Perpetual Equity Investment has bought into HT&E, which operates radio stations KIIS, WSFM, Gold 104.3 and a number of other stations through ARN.
In its August monthly investment update to shareholders, Perpetual Equity says that despite the affect of COVID-19 on advertising revenue for ARN, and the possibility of it being some time before advertising spend returns to pre-pandemic levels, it “…views the sell-off (of HT&E shares) in March as a attractive opportunity to establish a position in HT&E.”
It says that no debt and a cash balance of $90 million gives the company a “very strong balance sheet” and as its radio business is market leading in ratings and revenue it requires very little capital, and in normal market conditions is highly cash generative.
Perpetual Equity says the market is underestimating the value of HT&E, as well as underestimating the value of the company’s 25% share in Soprano Design generated a $75million profit in FY20.
As at 31 August HT&E shares comprised of 2.7% of Perpetual Equity Investment’s portfolio.
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