Blackley: bullish on radio growth
Southern Cross Austereo has seen a significant upswing in fortunes posting a 25% profit growth according to its results for the first of the financial year.
The radio and regional TV provider posted profits after tax of $43.379m, with revenues up 4.7% to $322m from $307m, with the company bullishly predicting further revenue growth across its metro radio assets, which include FoxFM in Melbourne, 2DayFM in Sydney and the TripleM network.
“These results demonstrate material progress in the operational turnaround of Southern Cross Austereo,” said CEO Grant Blackley in the results release to the ASX (ASX:SXL).
A table showing SCA’s performance in 2015/16
The results are the first from the company since Blackley took the helm and reorganised the sales team.
The company has suffered in the last two years after its top rating Sydney radio station 2DayFM dropped to the bottom of the pile after the defection of Kyle Sandilands and Jackie ‘O’ Henderson to rivals KiisFM.
In recent months the company has brought on new talent including Hamish Blake and Andy Lee for the drive show and Rove McManus and Sam Frost for its 2DayFM breakfast gig.
“We have been heavily investing in our strong radio business, particularly on talent and marketing. We expect to derive increasing benefit from those investments in future periods,” said Blackley.
“We have focussed on monetising all of the group’s assets, improving our commercial market share and yield, while improving efficiency as part of an ongoing review of business functions and non-core assets.”
Similarly the business has been boosted by improved ratings for one of its affiliates the Ten Network, which has led to improved ad sales.
All of the media company’s operations, including its regional TV networks, saw revenue growth according to the release.
In the half year “employee expenses” rose $5m to $89.461m, while the company’s marketing spend actually dropped slightly to $14.967m from $15.507m for the six months to December 2015. Ad revenues grew 4.6% over the period compared to the prior year.
Metro radio revenues grew 6.9% to $121m, although its earnings before interest, tax, depreciation and amortisation dropped from $30.2m to $29.1m, as employee costs grew by $5m.
Regional TV grew 1.9% to $104.3m, while regional radio was up 5% to $188.5m with a combined EBITDA of $64.8m from $58.9m.
Looking forward the company predicted full-year profits after tax of between $75-78m, around 20% up on last year.
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