ASX:SXL

Stock Analysis Report

Southern Cross Media Group

Executive Summary

Southern Cross Media Group Limited, together with its subsidiaries, engages in the creation and broadcasting of content on free-to-air commercial radio, television (TV), and online media platforms.

Rewards

Trading at 85.3% below its fair value

Earnings are forecast to grow 13.69% per year

Became profitable this year

Risk Analysis

Has a high level of debt

Dividend of 40.91% is not well covered by earnings

Highly volatile share price over past 3 months

Does not have a meaningful market cap (A$127M)



Snowflake Analysis

Very undervalued average dividend payer.


Similar Companies

Share Price & News

How has Southern Cross Media Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SXL's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-32.7%

SXL

-7.2%

AU Media

0.1%

AU Market


1 Year Return

-85.9%

SXL

-51.7%

AU Media

-22.8%

AU Market

Return vs Industry: SXL underperformed the Australian Media industry which returned -51.7% over the past year.

Return vs Market: SXL underperformed the Australian Market which returned -22.8% over the past year.


Shareholder returns

SXLIndustryMarket
7 Day-32.7%-7.2%0.1%
30 Day-76.9%-47.2%-28.8%
90 Day-80.5%-51.8%-30.1%
1 Year-84.8%-85.9%-49.2%-51.7%-19.4%-22.8%
3 Year-85.6%-88.2%-46.9%-55.4%-9.5%-21.7%
5 Year-78.9%-84.7%-50.8%-64.8%2.1%-20.8%

Price Volatility Vs. Market

How volatile is Southern Cross Media Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Southern Cross Media Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SXL (A$0.17) is trading below our estimate of fair value (A$1.12)

Significantly Below Fair Value: SXL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SXL is good value based on its PE Ratio (2.6x) compared to the Media industry average (14.2x).

PE vs Market: SXL is good value based on its PE Ratio (2.6x) compared to the Australian market (12.6x).


Price to Earnings Growth Ratio

PEG Ratio: SXL is good value based on its PEG Ratio (0.2x)


Price to Book Ratio

PB vs Industry: SXL is good value based on its PB Ratio (0.3x) compared to the AU Media industry average (1x).


Next Steps

Future Growth

How is Southern Cross Media Group forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

13.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SXL's forecast earnings growth (13.7% per year) is above the savings rate (1.1%).

Earnings vs Market: SXL's earnings (13.7% per year) are forecast to grow faster than the Australian market (10% per year).

High Growth Earnings: SXL's earnings are forecast to grow, but not significantly.

Revenue vs Market: SXL's revenue (1% per year) is forecast to grow slower than the Australian market (4.2% per year).

High Growth Revenue: SXL's revenue (1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SXL's Return on Equity is forecast to be low in 3 years time (14.9%).


Next Steps

Past Performance

How has Southern Cross Media Group performed over the past 5 years?

36.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SXL has high quality earnings.

Growing Profit Margin: SXL became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: SXL has become profitable over the past 5 years, growing earnings by 36.1% per year.

Accelerating Growth: SXL has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: SXL has become profitable in the last year, making it difficult to compare its past year earnings growth to the Media industry (-37.7%).


Return on Equity

High ROE: SXL's Return on Equity (11.4%) is considered low.


Next Steps

Financial Health

How is Southern Cross Media Group's financial position?


Financial Position Analysis

Short Term Liabilities: SXL's short term assets (A$149.1M) exceed its short term liabilities (A$81.1M).

Long Term Liabilities: SXL's short term assets (A$149.1M) do not cover its long term liabilities (A$825.6M).


Debt to Equity History and Analysis

Debt Level: SXL's debt to equity ratio (84.9%) is considered high.

Reducing Debt: SXL's debt to equity ratio has increased from 52% to 84.9% over the past 5 years.


Balance Sheet

Inventory Level: SXL has a low level of unsold assets or inventory.

Debt Coverage by Assets: SXL's debt is not covered by short term assets (assets are 0.4x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: SXL is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: SXL is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Southern Cross Media Group's current dividend yield, its reliability and sustainability?

40.91%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SXL's dividend (40.91%) is higher than the bottom 25% of dividend payers in the Australian market (3.37%).

High Dividend: SXL's dividend (40.91%) is in the top 25% of dividend payers in the Australian market (8.57%)


Stability and Growth of Payments

Stable Dividend: SXL's dividend payments have been volatile in the past 10 years.

Growing Dividend: SXL's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (106.5%), SXL's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SXL's dividends in 3 years are forecast to be covered by earnings (77% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.6yrs

Average management tenure


CEO

Grant Blackley (53yo)

4.75s

Tenure

AU$1,869,156

Compensation

Mr. Grant Blackley has been the Chief Executive Officer, Managing Director and Executive Director of Southern Cross Austereo Pty Limited since June 29, 2015. Mr. Blackley has been the Chief Executive Offic ...


CEO Compensation Analysis

Compensation vs Market: Grant's total compensation ($USD1.15M) is above average for companies of similar size in the Australian market ($USD242.11K).

Compensation vs Earnings: Grant's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Grant Blackley
CEO, MD & Executive Director4.75yrsAU$1.87m0.084% A$106.9k
Nick McKechnie
Chief Financial Officer5.5yrsAU$795.94k0.024% A$30.8k
John Kelly
Chief Operating Officer4.08yrsAU$831.75k0.0038% A$4.9k
Stephen Haddad
Chief Technology Officer1.67yrsAU$465.97k0.00098% A$1.2k
Brian Gallagher
Chief Sales Officer4.67yrsAU$764.59k0.0091% A$11.6k
Anthony Hudson
Head of Legal & Corporate Affairs and Company Secretary4.5yrsno datano data
Rochelle Burbury
Manager of Corporate Communicationsno datano datano data
Lynniece Robinson
Secretary of MMILno datano datano data

4.6yrs

Average Tenure

Experienced Management: SXL's management team is considered experienced (4.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Grant Blackley
CEO, MD & Executive Director4.75yrsAU$1.87m0.084% A$106.9k
Peter Bush
Chairman5.08yrsAU$273.00k0.017% A$21.4k
Robert Murray
Non-Executive Director5.5yrsAU$158.50k0.019% A$24.3k
Leon Pasternak
Non-Executive Deputy Chairman & Lead Independent Director 14.5yrsAU$176.00k0.15% A$195.6k
Melanie Victoria Willis
Non-Executive Director3.83yrsAU$170.50k0.019% A$24.5k
Michael Hamer
Independent Chairman of MMIL14.08yrsno datano data
Everard Richards
Independent Deputy Chairman of MMIL14.08yrsno datano data
Glen Boreham
Non-Executive Director5.5yrsAU$163.00k0.023% A$29.1k
Helen Elizabeth Nash
Non-Executive Independent Director4.92yrsAU$179.50k0.014% A$17.3k

5.5yrs

Average Tenure

54.5yo

Average Age

Experienced Board: SXL's board of directors are considered experienced (5.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: SXL insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Southern Cross Media Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Southern Cross Media Group Limited
  • Ticker: SXL
  • Exchange: ASX
  • Founded: 2005
  • Industry: Broadcasting
  • Sector: Media
  • Market Cap: AU$126.887m
  • Shares outstanding: 769.01m
  • Website: https://www.southerncrossaustereo.com.au

Number of Employees


Location

  • Southern Cross Media Group Limited
  • 257 Clarendon Street
  • Level 2
  • South Melbourne
  • Victoria
  • 3205
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
6MMDB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 2006
SXLASX (Australian Securities Exchange)YesOrdinary SharesAUAUDNov 2006
SXLCHIA (Chi-X Australia)YesOrdinary SharesAUAUDNov 2006
SXLCHIA (Chi-X Australia)YesOrdinary SharesAUAUDNov 2006

Biography

Southern Cross Media Group Limited, together with its subsidiaries, engages in the creation and broadcasting of content on free-to-air commercial radio, television (TV), and online media platforms. It operates through two segments, Regional and Metro. The company owns 78 radio stations and 8 digital radio stations across metropolitan and regional Australia, as well as 34 regional radio stations; and broadcasts 86 free to air TV signals in regional Australia primarily under the Nine Network brand. It also provides audio and visual services, including social media, live events, video, online, and mobile assets that deliver national and local entertainment, and news content. The company was formerly known as Macquarie Media Group. Southern Cross Media Group Limited was incorporated in 2005 and is based in South Melbourne, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 10:40
End of Day Share Price2020/03/23 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.