Southern Cross Austereo’s leaner operating model is paying off, with net profit after tax up 59.3 per cent to $32.5M for H1 FY2021.
With a leaner operating model that was introduced last year, SCA managed to lower expenses from $240.6M in H1 2020, to $183.9M this year.
This 23.6 per cent drop in expenses has allowed the company to make meaningful changes to how it operates coming out of the COVID-19 pandemic, said SCA CEO Grant Blackley [pictured].
“We had to take action across the business, like every other company, to fundamentally reimagine where we were,” Blackley told B&T.
“What we weren’t looking to do is necessarily just create a deferral or one-off benefit from all of the actions that we employed.
“Matter of fact, we were looking at not only doing that, but actually creating a lasting positive impact on our operating model, which therefore secured the company, secured our people, and most importantly, gave rise to investing back into the business.”
The results also showed that SCA managed to slash its net debt by half, down from $131.6M this time last year to $66.4M today.
TV leads radio in recovery
The results showed SCA’s television revenues down 11.7 per cent, while audio fell 17.8 per cent.
Blackley explained that this is in line with previous economic crises.
“Like every economic crisis in the last 25 years, you have often seen TV go into that crisis first and you’ve often seen them come out of it first. And we’ve seen that again this time,” he said.
“You’ve often seen radio go in after TV and come out after TV, and that’s occurred as well.”
But with the national advertising market “improving substantially on a quarter-by-quarter basis”, Blackley is confident that SCA is on a path to recovery on the back of its commitment to small businesses.
“What we are seeing is that we have a very strong local market,” he said.
“That SME market is still trailing the national market in terms of its shape of the recovery. Given our exposure to over 19,000 SMEs in 100 markets – probably more than anyone in the marketplace – fundamentally, we have the most to gain in the future.”
A digital future
After launching new curated audio app LiSTNR last week, Blackley confirmed digitisation remains a strong priority for SCA moving forward.
“We are always investing in new smart technology for the business,” he said.
“That makes us fitter and stronger on the way through and it makes us easier to do business with.”
As for LiSTNR itself, Blackley revealed it will be at the core of SCA’s business moving forward.
LiSTNR is the mothership and is firmly in the middle of SCA. So all of our live streaming, podcasting, new music channels, DAB channels, and new news and information shortcasts will all be aggregated within LiSTNR as a central depository.”