At its annual general meeting ARN Media presented its financial results, showing group revenue rose by 9%, but net profit after tax (NPAT) fell by 59%.
The company made $365.6 million dollars, mostly from its Australian audio business ($307.9 million), with an increased contribution of $47 million from its Hong Kong outdoor advertising business Cody.
ARN Media paid a total dividend for the year to its shareholders of 2.3 cents per share, a payout ratio of 60%.
The company has assets worth $291.4 million and debt of $82.2 million. It has embarked on a “business transformation program” which will cost $40 million over 3 years, to position the audio company to increase its revenue from new audio business opportunities such as podcasts, streaming and other digital offerings.
Significant items:
The company’s expenses figures include the additional cost of the new contract with Kyle and Jackie O, which is worth $20 million per year for ten years, creating a further cut to the company’s profit margin.
Other costs this year were the $5 million spent on the unsuccessful SCA merger bid and the costs of restructuring and redundancies.
Revenue from the recently acquired regional radio stations was 34% of company income. Digital audio revenue, primarily podcasts, was 10% of income, with the potential for further growth. Digital audio revenue grew by 28% this year to $25m, most of the revenue growth in this area was from podcasting.
Another area of potential revenue growth is live radio streaming, which can insert addressible ads targeted by geographic location, time, weather and customer interests. to more closely target client audiences. iHeartRadio now has 3 million registered users using audio streams and podcasts through that platform.
Broadcast radio reaches over 80% of the population and continues to deliver mass market audiences to radio advertisers. For digital formats, online radio streaming has grown by 39% since 2021 and podcasts are now reaching 43% of Australians each month. The company has identified these areas as “new listening behaviours and untapped audience segments.”
ARN now markets a range of offerings in its ‘Audiosphere.’
To refocus to these new audio audience segments and advertsiers, ARN has embarked on a strategy of “reshaping operations, simplifying the way we work, and reinvesting in areas that generate long-term value.”
Those areas are content creation, audience growth, and monetisation. While the strategy is forward looking and investing in future growth, this year’s poor profit figure and low share price (currently about 55 cents) will not please the market.
Three years ago the share price was trading at about $1.70, it is now about 55 cents.
The company’s plan is to develop “big ideas for brands and unlocking powerful capabilities, such as addressable advertising, rich audience insights, programmatic buying, and dynamic creative optimisation.”
All motions for director reappointments, remuneration and the appointment of the auditor were carried at the AGM.
Related article: Reporting from the ARN Annual General Meeting