Sports Entertainment Group (ASX:SEG) posted a 39% revenue jump and 73% underlying EBITDA growth in FY26, offset by a 93% net profit decline due to tax and one-off impacts. The company is poised for growth with key acquisitions including MediaWorks NZ and the GIANTS Netball license.
- Revenue up 38.7% to $152.9 million
- Underlying EBITDA pre AASB16 rises 73.7% to $18.2 million
- Net profit after tax down 93% to $1.7 million
- MediaWorks NZ acquisition valued at $107.5 million
- GIANTS Netball license acquired for $0.1 million
Strong EBITDA Growth Masks Net Profit Drop
Sports Entertainment Group Limited (ASX:SEG) reported a robust 38.7% increase in revenue to $152.9 million for the year ended 30 June 2026, driving a 73.7% surge in underlying EBITDA pre AASB16 to $18.2 million. However, net profit after tax plunged 93% to just $1.7 million, reflecting significant tax charges and one-off items, including restructuring and M&A expenses. Despite the net profit decline, the company’s core earnings and cash flow generation remain strong, with operating cash flow nearly doubling to $18.9 million.
The EBITDA growth was broad-based, led by the Media segment which grew revenue 14% in a flat market, while TV Production and Complementary Services also expanded significantly. SEG’s fixed cost base and operational efficiencies underpinned margin expansion, setting a solid foundation for future earnings leverage.
Strategic Acquisitions Signal Trans-Tasman Ambitions
In a major strategic move, SEG announced the acquisition of MediaWorks New Zealand for NZ$130 million (approximately AUD$107.5 million), expected to complete on 1 October 2026. The deal, funded through existing cash reserves, a $15.5 million equity raise, and a new $87.6 million senior debt facility with Commonwealth Bank of Australia, will position SEG as a dominant trans-Tasman audio media player with combined pro forma FY26 revenue of $284 million and EBITDA of $36.1 million. The acquisition is anticipated to be EBITDA positive from day one, with identified cost synergies and growth opportunities across Australian and New Zealand markets.
Additionally, SEG secured the super netball license currently operated as GIANTS Netball from Netball NSW for $0.1 million, effective 1 October 2026. This acquisition strengthens SEG’s footprint in the Sydney market and reinforces its commitment to the growth of women's sport in Australia.
Balance Sheet Strength and Capital Management
SEG improved its net cash position to $14.4 million after reducing senior bank debt to $10 million, with the debt facility extended to July 2028. The company’s disciplined capital management included repaying $4.1 million in borrowings and generating strong operating cash flows with a 104% cash conversion rate. Reflecting the cash needs for acquisitions, SEG declared a total dividend of 5 cents per share for FY25 but did not declare a final dividend for FY26.
The company remains compliant with all debt covenants, maintaining a net debt to equity gearing ratio of negative 20.7%, highlighting a robust financial position going into FY27.
Operational Highlights and Segment Performance
SEG’s diversified revenue streams include media advertising, TV production, complementary services, and sports teams. Media advertising revenue reached $73.7 million, TV production $17.9 million, and complementary services $48.9 million. The company’s investment in TV production capabilities, including new studios and mobile broadcast trucks, supports long-term contract wins such as HRV, WNBL, and AFL Media.
SEG’s sports teams segment, which includes Bendigo Spirit, Perth Lynx, and Melbourne Mavericks, reported a modest EBITDA loss but remains a strategic asset for fan engagement. The company divested its interest in the Perth Wildcats in FY25, with no contribution in FY26.
Governance, Remuneration, and Auditor’s Review
The board, led by Chairman Craig Coleman and CEO Craig Hutchison, maintained strong governance with 13 board meetings held during the year. Executive remuneration continues to be linked to performance, with significant bonuses paid in FY26 reflecting the company’s EBITDA growth. The company’s financial statements received an unmodified audit opinion from BDO Audit Pty Ltd, confirming compliance with Australian Accounting Standards and the Corporations Act.
No impairment was recorded on intangible assets in FY26, and the company’s investment portfolio includes unlisted shares in Dabble Sports Pty Ltd and listed shares in Southern Cross Austereo (ASX:SXL) and ARN Media Ltd (ASX:A1N).
What to Watch Next
SEG’s FY27 will be shaped by the integration of MediaWorks NZ and the GIANTS Netball license, along with the company’s ability to capitalise on major sporting events such as the AFL and NRL finals, the FIFA World Cup, and the first-ever NFL game in Melbourne. The pause on dividends signals a focus on debt reduction and investment in growth, with the company targeting a senior debt leverage ratio of 1.2x within two years. How SEG navigates these expansions and maintains its EBITDA momentum amid evolving media consumption trends will be critical for investors.
Bottom Line?
SEG’s strong EBITDA growth and strategic acquisitions set the stage for expanded market presence, but investors should monitor integration risks and the company’s path back to dividend payouts.
Questions in the middle?
- How will SEG integrate MediaWorks NZ to unlock projected synergies and growth?
- Can SEG sustain EBITDA margin expansion amid expanding operations and fixed costs?
- What is the outlook for dividend policy as SEG balances growth investments and debt reduction?