Prime Media announces surprise revenue boost but says it can’t be sustained
Prime Media has made a surprise announcement of a huge revenue boost driven by the Olympic Games and changes to the regional broadcasting landscape.
Prime CEO Ian Audsley
On a day when businesses traditionally seek to sneak through bad news under the cover of Melbourne Cup celebrations, Prime sent out a trading update announcing total advertising revenue for the first quarter of the 2016/2017 financial year had jumped 16% despite the regional market being flat.
The rise came across the three aggregated markets served by Prime in NSW and Victoria, with the network’s national agency revenue share peaking at 49.5% according to Standard Media Index data.
The announcement comes just a fortnight after Prime announced it was cutting bonuses and freezing wages in the midst of a “rapid decline” in its market capitalisation.
Prime CEO Ian Audsley hailed the result on the back of the Olympics and changes affiliate agreements with rivals Nine and Ten, but warned that it was unlikely to be sustainable.
“While the first quarter result is encouraging, the combined one-off effect of both the Olympics broadcast in August and our competitors changing affiliations from July 1 has benefited Prime in this quarter,” Audsley said.
“Prime’s forward bookings for October through December are also tracking about prior year levels, however we do not expect the trend to continue for the full year. History tells us that advertisers bring forward their advertising campaign budgets in an Olympic calendar year and as a result we expect a softer second half result.”
He noted that the network continued to suffer a decline in regional viewership (most notably on those aged 25-54) , with an overall decline of 9%.
“Prime expects its core net profit after tax for the half-year to December 31, 2016, to be between $15.3m and $16.3m,” Audsley said.
“However, while it is too early to forecast the full-year result, the company does not expect similar gains in the second half of the 2017 financial year.”
In August the company reported a 17.1% slump in profits, while the company has been lobbying hard for changes to media laws to allow it to merge with a metropolitan network, most likely Seven.
