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HT&E HY22 results: Regional acquisition ‘above expectations’, radio margin builds

Broadcast radio and out-of-home (OOH) firm HT&E has today released its HY22 results, revealing that radio listening is at an ‘all-time high’, giving way to strong shareholder returns and favourable EBITDA.

HT&E, which owns Australian radio company ARN, reported increased group radio revenues of 7% and 11% growth of EBITDA.

Revenue was reported to be up $63.5 million (58%), with a bolstered strong regional performance up 11%.

Revenues from ordinary activities of $172.0 million increased 58% and NPAT before exceptional items of $24.6 million rose 69% on the prior period, driven by the acquisition of 46 regional radio stations from Grant Broadcasters (ARN Regional) completed in January 2022, with the integration tracking ahead of schedule and deliverance of margin expansion.

Commercial radio audiences have reached an all-time high, with 12 million weekly listeners, strong engagement across all demos, and an average of 15 hours and 21 minutes of listening every week. Radio and podcasts accounted for nearly 70% of all listening on audio platforms.

Business costs were up $47.3 million (57%), noted as the consequence of the higher cost of sales on improved revenues, incorporation of incremental digital investment of $8-9 million, and the timing of marketing investments compared to 2021.

ARN Group reported radio revenues up 7%, with digital up 6%.

Earlier this year, ARN restructured its agency sales teams, bringing its metro, regional and digital audio arms into one consolidated sales team and creating a single point of contact for agencies and clients.

Digital billings to customers are up 41%, with strong YoY growth in Q2 after a slow January to February market in Q1.

ARN’s iHeartPodcast Network Australia partnered with fast-growing millennial news outlet The Daily Aus in Q2 for continued audience growth.

Looking forward to the remainder of H2, total radio revenues for Q3 are looking to be up 6-8% on same time last year following a soft July advertising market. Growth is in both metro and regional markets and weighted more toward metro.

HT&E reports that the cost effective nature of radio during inflationary times will deliver more favourable CPMs compared to other mediums and radio’s ease of trading and ability to transact at much shorter lead times will be advantageous in H2.

Full year people and operating cost growth will be limited to 5%, with digital audio investment $1m less than previous guidance, now in the $7-8m range.

For HT&E’s OOH business, Cody Outdoor, improving market conditions experienced in the first half have continued into Q3, with adjusted revenues for the quarter pacing up 15% on the same time last year. The business is expected to be cashflow positive for the year subject to market conditions holding.

HT&E is currently trading at A$1.28 on the ASX, down 2.65% since markets closed with a market capitalisation of 398.20M.

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