Macquarie Radio revenue declines as Smart Radio drains profits
Revenues have declined for Macquarie Radio with the network admitting regional network Smart Radio has been a drain on profits despite the continuing dominance of Sydney station 2GB.
Half year financial results for the network show the revenues dropped by seven per cent to $29.4m in the six months to December last year when compared with the corresponding period of 2012.
After the results were released yesterday shares in the company fell 13.6 per cent on the Australian Securities Exchange, dropping from $1.36 to $1.18.
Russell Tate, executive chairman of the Macquarie Radio Network (MRN) said the network was not able to successfully run the regional stations it had bought from the Smart Radio Network in 2011 for $6m.
He said: “We expect that the full year underlying EBITDA will be more than 5 per cent ahead of the prior year. Reported EBITDA levels for the full year are expected to be 15 to 20 per cent below the prior year largely due to the absence of one-off net royalty revenue and the reversal of the provision in relation to the Smart Radio Network in the prior year.”
In Sydney Macquarie’s radio market revenue increased by 2.6 per cent, as ratings share declined from 23.5 per cent to 22.8 per cent with 2GB remaining dominant in the market spearheaded by Alan Jones’ breakfast show.
Underlying EBITDA increased by 10 per cent over the previous corresponding period to $6.4m and underlying net profit after tax (NPAT) increased by 31 per cent to $3.8m.
Interim dividend declared of five cents per share is in line with the previous year and equivalent to the highest dividend paid by the network. It will be payable to shareholders on March 14.
The network has been in discussions with Fairfax Radio about a possible merger, although no deal has been announced as yet.
Yesterday shares in Fairfax Media soared by 20 per cent after its improved profit announcement.
