Southern Cross Media Group Limited (SCA) today announced its financial results for the year ended 30 June 2020 that showed the radio and TV business still managed to post a profit despite the ravages of CV-19.
SCA recorded EBITDA of $108.2 million for the year, representing an EBITDA margin of 20 per cent. Despite the severe impact of COVID-19 since mid-March, SCA achieved a positive EBITDA contribution in all four quarters.
This included EBITDA of $21 million in the June quarter, compared to an average of $26 million for the preceding three quarters of FY2020.
In a statement, the comany said: “SCA’s balance sheet is robust, with healthy liquidity. The net proceeds of $160.8 million from the equity raising conducted in April remain on balance sheet. Coupled with ongoing strong cash conversion and receivables collection, the equity raising has resulted in historically low net debt of $131.6M and leverage of 1.24x EBITDA.”
Revenue declined by 18.2 per cent in both its radio and television businesses. The impact of COVID-19 on SCA was mitigated by the geographic diversity of SCA’s radio portfolio comprising 10 commercial stations in metro markets and 78 in regional markets. COVID-19 has to date had a lower impact on less densely populated regional markets, while the Boomtown industry trade marketing initiative continues to encourage national advertisers to consider higher investment in regional areas.
PodcastOne Australia grew revenue by 96 per cent to $4.6 million and SCA’s instream (addressable) advertising revenue grew by 112 per cent compared to FY2019.
Expenses (excluding AASB16) of $447.8 million were down $65.8 million or 12.8 per cent on FY2019, driven by significant savings in discretionary spending and employee-related expenses. These reductions are in line with those forecast at the time of the equity raising, including support of $16 million from the Federal Government’s JobKeeper wage subsidy.
Southern Cross Austereo CEO, Grant Blackley, said: “SCA continues to be Australia’s largest audio group, owning and operating 98 FM, AM and DAB+ radio stations around Australia, together with PodcastOne Australia, Australia’s premium commercial podcast network. Next week, we’re excited to be launching SoundCloud Radio on DAB+ in Brisbane, Sydney, Melbourne, Adelaide and Perth. SoundCloud Radio, which will available by live stream all around Australia, will attract a young, highly engaged and influential audience seeking access to new and emerging artists.
“Consumption of audio in Australia, including radio and podcasts, continues to grow. Audio has not only remained a popular companion for people working from home during the COVID-19 lockdowns but is also more accessible than ever through internet-enabled devices such as mobile phones, tablets, desktop computers and smart speakers. SCA’s suite of radio stations, radio and original podcasts and smart news updates is available on all these devices.
“Television remains an important part of our business, delivering EBITDA of $23.9M in FY2020. Under the streamlined operating structure of our Television unit, SCA leverages its core expertise in local and national sales where we maintained a market-leading power ratio – measuring conversion of ratings to revenue – of 1.09 in the four east coast aggregated markets.
“Strategic decisions taken in recent years will enable the business to emerge from the COVID-19 crisis with a lean and efficient operating model focused on recovering the earnings lost in the year just ended. We will continue to build the strength of our radio network by investing in key timeslots and markets. At the same time, we will grow our digital audio ecosystem with premium content, platforms and products attractive to our listeners and advertisers,” Blackley said.