Southern Cross Austereo Takes Big Full-Year Profit Hit

After delivering double-digit profit growth in FY17, Southern Cross Austereo (SCA) has seen its fortunes turn around dramatically.

For the 12 months to 30 June 2018, SCA’s net profit after tax (NPAT) was at a measly $1.4 million (down 98.7 per cent), primarily due to a $73.9 million impairment from regional TV licences. SCA’s underlying NPAT was down 19.7 per cent to $75.3 million

Revenue for SCA was down 5.3 per cent to $654.1 million in FY18, with metro revenue down 1.8 per cent to $242.7 million, regional revenue down 6.7 per cent to $393 million and corporate revenue down 17.1 per cent to $18.4 million.

SCA’s earnings before interest, taxes, depreciation and amortisation fell 12.8 per cent to $154.7 million during the 12-month period.

Commenting on the results, SCA chief executive Grant Blackley said the group has taken positive momentum into the new financial year, driven by stronger metro ratings and the launch of its digital monetisation strategy.

“SCA’s unique strategy for monetising its digital radio assets provides a sustainable competitive advantage,” he said.

Aggregation of SCA’s FM and digital radio audiences in the five metro markets has added over 300,000 listeners to SCA’s audience, providing meaningful additional reach and value for advertisers.”

Blackley said SCA’s regional business continues to perform, with regional radio revenues marking a seventh consecutive year of growth with a 4.5 per cent rise.

“This growth was supported by the continued education of national advertisers about our large and growing regional communities and a resulting improvement in their investment in regional markets,” he said.

Blackley also noted the performance of SCA’s regional TV assets, with revenue up 3.6 per cent on a like-for-like basis.

He said the company was also pleased with the success of its podcast business, PodcastOne, which has achieved 45 million downloads since launch in August 2017.

“We maintain a close focus on the efficiency of our operations,” Blackley said.

“Under a new structure implemented from 1 July 2018, our core business functions of operations, content, sales, finance and corporate affairs, and technology have been aligned nationwide.

“This will enable us to further improve and streamline processes, communication flows and decision-making.

“We have also upgraded many of our back-office support systems over the past three years. These investments will lead to better workplace planning, decision-making and effectiveness.”

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