HT&E revenue falls 22%, but ARN’s recovery well underway

Here, There & Everywhere (HT&E) reported a fall in revenue across 2020, but its core radio operations via Australian Radio Network (ARN) performed ahead of the radio market in each quarter of the financial year ending 31 December 2020.

Revenue fell by 22% to $197.3 million, with underlying earnings before interest, tax, depreciation and amortisation EBITDA down 35% to $49.3 million.

HT&E 2020 Financial Results [click to enlarge]

HT&E chairman, Hamish McLennan, said he was pleased with the way the company got through a tough year. “HT&E navigated the period well and has maintained its strategic focus during the year, strengthening our core Australian radio operations, further investing in digital audio, as well as building further balance sheet strength, providing opportunity in a consolidating market.

“ARN remains the best performing audio company in Australia, both commercially and in ratings, delivering advertisers integrated, unique and engaging content from some of the world’s best talent across radio, music streaming and podcasting.

Profit also took a hit during a heavily COVID-impacted year, with net profit after tax (NPAT) down 52% to $18.5 million in CY20 compared to the prior calendar year.

Net loss after tax attributable to HT&E shareholders including the exceptional items and discontinued operations was $14.2 million.

McLennan pointed to HT&E’s investment in Ooh Media, and Soprano, as areas of current and future value for shareholders respectively, and also spoke of the critical role that JobKeeper played in supporting employees.

“HT&E’s investment in Ooh Media is already delivering value for shareholders, as we paid $18.1 million for a 4.7% stake at the height of the pandemic in the first half, and at year end it was valued at more than double our initial investment,” he said.

“Our investment in Soprano has the potential to provide significant value beyond current book value and is non-core to the company’s strategy. We have appointed Macquarie Capital to explore options to maximise our 25% shareholding.

“Cost control measures were taken early, with $13.0 million in one-off savings in 2020.

“The company was eligible for the initial round of JobKeeper, receiving $10.3 million. The role of JobKeeper was critical in supporting our employees and maintaining momentum through the June quarter, where revenues were back over 46% on the prior corresponding period, and we have been able to steadily build from there.

“Our response to COVID-19 was such that the company did not qualify for JobKeeper in the September quarter.”

He also revealed that HT&E remains committed to reinstating its dividend policy in 2021, after deciding not to declare a final dividend due to “inherent economic uncertainty”.

ARN Financial Performance CY20 [click to enlarge]

In terms of ARN’s performance, the radio network remained the #1 metropolitan network in Australia, and also became the #1 podcast publisher in Australia thanks to the launch of the iHeartRadio Podcast Network Australia in February last year.

ARN’s revenue performed ahead of the market over the duration of CY2020, and by Q4 had almost recovered to the same levels of Q4 in CY2019.

Over the entire year, the radio market fell by 25.2% in revenue. ARN’s radio revenue fell 21% from $208.4 million to $165.1 million, while total revenue was down 22%.

EBITDA down 37% on last year, but digital audio revenues were a shining light, up 122% (after adjusting for non-core disposals).

HT&E CEO and managing director, Ciaran Davis, said: “What we achieved in 2020 demonstrates HT&E’s leadership in the Australian audio market.

“In a year that has rewritten history, Australian audiences have made ARN and iHeartRadio podcast brands the number one choice for audio content, delivering consistency and certainty for our commercial clients.

“I am confident that the momentum that we have built will continue in 2021 as we focus on creating the leading audio entertainment business in Australia.

“Coming out of the pandemic we are in an excellent position to drive shareholder value. We have protected earnings and cash reserves providing a very strong balance sheet and maximum optionality regarding our growth opportunities.”

ARN Performance Compared To Market [click to enlarge]

HT&E also revealed the Q1 outlook for ARN is strong, with continued recovery and current pacing set to see the network finish flat on the prior year. Revenue for January is back just 6.9% on the same period last year, with encouraged early briefing activity for April and Q2.


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