Macquarie Radio warns of 65% profit drop
Macquarie Radio says it expects to report a 65 per cent drop in net profit after tax for the half year ended December 31, with the network saying revenue gains were outweighed by operating cost increases.
The news comes as the Australian Consumer and Competition Commission conducts an informal investigation into its proposed merger with Fairfax Radio.
In a company update submitted to the ASX Macquarie Radio advised it expects to report a 25 per cent drop in underlying earnings, interest, tax, depreciation and amortisation (EBITDA) for the half year.
MRN executive chairman Russell Tate said revenue gains of 3.7 per cent from Sydney radio operations were outweighed by operating cost increases, particularly from costs associated with the relaunch of 2CH, costs associated with restructuring of the company’s sales force, talent contract renewals and increases in administration costs.
Contract renewal costs potentially relate to the contract extension of of Alan Jones, who reportedly is paid an annual salary of more than $4m. He extended his contract in December taking his term up to June 2017.
Tate also noted that costs increases in part reflected the company’s focus during the period around the merger proposal with Fairfax Radio.
Macquarie Radio is scheduled to announce its half year results for the period ended December 31, 2014, on February 18.
Miranda Ward worked for Mumbrella from 2013 to 2017, eventually becoming deputy editor. Miranda joined Mumbrella in September 2013 from Sky News.
Linkedin
If the No 1 station is having a profit fall, imagine the others
User ID not verified.
Astonishing value destruction at Fairfax as we see the past haunt them. While we all know they passed up on REA and Seek, few notice the splurges on various dud web “investments” and of course radio (which they actually knew was a dud at the time).
User ID not verified.
Unfortunately for MRN the number 1 position has never really translated into share of agency dollars so a downgrade may not signal trouble for other radio networks.
User ID not verified.