According to TNS survey, gross expenditures on TV ads increased by CZK 392m in March (+23% y/y), to total CZK 2.07bn. In March, TV stations broadcasted 61 more hours of advertisements compared to the same period last year. TV Nova’s ad hours decreased ad time by 15 hours, while its biggest rival, TV Prima’s ad time increased by 76 hours. TV stations’ share on TV ads (indicated by GRP points) has changed significantly during the year, with adverse development for TV Nova. It’s dominance over TV Prima has shrunk to only 3.3pp over the year from 51.6pp lead last March. TV Nova’s historical low share stands at 45.8% in comparison to TV Prima’s 42.5%. As we previously indicated situation might get worse before it gets better and is in-line with our expectations. These figures also prove the fact that as TV Nova proposed ad price hike this resulted in delays and initial negative reaction from media agencies. We expect 1Q06 figures to be weak (release on May 4, 2006) and any possible weakness might be good opportunity to step into the stock. We reiterate our Buy recommendation for CME.
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