Here, There & Everywhere (HT&E) is confident it’s proposed sale of Adshel to oOh!media will be approved, separating the outdoor media business from its half-year results.
The group posted a net profit after tax of $13.5 million for the six months to 30 June 2018 – up a whopping 57 per cent compared to the prior corresponding period. However, with Adshel included, HT&E’s profit only rose 17 per cent to $22.5 million.
Overall revenue for the group’s continuing operations was up 10 per cent to $137 million in the first half of 2018, but if Adshel wasn’t being sold, HT&E’s revenue would have only risen one per cent to $234.8 million.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) was up 28 per cent to $30.4 million, led by a solid first half for HT&E’s radio business, Australian Radio Network (ARN). Including Adshel, EBITDA would’ve been up 11 per cent to $51 million.
Looking at Adshel’s half-year performance alone, revenue was down nine per cent to $98.9 million, costs were nine per cent lower to $78.3 million, resulting in an EBITDA of $20.6 million – down seven per cent year on year.
Adshel’s results were driven by the $11.8 million in half-year revenue impact and $8.7 million in costs associated with the loss of the Yarra Trams contract at the end of 2017 to JCDecaux.
In contrast, ARN’s revenue grew 7.3 per cent to $118 million during the first half of 2018, compared to market growth of 5.9 per cent.
Cost growth for the radio business slightly exceeded revenue growth, rising 11 per cent to $80.3 million, while EBITDA was up seven per cent to $37.7 million.
HT&E interim chairman Robert Kaye said it had been an extremely busy and productive six months for the group, culminating in a binding agreement to sell Adshel to oOh!media for $570 million.
“This is an excellent outcome for our shareholders, providing a solid platform of capital management initiatives going forward,” he said.
“What is also particularly pleasing is that the extensive sales process has not distracted management, and they have done an outstanding job delivering on important operational milestones across the business, with the continued improvement in our national radio business a real stand out.
“The investment in content and talent in radio is paying off. ARN’s first-half revenue growth was strong, outperforming the overall market.
“Adshel delivered a solid outcome and while the loss of the Yarra Trams contract in 2017 was disappointing, the work to turn this around has been exceptional, including new contract wins, and the impact on network revenue is less than initially estimated.”
HT&E chief executive and managing director Ciaran Davis added: “We have maintained our position as Australia’s number one radio network and had some significant ratings wins including WSFM in Sydney achieving its best result in 20 years.
“The changes we have implemented across the network have delivered market outperformance for both revenue and agency growth.
“Adshel made significant inroads into reinstating the national digital network, and after the Metro Trains Melbourne assets went live in April, the business saw an immediate uplift in advertiser engagement.
“We are confident that there’ll be further improvement in the second half once digital street furniture conversions start in the Public Transport Victoria contract.