Compulsory TV viewing: Watching to see if the new SXL + SWM owners can unlock shareholder value

Research evidence excerpt

Not for redistribution without written consent of Morgan Stanley

M

Idea

August 17, 2026 09:16 PM GMT

Southern Cross Media Group Limited | Asia Pacific

Morgan Stanley Australia Limited+

Andrew McLeod

Equity Analyst

Compulsory TV viewing:

Watching to see if the new SXL

+ SWM owners can unlock

shareholder value

Angela Sutcliffe

Equity Analyst

Southern Cross Media Group Limited (SXL.AX, SXL AU)

Australia Media, Internet and Technology | Australia

What’s Changed

Southern Cross Media Group Limited (SXL.AX)

From

To

Price Target

A$0.65

A$0.50

We keep UW…and lower PT to A$0.50/share. While the

integration of SXL + SWM is running on schedule and the pace

of cost-out is ahead…we don’t believe the combination is the

remedy to the structural decline that lies ahead for this portfolio

of traditional TV/radio/print assets.

Key Takeaways

Assuming the merger was in place for a full 12 months, pro forma group FY26

revenue declined by 4.5%, to A$1,870m.

And pro forma FY26 EBITDA declined 13%, to A$200m (note: a worse 16%

Stock Rating

Industry View

Price target

Shr price, close (Aug 17, 2026)

52-Week Range

Mkt cap, curr (mn)

EV, curr (mn)

Underweight

Attractive

A$0.50

A$0.55

A$0.94-0.51

A$198

A$538

Fiscal Year Ending

06/26 06/27e 06/28e 06/29e

EPS (A$)**

Prior EPS (A$)**

Revenue, net (A$ mn)

EBITDA (A$ mn)

ModelWare net inc (A$

mn)

P/E

Div yld (%)

0.055

0.093

1,108

135

20

0.126

0.087

1,816

184

46

0.121

0.084

1,775

177

44

0.092

1,741

157

34

9.3

5.4

4.3

0.0

4.5

0.0

5.9

0.0

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

** = Based on consensus methodology

e = Morgan Stanley Research estimates

EBITDA decline if TV program cost write-offs are added back).

Looking ahead, positive news is A$30m of merger synergy target has been

realised (one year ahead) with a new target to take out costs of A$145-150m.

Over the next three years (FY26-29E) we forecast new SXL EBITDA CAGR of -7%.

Interesting times at the "new SXL" ... not just because of the SWM merger being

bedded down, but also because of a range of C-suite, senior management, Board and

new personalities on the share register. But, some things remain constant, such as

…