It’s not been a great start for Southern Cross Media Group, the newly merged entity that combines Seven West Media and Southern Cross Austereo.
A poor H1 by Seven West Media has led to a group net profit (after tax) slump of 16.5 per cent, and an earnings (EBITDA) decline of 14.5 per cent.
The results were underpinned by a “frustrating economic and TV advertising environment” that affected the wider TV advertising market.
Nonetheless, SCA’s new board has reacted by taking swift action—removing chief executive Jeff Howard—the former CEO of Seven West Media who assumed the top job of Southern Cross Media Group.
At an investor call announcing the half yearly results, chairman Heith Mackay-Cruise said that Howard’s departure does not reflect a change in strategic vision, but rather a change in execution.
“First and foremost, the strategic intent of bringing these two businesses together to create a multimedia platform offering that still holds true today, and is the core essence of the of the of why we pulled the two businesses together,” he said.
“The key now is accelerating the delivery of that strategy and positioning our group to more quickly realise the benefits of our merger, and that culminated in changes to the leadership team.
“This will include accelerating initiatives to drive revenue and cost synergies and to create new solutions for SCA customers, including through innovative use of data.”
Earlier in the presentation, Mackay-Cruise said that his focus as interim chair was to position SCA to “respond with agility to market opportunities and risks, manage costs effectively and be more results orientated.”
As part of the leadership overhaul, John Kelly, the former Southern Cross Austereo chief who also has decades of experience in TV, has been named interim CEO for TV and radio; previously he was solely responsible for radio.
Interim CFO Toby Potter will become Southern Cross’ chief transformation officer or TV and audio, and Scott Butterworth has been named the full-time CFO.
Kelly said that a key part of his role will be to find group efficiencies across TV, audio, print and digital.
A further $20 million in savings have been planned for the second half of FY26, with a further $30 million for FY27.
A game of contrasting halves
Seven West Media and SCA both produced strong audience gains, but their ability to commercialise these gains into additional revenue has been a point of difference.
Seven West Media reported a 2.7 per cent decline in revenue to $1 billion, a 28.7 per cent drop in EBITDA and a 42.2 per cent slump in net profit (after tax).
These results are in context of a commercial TV advertising market that was back 10 percentage points.
Seven’s Total TV audiences grew by 2.6 per cent, including a 4.3 per cent increase in the 25-54 demo, driven in part by Seven’s coverage of the AFL finals series, The Ashes and BBL.
On the flip side, Southern Cross Austereo’s radio results were positive.
Revenue was up by 3.2 per cent to $216.5 million, EBITDA was up 28.2 per cent and net profit (after tax) soared by 252 per cent.
SCA continues to command the largest metro radio commercial share for 25-54 year olds with 34.3 per cent of the market. Meanwhile LiSTNR signed up users grew from 2.2 million to 2.5 million year on year.
SCA Group forecasts audio revenue to be flat and TV revenue down by 2-3 per cent for Q3.
