SCA reports rise in profit and EBITDA amid 15.9% dip in revenue

Southern Cross Media Group Limited (SCA) revealed an improved net profit after tax (NPAT) and EBITDA for the first half of FY21, but reported a slide in revenue of 15.9% to $259.2 million compared to the corresponding reporting period.

In its results presentation, the company reported a 59.3% increase in NPAT to $32.5 million, while EBITDA rose 11.5% to $75.3 million.

SCA also reduced its net debt by half, to reach a “historic” low of $66.4 million.

SCA pointed to pro-active measures driving these positive results, as it moved towards a leaner operating model in 2020 which included $31.9 million in JobKeeper support and a $3.4 million PING grant.

SCA H1 FY21 Results [click to enlarge]

CEO Grant Blackley said a strengthened balance sheet will provide confidence for SCA to invest in new products and services in 2021.

“Advertising markets are continuing to improve towards pre-COVID levels as the economy recovers and government restrictions stablise and ease,” he said.

“Our Q3 revenue is forecast to be between 6% and 8% below the prior corresponding period while costs for the full year will reflect the benefits of the work done over the past few years to restructure our business.”

Revenue from audio dropped by 17.8% to $173.3 million compared to H1 of FY20, but revenue for regional radio grew by 6.8%.

Meanwhile revenue from SCA’s television assets fell 11.7% to $84.9 million.

Blackley said SCA is now “reaping the benefits” of the steps taken to streamline our television business in recent years.

He also said SCA decision to invest in multiple new breakfast shows in 2021 was “critical to unlocking higher audiences, revenue and earnings”.

SCA Operational Results H1 FY21 [click to enlarge]

A significant chunk of its presentation was also spent going over SCA’s ongoing digital transformation, which will be accelerated through the launch of LiSTNR, its new app to house all digital audio assets.

LiSTNR will be monetised, SCA explained, through a growing digital audio revenue base, which delivered 59% year-on-year growth. It has committed to a $5 million investment in H2 FY21 to support the initial launch of the platform.

An increasing supply of inventory will also support the growing market demand for addressable digital advertising, with the digital audio revenue pool growing rapidly.

A two to three year investment horizon is expected for LiSTNR to drive adoption and achieve key targets.

Blackley said: “LiSTNR is at the core of SCA’s digital-first operating model, efficiently deploying smart technology to create, distribute and commercialise our premium content.

“LiSTNR will combine transparent audience measurement with real time insights about listener routines, needs and preferences, enabling advertisers to deliver their brand messages to addressable and targeted audiences at scale.”

SCA Digital Audio Growth [click to enlarge]

SCA revealed it intends to recommence dividends by paying a final dividend for the 2021 financial year.

A final decision on whether a dividend will be paid will be announced upon the release of the full year results in August.


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