Southern Cross Austereo $284.9m net loss blaming weak TV ad market for poor results
Grant Blackley
Southern Cross Austereo (ASX: SXL) has today posted a net loss for the second year in a row, recording a loss of $284.9m, which was an improvement on last year’s loss of $296m.
SCA’s losses, like Seven and Nine have been driven by writedowns, with net profit after tax also down 18.7 per cent to $64.8m.
New CEO Grant Blackley acknowledged what he described as a “disappointing” financial result but noted the TV and radio broadcaster was implementing new strategies to turn the result around.
“The full year FY 2015 results reflect a weaker television advertising market and a reduced, but stabilised metro radio market share,” said Blackley.
“Whilst the financial results have been disappointing, I am excited by the opportunities that the group presents and have begun implementing a number of strategic and operational initiatives that are focussed not only on delivering short term improvements in financial performance, but positioning Southern Cross Austereo for long term success.”
Source: SCA investor presentation
SCA’s revenues were down 4.6 per cent to $611.1m while earnings before interest, tax, depreciation and amortisation (EBITDA) was down 13.1 per cent to $163.2m.
Regional revenue was down 0.4 per cent year on year to $361.6m, with metro revenue also down 9.9 per cent year on year to $224.1m.
In regional, TV dropped by 2.9 per cent to $202.3m for the year, down from last year’s revenue of $208.4m.
Radio did better in the regional markets, up by 3 per cent from $154.7m to $159.3m in revenue.
In the metro markets, radio revenue was down by 9.9 per cent from $248.7m to $224.1m.
Oh Dear
There is work to be done……
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So SCA’s metro radio business is now by far the least profitable of all the networks with an EBITD of $57m (down 21%). and this is with more radio stations than the competitors.
After having to sit through one of the most ego driven interviews with a couple of their junior programmers talking about how amazing everything is after the last survey, these results should be a sign that these people need to tuck their heads back in and present themselves in a way that gives their shareholders some confidence, rather than a declining bank balance and a feeling of embarresment
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lets not forget on SCA, NEC & SWM and all other media – that with no federal election in 2015 there is a lot of money out of market.
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I would expect them to cost cut immediately but unfortunately like the MRN / Fairfax merger it will result in staff redundancies and more efficiencies in programming and syndication from local markets.
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SCA shareholders would be appalled at the mishandling of the sales inventory in their markets. Talk about dropping their pants and messing up the yield. @Beancounter thinks the programmers are cocky, the sales team used to be when things were going swimmingly. diferent now.
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Old sales guy. As a client in the past and nowadays first of all the sales people were never cocky, confident about their product is how I saw it just like any media, and with the diminution of ratings they are providing clients value for money with ratings loss. Dropping your pants no have not seen.
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