SEG expands across the Tasman after 73% EBITDA growth

Operating growth meets a much larger acquisition

Sports Entertainment Group Limited (ASX:SEG) has paired its strongest operating performance in years with its largest strategic test. The sports media and entertainment company reported a 39% increase in FY26 revenue to A$152.9 million and a 73% rise in underlying EBITDA, calculated before the impact of AASB 16 leases, to A$18.2 million.

The earnings result was supported by a relatively stable cost base, according to the annual report, with management pointing to productivity gains and operating efficiencies across the group. Media remained the main engine, producing A$14.2 million of underlying EBITDA, while television contributed A$2.1 million and complementary services A$3.4 million. Sports teams and head office remained loss-making at the underlying EBITDA level.

The headline operating figures were accompanied by a much less dramatic statutory result. Profit before tax from continuing operations was A$8.6 million, while profit attributable to SEG owners was A$1.84 million, down from A$23.0 million in FY25, a year that included the gain from the Perth Wildcats sale. The group also booked A$7.1 million of income tax expense, producing basic earnings per share of 0.66 cents.

Cash generation funded the trans-Tasman expansion

Cash conversion improved materially. Operating cash flow rose to A$19.0 million from A$8.5 million, cash balances increased to A$24.5 million and senior bank debt fell to A$10.0 million at 30 June 2026. SEG described itself as holding net cash of A$14.5 million relative to senior bank debt, compared with A$1.3 million a year earlier, with its CBA facilities extended to July 2028.

That balance-sheet progress now sits behind the MediaWorks transaction, which the report values at approximately NZ$130 million, or about A$107.5 million. The deal was funded through existing cash, an equity raising that had raised about A$15.5 million and a new CBA debt facility. The chairman and CEO report says the transaction completed on 1 October 2026, although other sections of the annual report describe completion as expected on that date. SEG's filing therefore leaves a small but material reconciliation point around the final completion status and funding mix.

The acquisition had already been supported by a second placement tranche, which raised A$4.75 million at A$0.28 a share and took reported placement proceeds to about A$14.5 million before costs. The annual report now puts the combined group's unaudited September 2026 last-12-month underlying EBITDA at A$42.9 million after identified synergies of A$5 million. That is a management metric, not an audited FY26 result, and its usefulness will depend on how quickly those synergies appear in cash earnings.

Dividend sacrificed as the next phase begins

SEG paid 5 cents a share during FY26, including a 4-cent special dividend linked to the finalisation of the Perth Wildcats sale. It declared no final dividend for the year, explicitly retaining cash for the MediaWorks acquisition. That decision creates a clear trade-off: shareholders receive less immediate income while the group commits capital to a business expected to generate positive EBITDA from its first year under SEG ownership.

The report also highlights a smaller expansion, with SEG acquiring the GIANTS Netball licence from Netball NSW for A$100,000 effective 1 October 2026. The licence is intended to strengthen the group's Sydney and Greater Western Sydney presence, adding to a portfolio that spans radio, digital, television, live events, talent management and team ownership.

SEG says both businesses continued to trade positively in the first quarter of FY27. Australian underlying EBITDA was up 10% on the prior corresponding period, while MediaWorks' last-12-month EBITDA showed monthly growth during the quarter. The next test is less about whether SEG can produce a strong standalone year and more about whether the enlarged group can absorb new debt, integrate MediaWorks and turn its pro forma earnings into recurring operating cash flow.