Southern Cross Austereo has reported a net annual loss of $91.3m, despite a small 0.5 per cent revenue increase on last year to $660.1m.
SCA CEO Grant Blackley said the net loss of $226.9m related to a value loss on television licenses, as well as value loss on its broadcast transmission assets.
Assets in its audio business, however, which include radio networks Triple M and the Hit Network, and Podcast One, were up 2.3 per cent to $453.4m.
The growth comes despite SCA last week announcing the decision to axe its struggling Sydney 2DayFM breakfast show.
Blackley told B&T the decision to scrap the breakfast program followed years of attempting to reach a”substantial and sustainable” result, that the network did not manage to reach.
“Effectively, we have looked at all of the data points. And what’s very clear, is that music is a very strong contributor. It is in fact over 60 per cent of what listeners hear on a radio station every day.”
Blackley said SCA’s data over the last five years shows that the more songs played, the higher the audience share, which is why the broadcaster has extended that format into breakfast and to “create a point of difference between [their] competitors.”
While audio revenue is on the up, TV asset revenue was down 3.2 per cent to $206.56m, with the company’s EBITDA falling 24.3 per cent to $25.2m.
Despite the impairment loss, Blackley was confident that SCA’s audio business was exceeding the rest of the market.
“In the metro markets, our Hit and Triple M brands performed consistently in FM and digital radio audience surveys. The decision to aggregate our FM and digital radio reach offers advertisers a unique, simple and scaled value proposition and has reaped rewards. When brands choose to advertise on Hit or Triple M, their advertisements are broadcast in the same day-part on five radio stations in the same location, significantly extending their commercial impact.”
Blackley was also positive about its television arm of the business, despite its sizeable impairment loss, crediting the turnaround to its Boomtown initiative.
“SCA’s national revenue in regional radio and television markets grew by 4.1 per cent compared to the prior year,” he said.
“This growth has been driven by targeted initiatives taken by SCA over several years to change the perception among metropolitan media buyers of the value of regional Australia and to increase advertising investment in regional media.
“In 2019, SCA joined with other regional media companies in the Boomtown joint marketing campaign to accelerate these initiatives.”
As for the future of SCA, Blackley said it’s all about audio.
“As we go forward, you will see us continually focus on new audio products. As we have done with DAB radio, as we’ve done with Podcast One.
“And over the next 12 months, we are committing $5 million in combined operating and capital costs to develop new audio products because we are determined to continually broaden our influence within audio, which is in perpetually positive territory, with more people listening to more audio every day.”