Television write downs hit Southern Cross Austereo’s bottom line

Southern Cross Austereo has reported revenue and profit growth in its first half results, but the group’s bottom line was dragged back by a fall in TV income and a write-down of its television assets.

For the six months to the end of 2018, SCA reported revenue up 0.2% to $335.7m and EBITDA up 2.5% to $82.0m. The group reported a net loss after tax of $119.3m on the back of a $226.9m write down of its regional television network.

SCA’s boss Grant Blackley attributed the improved underlying results to cost discipline and educating advertisers on radio’s advantages

SCA’s television network reported a year-on-year revenue fall of 7.1% to $104m with the company attributing half the $8m decline to Nine’s loss of the 2018-19 cricket rights.

The $226m television write down came as a result of SCA’ separating its regional operations into television and audio divisions.

Radio and podcasting performed well for the group, with the group’s audio division delivering 3.8% growth in revenue to $230.2m and 7.3% growth in EBITDA to $79.1m.

Metro radio, which includes the Triple M and Hit networks, saw revenue grow 6.7% to $123.6M while regional radio revenue was up 0.7% to $95.3m.

The company also reported year-on-year podcast revenue growth of 400%, saying in the ASX announcement that the division’s path to monetisation continues to improve.

Southern Cross Austereo CEO Grant Blackley said in the ASX announcement: “SCA’s strong audio result was driven by continued growth across metro and regional radio and the emerging podcasting sector. SCA outperformed in each sector and strong and disciplined cost controls were evident. Audio revenues grew by 3.8%, while audio expenses grew by just 2.1%.”

“SCA’s unique strategy for aggregating its FM and digital radio station audiences in metro markets continues to provide additional value for advertisers and a sustainable competitive advantage over commercial radio peers.

“The most recent survey in December 2018 showed that SCA’s digital radio stations had 397,000 listeners, providing advertisers with 8.4% greater reach. Coupled with improved ratings, this strategy saw revenues rise 6.7% in metro radio revenue in the half.

“SCA was rewarded during the half for ongoing proactive steps taken to educate national advertisers about the benefits of advertising in regional markets. National revenues for regional radio were up 9.2% on the same period in FY2018 and up 22.0% on the corresponding period in FY2017. SCA’s trade marketing and education campaign will further expand in the coming months.

“PodcastOne has consolidated its position as the leading premium commercial podcast business in Australia and will shortly pass 100 million downloads since launch in August 2017. With commercial interest continuing to grow, the business will now expand into branded podcasts to unlock new revenue opportunities.

“SCA’s new national structure and workforce planning initiatives are starting to pay dividends. The streamlined business and decision-making processes are delivering operating efficiencies and improved cost control.”


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