HT&E’s revenue slips slightly as company says ‘difficult decisions’ are paying off
Here, There and Everywhere (HT&E), the parent company of Australian Radio Network (ARN), has delivered full-year revenue of $252.7m, down 7% from 2018’s $271.8m.
Despite the decline, chairman Hamish McLellan said HT&E is delivering great results in a tough cyclical advertising market, and that its previous “difficult decisions” are paying off.
HT&E’s full-year results (Click to enlarge)
“The company is highly profitable, cash generative with a new lean corporate structure that leaves it poised to capture upside in any recovering ad market,” he said.
“We have made some difficult but correct decisions regarding selling non-core assets and on top of this, the potential sales process for Soprano and Lux Group could deliver substantial uplift for shareholders.”
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was $75.6m, up from 2018’s $71.8m. The net profit after tax (NPAT) before exceptional items and discontinued operations was $38.5m, down from $39.1m. The net loss after tax attributable to HT&E shareholders including the exceptional items and discontinued operations was $14.2m.
CEO and managing director Ciaran Davis contended the market’s challenges were cyclical, rather than a structural and irreversible decline for radio.
“I hope I have called out in the presentation that we firmly believe that this is a challenging, cyclical market that we’re in at the moment. And all media are experiencing that. Radio’s resilience, its growth in audience, continues to accumulate. The [expansion] of digital audio is not growing at the expense of radio… While podcasts have grown – doubled in listenership – in the last 12 months, radio has still grown as well,” he said on the call this morning to investors.
“Talking to agencies and advertisers, the relevance of radio is still as strong as ever… Nobody is saying that this is a structural thing for radio. And in times like these which are challenging, radio’s ability to be immediate, to be effective, to be both a brand builder and a call-to [action] from a retail perspective, they are key strengths that we are in market talking about at the moment, and driving home the advantages of radio.
“So I don’t believe this is a structural thing for a second. And in fact, while we focus on our core radio business very, very strongly, we actually are growing our capability in our digital audio functions around podcasting and streaming. So we see them as being extremely complementary, not just from a listenership perspective, but also from an advertiser perspective. And part of our distribution is to co-promote between radio and digital.”
The company’s commercial strategy, he said to investors, was resonating well with clients and agencies.
ARN has locked in its key on-air talent until at least 2022
“Commercially, the market is challenging, dropping 10% in H2. And if there is a positive from this, then we take some comfort from winning share. We launched a new commercial strategy in H2 that is resonating well with clients and agencies, one that plays to the power of radio advertising, while showcasing our unique digital audio opportunities.”
Davis also said ARN’s proactive approach in locking in on-air talent long-term – including Kyle Sandilands, Jackie ‘O’ Henderson, Amanda Keller and Brendan ‘Jonesy’ Jones in Sydney, and Christian O’Connell in Melbourne – was resonating with audiences and advertisers alike.
“We are also delivering a clear and unique digital strategy providing radio, music streaming and podcasts all on the one platform, iHeartRadio,” he added. “This licence, extended to 2036 on an exclusive basis, gives us an incredible competitive edge that simply cannot be replicated, and augments our investment in data and technology to grow our share of the digital advertising markets,” he said.
Australian Radio Network’s (ARN) performance (Click to enlarge)
Overall, radio contributed $208.4m to HT&E’s total revenue, down 6% from 2018’s $222.3m. The cost of staff and talent grew 4% to $80.9m.
The company spent $4.8m on redundancies, and listed a $13.4m loss on the sale of Unbound, and a further $1.5m for the sale of The Roar.
HT&E sold The Roar to in December last year to Athletes Voice. It also closed Gfinity Esports in August, and shut down its publications Techly and Lost at E Minor in February last year.
The results of HT&E’s strategic review (Click to enlarge)
Over the past couple of years, HT&E has been progressively selling off its non-audio assets, including outdoor street furniture business Adshel in 2018. Agency Emotive, of which HT&E owns 51%, will be retained though, the company said.
