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You Are Here: Home » Investment » TV3′s IPO out soon

Investors are going to have an opportunity to buy TV3 shares sometime this year. It will be interesting to see how they respond. Does the purchase of shares hold good attraction as an investment option, especially when the money market is “doing well”? (Investments in money and capital markets have always been such that attractive returns in one market mean unattractive returns in the other).

Presently, the money market in Ghana seems to be drawing investors from the capital market due to the ongoing corrections within it and the relatively attractive interest rates in the money market. However, because money market investments are basically short-term in nature, investors with long-term investment objectives still prefer capital market investment products that are rightly priced – not prone to suffer deterioration through price ­correction in the long run.

TV3, which has been in operation for the last 11 years, is entering an important phase of its growth. The station wants to raise money so it can expand its operations cover the whole of Ghana, replace obsolete equipment with new modern equipment, train people and provide better, superior entertainment. It wants to do even better as a business and pay shareholders decent returns.

So what can investors expect?

The media and entertainment business in Ghana, though growing rapidly, is still nowhere near its full potential. For once, the investor will have the option of a different kind of company to invest in: not a financial institution, a mine or a consumer goods manufacturer, but a television station. As a communication medium, television is second to none. It would be surprising if investors didn’t respond. Ghana’s foremost private free-to-air television network is the most­ watched and preferred channel in the station’s core coverage areas, with its programmes consistently ranking among the top 20 programmes viewed in Ghana. TV3 is liked by viewers because it gives them what they want. The market research says so. Many of its viewers are young people and the overall look of the network suggests that they are a clear target-demographic.

Programme development is vibrant and although better standards can be seen in some areas more than others, TV3 has the look of a modern television network. It is interactive and its people are passionate. It has many good young presenters who are confident. Their programme sets are modern and production standards are high. TV3 certainly has the best television look and variety of programming.

Management is upbeat and in many ways counting down to the day when the share offer opens. They have been working on this for a long time and are keen to execute this transaction, confident that the listing of TV3 will be a success. Investors are expected to embrace the offer if the price is right. This, after all, is a company located within an industry that has good earnings potential. How TV3 fares after this major investment will depend on management’s ability to develop the right business model and see it through.

TV3′s leading position in Ghana today is the result of careful planning and hard work. The network has a solid reputation for delivering entertaining and informative content to its viewers and providing a platform for its advertising clients to reach their target. It continues to thrill its viewers with a rich mix of entertainment including talk shows, reality shows, sports and interview programmes. Their Mentor series, Bands Alive, Ghana’s Most Beautiful, Gang Starz and many more have become household names and viewers are eager for more.

One reason TV3 seems to be getting programming right is that there is an important research component to its activities. Management takes keen interest in monthly television audience and advertising expenditure data from professional research companies and its in-house research team is able to gauge TV3′s strengths and weaknesses, study viewer trends, market trends and advertising trends, and take steps to improve production, marketing, programming and branding.

There is an ongoing effort to understand viewer preferences in order to tailor programming accordingly. The results speak for themselves. Good programming means more “eyeballs”. More “eyeballs” are exactly what advertisers want. TV3 has maintained consistent growth over the last 11 years. Today, the station is leading the market in terms of advertising expenditure and audience share. In 2008 this was consistently between 35-40%.

Throughout 2007, TV3 had the highest advertising expenditure of 36%. This has risen to 40% since August 2008.

The stations financial performance has been impressive. In 1998 revenue totalled GH¢112,500.00. ln 2008, it was in the region of GH¢7,000,000.00. Shareholder funds have more than doubled over the last five years.

So, the prospects are good. Now that the Securities and Exchange Commission has approved the IPO Prospectus and the Ghana Stock Exchange has approved its Listing Application, investors should look out for this share offer.

Source: B&FT

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