“Except for Stock Market sentiment, Sportsworld knows of no reason for such a decline and its board continues to be confident that the group will meet market expectations for the year to 30 June,” the company said.
City analysts of the sports and media company have backed the statement. According to the investment bank Dresdner Kleinwort Wasserstein’s (DKW) Leisure & Entertainment, Media and Internet group, the fall in share price “appears” to be driven by the sharp decline in the value of another company in the sector - Television Corporation.
But DKW said that the weakness in the Television Corporation’s share price was “due to stock specific issues (i.e. the sudden departure of its CEO) rather than general market weakness.”
DKW backed Sportsworld Media to meet the forecast 40% growth in earnings per share for next year, adding that sports marketing firms were a better bet that other company’s in the sector who were dependent on advertising revenues.
“We recently met with the CEO of one of the major global sports marketing firms who confirmed that the business was strongly outperforming the traditional advertising dependent units within the group in which the business resides,” Said DKW.
In Sportsworld Media Group’s statement, the company also pointed to the stability of sports marketing revenues compared to ad revenues in the current economic climate.
“Unlike others in the media sector, Sportsworld is not exposed in the same way to the decline of advertising spending and indeed has benefited from the recent trend of
advertisers seeking new avenues of communication, “ the company said.
“ Sportsworld is now uniquely placed to offer brand building through television content creation, event management and sponsorship and has recently shown how this model has worked for clients such as Pepsi, L'Oreal and Adidas.
Sports world also pointed to recent deals with the NBL (National Basketball League of Australia), the WCS (World Cup Skateboarding) and the Seve Ballesteros Trophy as demonstration of Sportsworld's on-going growth into sports related activities.
“The creation of the new UK independent production company Zeal TV has, at the same time, shown Sportsworld's commitment to non-sports content production, “ the company said.
The statement concluded: “The strong growth experienced last year by the group has continued into the current year and, given the good visibility in its business, the board is confident that Sportsworld will continue to progress as expected.”
