainment to SXL and OML, discussed here, on cheap headline multiples.

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