RE:RE:Low liquidity stocks rule Hi whynotpeanut, I would say the entire Broadcast segment has a lot of explaining to do.
The increase investment in content is killing their margins which has never been lower. The company has historically delivered about 35% gross margins which dropped to a low of 28% in the recent financials. Employee costs have risen 6% from the previous year which is no surprise there. Btw, I too get a 25-35 cent increase in profitability from the 240 layoffs expected this year. Let's just hope that revenue and margins do not continue to slide which would negate these cost savings.
Finally, the purchases of goods and services which is mostly audiovisual content also increased by 6% y/y. So we have a declining revenue year with upward pressure on costs due to a greedy economy.
Also, if we're comparing to last year we should also note that the Montreal Canadians did reach the finals last year which was great for ad revenues. A future playoff run could also bode well for Tva sports in that regard. I wish they were more transparent on the profitability of Tva Sports.
The company needs to drop any lower margin business and stabilize their revenue performance going forward. You'd be amazed what just a 1% increase in margins can do to a company delivering about $600m in revenue annually. It can make a huge difference on the bottom line, especially when the market cap is around $100m.