Olympics and cost cutting help Prime Media Group to profits growth

Last year’s Rio Olympic and Paralympic Games helped drive revenues for regional broadcaster Prime Media Group, the company has told the ASX.

The broadcaster – the regional affiliate of Seven – saw its annual EBITDA profits move up from $55m to $64m for the financial year.


However, the company has warned FY18 profits could be down 25-30%, without the benefits of the Rio Olympics and no guarantee that licence fee relief – which all commercial free-to-air television received as a one-off measure this year – will be mad epermanent of media law changes do not go through.

Disruption in regional markets, caused by a broadcasting affiliation deal with Ten and WIN and Nine’s broadcasting rights switch to Southern Cross Austereo, was also flagged as a reason for potential profit decline in the coming year.

In part the company increased its profits by cutting costs. It spent $504,000 on making redundancies.

Ian Audsley, Prime Media Group’s Chief Executive, said the result was “pleasing” given the challenges in the regional television advertising market.

Audsley has warned the company’s trading results for July 2017 are down 10% year on year

“We were able to successfully monetise the 2016 Rio Olympic and Paralympic Games and of course, like all commercial broadcasters, we were beneficiaries of the Federal Government’s use of its regulatory powers to remove licence fees payable as a one-off relief measure,” Audsley said.

Audsley said the company would continue to focus on lowering debt, which was reduced $28.6m year on year.

“Our operating expenses, which were tightly controlled in the difficult revenue environment, are down by 1.8% on the prior year, mainly due to a reduction in employee costs,” Audsley said.

While it was a positive fiscal year for the regional network, Audsley said July 2017 trading results were down 10%, and the remainder of the calendar year would be significantly challenged.

He added: “We have high expectations for the Commonwealth Games in April 2018, but it is too early to forecast.

“The 5.8% decline in the regional television audiences in 2017 financial year highlights top line pressures.

“Given the current limited visibility in the market, we will provide an update in October 2017.”


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