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Nine's first half upbeat, but shares down

Nine Entertainment has flagged a better-than-expected start to the year, with chief executive Hugh Marks saying ad revenue and market share for the network have both performed well.

Mr Marks has told investors at Nine’s annual general meeting on Monday that the ad market for the first half of 2017/18 had been at the upper end of previous earnings guidance, while good ratings had lifted Nine’s share of the metropolitan TV ad market above 39 per cent, compared to expectations of 37.5 per cent.

The chief executive said premium content introduced at the start of the financial year, including Australian Ninja Warrior, and returning popular shows, such as The Block, were the main drivers behind the network’s successful ratings.

“(The Block) delivered an average audience growth of more than 20 per cent across all demographics and remains one of our most profitable franchises,” Mr Marks said on Monday.

Content and rights would continue to be the major focus for the network throughout the 2018 financial year and would be the key to future success, he said.

Mr Marks said Nine had made “significant inroads” in the past year, not only in its free-to-air sector but also in re-positioning its focus on the evolving $6 billion video advertising market which includes competitors YouTube, Facebook, Apple and Netflix.

“We aren’t blind to the fact that audiences are fragmenting,” Mr Marks said.

“The fact is the media that is on the rise is video and video is the thing that people are consuming.

“This is where Nine’s premium content offers by far the most brand-safe and accountable environment for advertisers.”

While Mr Marks confirmed second-half expectations had not changed, he said full-year earnings were expected to be at the upper end of analyst forecasts of $204 million to $230 million.

“At this stage, in light of the expected revenue share gains in our metro television business and the flow through impact of this to 9Now, it seems likely that group EBITDA will be towards the upper end of this range,” he said.

Nine shares were down 0.25 cents, or 0.17 per cent, at $1.5025 at 1121 AEDT.

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