SCA posts $91.395m loss, but revenue from audio on the up

Southern Cross Austereo’s financial results for the 2019 financial year reveal a loss of $91.395m, despite a slight 0.5% revenue increase from the year prior.

Revenue was up to $660m, and in the audio segment of its business – including radio networks such as Triple M and the Hit Network, and podcast operation Podcast One – it was up 2.3% to $453.4m.


SCA’s financial results released this morning (Click to enlarge)

SCA’s television revenues, however, were down 3.2% to $206.558m, and statutory EBITDA (earnings before interest, tax, depreciation and amortisation) for its television operations suffered a 24.3% decline to $25.201m.

SCA’s television results in its investor presentation (Click to enlarge)

The group, however, wrote down $226.9m relating to the value of carrying television licenses, and in the 2020 financial year has sold its remaining broadcast transmission assets and outsourced transmission services.

In the underlying results, which exclude the restructuring costs and significant items related to the sale of the broadcast transmission assets, SCA reported an EBITDA of $33.7m for its television operations, up 1.2% from the year prior.

SCA’s comprehensive financials (Click to enlarge)

Excluding significant items including the impairment related to its television licences, Southern Cross Austereo reported a net profit after tax from ordinary activities of $73.879m, down 0.1% from the figure reported last financial year.

In the 12 months to 30 June 2019, the group also reduced its spend on promotions and marketing by 9.15%, from $18.455m in the 2018 financial year to $16.766m.

CEO Grant Blackley – who took home a total remuneration of $1.869m – said SCA’s audio business was outpacing the market.

“In metro markets, SCA’s audio revenue increased by 4.1%, while the broader radio market declined by 0.5%. SCA’s regional radio revenue grow by 1.5%, boosted by the Boomtown initiative. In both cases, these results were driven by strong growth in national revenues, which were up 9.2% on the prior year,” he said.

Blackley on stage earlier this year at Mumbrella’s Audioland event

“In the metro markets, our Hit and Triple M brands performed consistently in FM and digital radio audience surveys. The decision to aggregate our FM and digital radio reach offers advertisers a unique, simple and scaled value proposition and has reaped rewards. When brands choose to advertise on Hit or Triple M, their advertisements are broadcast in the same day-part on five radio stations in the same location, significantly extending their commercial impact.”

Blackley also sung the praises of Podcast One, saying it had consolidated its position as the leading premium commercial podcast business in Australia. The business arm is expected to reach cashflow breakeven in the second half of the 2020 financial year, he said.

And despite the challenges facing SCA’s television operations, Blackley was also upbeat, saying its television business considerably outperformed the market. Again, the Boomtown initiative – which aims to attract more advertising dollars to regional markets, and re-educate media buyers about the marketing opportunities in regional Australia – was credited with helping to turn things around.

Earlier this year, SCA revamped its logo

“SCA’s national revenue in regional radio and television markets grew by 4.1% compared to the prior year,” he said. “This growth has been driven by targeted initiatives taken by SCA over several years to change the perception among metropolitan media buyers of the value of regional Australia and to increase advertising investment in regional media. In 2019, SCA joined with other regional media companies in the Boomtown joint marketing campaign to accelerate these initiatives.”

Blackley’s closing statements to the market very much indicated that its focus is on its audio output.

“SCA will continue to invest sensibly in ‘front-of-house’ activities: creating compelling content and using our audio assets to help our advertising partners succeed,” he said. “This will include optimising the value of our current radio and podcasting brands, as well as developing new audio products that meet the increasing consumer demand for mobile, personalised, on-demand audio content.

“This will be complemented by a focus on operational excellence in our ‘back of house’ functions, including implementing the recently announced outsourcing of SCA’s television playout and broadcast transmission functions.”


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.