Southern Cross Austereo has revealed a drop in profits and revenues in the last financial year.
Although on air scandals did have an impact on the company’s metro radio share, the biggest hit came from the poor performance of its regional TV operation.
Revenue for the company was down by 6.5 per cent to $642m and EBITDA profits were down by 6.6 per cent to $210.9m.
However, the company’s regional TV business was down 12.9 per cent to $214.4m. The Southern Cross network has affiliate agreements with Seven and Ten. The fall came mainly as a result of declining ratings for Ten. SCA has a market capitalisation of just over $1bn.
SCA CEO Rhys Holleran said: “TV declines of 12.9 per cent contributed significantly to the falls while radio continues to show its resilience as does local advertising.”
SCA’s main radio networks are Triple M and the Today Network.
A chart in today’s investor presentation makes clear the impact of on air scandals including Kyle Sandilands’ attack on a News Limited journalist and the Royal prank call which led to a British nurse’s suicide. In both cases, the Today Network’s share of advertising revenue dipped significantly.
Click to enlarge | Source: SCA investor presentation
SCA and the Australian Communication and Media Authority are due back in court next month to argue whether the media watchdog is entitled to rule against Today Network’s Sydney radio station 2Day FM over the phone prank incident. If SCA loses, the ACMA could order the station’s licence to be suspended or revoked.
Mr Holleran said on the matter: “We are very confident in our position, and we are very happy with it, we have nothing else to say on it.”
Despite the negative numbers, SCA shares were up about 5 per cent on the ASX in early trading.