Edel - Further shift in mix to digital

Edel’s FY19 figures showed flat revenues against FY18, with a dip in profitability. This mostly reflects lower demand and pricing pressure at optimal media, the segment handling physical production and distribution. Increased depreciation following earlier capital investment exacerbated the effect on EBIT, down 25%. The shift in revenue to digital benefits working capital and the reversion of capex to maintenance levels should also help reduce group debt, refinanced post year-end on more favourable terms. The shares trade at a discount to global entertainment content and publishing stocks on historical EV/EBITDA and EV/sales, partly due to limited liquidity.