Metro revenues disappoint but Southern Cross Austereo reports ‘positive momentum’
Impairment costs of almost $74m for regional TV licences saw Southern Cross Austereo report a net profit after tax of $1.4m in year to June, down 98.7% from last year.
Revenue fell 5.3% to $654m, while earnings before interest and tax fell almost 13% to $154.7m.
SCA said its underlying after tax profit dipped 20% to $75m.
But the 2019 financial year has started positively, chief executive Grant Blackley said, with group revenues for July and August up 5% of last year.
SCA reported overall advertising revenue growth of 2.8% in FY18, with its regional business performing well.
Regional radio revenues climbed 4.5%, with regional TV up 3.6%.
National revenues meanwhile grew 15.3%, or $7.9m, aamid efforts to “educate and attract increased investment from national advertisers”.
But metro radio struggled. While the company reported a 1.9% improvement in second half 1.9% – with better survey results and the launch of its digital monetisation strategy behind the increase – it failed to claw back the 3.7% decline in the first half.
Blackley described overall metro performance as “disappointing”, albeit one that improved as the year in the latter part of the financial year.
Blackley: Disappointed with metro performance
Grant Blackley said: “SCA’s regional television assets also performed well with revenues up 3.6% on a like-for-like basis. A significant aspect of this performance was SCA’s premium selling strategy.”
He said a new structure of operations, content, sales, finance and corporate affairs and technology which came into effect on July 1 “have been aligned nationwide”.
“This will enable us to further improve and streamline processes, communication flows and decision making,” Blackley said.
He said SCA has begun the financial year “with positive momentum”.
Blackley cited the launch of Podcastone as a highlight with 45 million downloads since it launched last September.
The net investment in Podcastone of $2m should reduce as revenues climb, he said, adding that the premium, original content would appeal to advertisers.
Blackley said SCA would also step up its bid to encourage brands to advertise in the regions.
While the 9.1m Australians living in regional areas hold 36% of the national buying power, advertisers only direct 9% of their spend “to this substantial community”, he said.
