A Quick Look at Guardian Media Limited

22 June 2015


150622 GML Logo

 

 

 

Who are Guardian Media Limited?

Guardian Media Limited (GML) is a limited liability company formed in 1917 as the Trinidad Publishing Company. In 2010 the company changed its name to Guardian Media Limited.

GML is a public company operating in Trinidad and Tobago, and is a 51% subsidiary of the ANSA McAL Group. The primary activities of GML are the publication of the Guardian and Sunday Guardian Newspapers, the operation of six radio broadcasting stations, and one television station.

The presentation of financial results in this blog entry

All figures in this blog entry are derived from the financial statements of GML. As such all the figures are -unless otherwise stated- presented in thousands of Trinidad and Tobago dollars.

The income and expenditure account

Looking at the income and expenditure account GML had a mixed year in 2014.  On the positive side the company earned the same level of revenue in 2014 as it achieved in 2013 (a year that contained four elections resulting in significantly boosted advertising revenue).

However higher operating costs in 2014 resulted in a reduction in profit before tax from $58.8m in 2013 to $44.6m in 2014. GML is of the opinion that the costs rose as a direct result of its policy to invest in people and content and will not be repeated in 2015 (see more on this below).

 

150622 GML Graph 1

 

 

 

 

 

 

 

 

 

 

EPS and Dividends per share

Despite a fluctuating EPS over the last five years, GML has maintained a consistent dividend payment, paying 50 cents per share in both 2010 and 2011, 55 cents in 2012 and 60 cents in 2013 and 2014.

150622 GML Graph 2

 

 

 

 

 

 

 

The balance sheet

GML’s balance sheet remains strong. Networking capital amounted to $144.6m in 2014 (2013: $152.1m), and the current ratio is very healthy at 6.06 (2013: 5.28).

GML continues to generate significant amounts of cash from operations with $34.9m being generated in 2014. However this was 34% lower than the level of cash generated in 2013 ($52.0m). Part of the reason for this fall is explained by the investments GML has made during 2014 to attract the best talent and programming available on the market. In 2014 higher operating costs were incurred as a direct consequence of GML making those investments.

As at 31st December 2014 GML continued to maintain strong cash reserves amounting to $110.9m.

Very little gearing in GML

GML carries little third party debt with long term debt representing less than 1% of the total capital employed by the company. Unless GML seeks new financing in the future this will reduce further in 2015 as the lease on the company’s press comes to an end and will be fully repaid during the first quarter of 2015.

A difficult time on the stock market?

GML endured a difficult time on the stock market losing significant value in 2010, 2011, and 2012. However the year-end share price has shown a moderate recovery in 2013 and 2014.

150622 GML Graph 3

 

 

 

 

 

 

 

 

 

A changing of the guard at GML?

On 30th April 2014 Gabriel Faria resigned as Managing Director of Guardian Media Limited. On the 1st May 2014 Lisa Agard was appointed to the position of Chief Executive Officer, and on the 28th May 2014 Lisa Agard was also appointed to the position of Managing Director.

On the 30th June 2014 the Deputy Managing Director and Managing Editor of the Guardian, Dr. Hamid Ghany resigned.

Subsequent to the year end – the first quarter of 2015

GML experienced an excellent first quarter for financial year 2015. Profit before tax for the first quarter amounted to $6.034m, a 32% increase on the corresponding period for 2014.

Other factors to consider

  • 2015 is an election year in Trinidad and Tobago. This will result in increased demand for advertising encompassing all of GML’s business segments – television, radio, and newsprint;
  • In 2014 GML became the first media company in Trinidad and Tobago to launch a digital paper. This digital paper can be linked to client websites, email, and video ads allowing the reader to interact directly with GML’s advertisers. GML discloses that over 50,000 people read the digital version of the Guardian Newspaper, and over 1 million people have accessed its multi-media platform services via the web, social media, or through the use of phone apps;
  • GML is committed to increasing the volume of local content shown on television in Trinidad and Tobago. In this regard GML will be making an investment in a new studio specifically to produce new local content programs;
  • CNC3 news currently runs a close second to its nearest television competitor (effectively 3% behind its nearest rival but within traditional margins of error for surveys). In addition CNC3 airs six of the top ten shows shown domestically in Trinidad and Tobago including the very popular Crime Watch program;
  • All of GML’s television and radio stations operate from fully integrated digital platforms supported by a myriad of social media channels that allows GML to interact with viewers and listeners on a continuous basis;
  • GML has positioned itself to take advantage of high speed internet technologies (including fibre optics) as these become available in Trinidad and Tobago;
  • During 2014 GML invested over $18 million in facilities and new plant and equipment, and close to $6m in the acquisition of a concession to upgrade Radio Trinidad 7.30AM to operate on the FM band;
  • GML places significant focus on investing in people, talent, and content. The company has secured coverage for the Caribbean Premier League Cricket, and the 2018 FIFA World Cup.

 

A word on employee statistics

Unlike many companies that are quoted on the Trinidad and Tobago stock exchange GML does not disclose the number of people it employs. Therefore it has not been possible to calculate metrics using the number of employees as a denominator that have appeared in many of the other entries contained in this blog series.

Supporting analysis

If you’d like to take a look at the key supporting ratios behind our analysis of GML, send us an email and we’ll forward them to you.

Lots more in our blog – BOND PRICES

Please feel free to surf our blog. We cover all types of topics and we love to receive feedback from our readers.

And of course, see below for our usual indicative pricing on sovereign Euro bonds in the Caribbean and LATAM markets. If you see anything you like, give us a call.

 

150622 - Bond Prices 1.v8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

150622 - Bond Prices 2 v2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Next week

Next week we take a look at the Sagicor Financial Corporation.

Firstline Securities Limited offers comprehensive coverage of local and international markets with a bias for the energy sector. Firstline offers a number of unique opportunities to put surplus cash to work either as your asset manager or investment advisor. Please contact us for more details at info@nullfirstlinesecurities.com or at 868.628.1175. We can discuss your investment needs in detail and craft a portfolio that makes sense for you. We look forward to hearing from you.

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