Can SEG Maintain Momentum After Divesting Perth Wildcats and NZ Teams?
Sports Entertainment Group upgrades its FY25 EBITDA forecast to $9m-$10m, driven by strategic divestments and new media initiatives, setting the stage for continued growth in FY26.
- FY25 EBITDA guidance raised to $9m-$10m, a 40% increase from FY24
- Positive net cash position expected despite $5.5m special dividend payout
- Divestment of Perth Wildcats and NZ sports teams reduces debt and streamlines operations
- New TV production contracts and digital platform upgrades underpin growth
- Double-digit EBITDA growth forecasted for FY26
Upgraded Financial Outlook
Sports Entertainment Group Limited (SEG) has announced a significant upgrade to its financial guidance for the fiscal year 2025, projecting EBITDA from continuing operations between $9 million and $10 million. This represents at least a 40% increase compared to the $6.5 million EBITDA reported in FY24, signaling robust operational improvements and effective cost management.
Despite distributing a $5.5 million special dividend in October 2024, SEG expects to maintain a positive net cash position. However, this figure excludes a $19 million receivable from the sale of the Perth Wildcats, with payments staggered over the next few years, which investors should monitor closely.
Strategic Divestments and Operational Focus
SEG’s recent divestments of its New Zealand sports teams and the Perth Wildcats have been pivotal in reshaping the company’s financial and operational profile. While the NZ teams were a modest drag on profits, their sale has allowed SEG to reduce debt and return capital to shareholders. These moves align with a broader strategy to focus on complementary services within the sports media and entertainment sector.
Cost governance has also played a crucial role in improving EBITDA margins, reflecting management’s commitment to operational efficiency as the company transitions away from direct sports team ownership towards media production and digital services.
Growth Initiatives Fueling Future Prospects
SEG’s strategic initiatives during FY25 have laid a strong foundation for continued growth. The company has commenced production of Channel 7’s flagship football shows, "The Agenda Setters" and "Unfiltered," and expanded its TV production capacity with a second studio capable of hosting live audiences. Additionally, SEG secured a five-year contract for the TV production rights of Harness Racing Victoria, further diversifying its content portfolio.
On the digital front, SEG launched a revamped website and app featuring enhanced tipping and wagering platforms, aiming to engage audiences more deeply and capture new revenue streams. These developments are expected to contribute to double-digit EBITDA growth in FY26, underscoring the company’s transition into a more scalable and diversified sports media business.
Looking Ahead
With a streamlined cost base and a clear strategic focus, SEG appears well-positioned to capitalize on evolving opportunities in sports entertainment. The company’s ability to sustain growth will depend on execution of its media production contracts and digital platform monetization, alongside prudent management of its receivables and cash flow.
Bottom Line?
SEG’s upgraded guidance and strategic pivot set a promising stage, but execution risks and receivable timing remain key watchpoints.
Questions in the middle?
- How will the staggered receivable payments from the Perth Wildcats sale impact SEG’s liquidity in FY26?
- Can SEG sustain double-digit EBITDA growth amid increasing competition in sports media production?
- What are the long-term implications of divesting sports teams on SEG’s brand and revenue diversification?
