ARN have released their financial report for 2024 with a stable outcome for radio and positive for digital.
Highlights:
- Group revenue up +9% and EBITDA up +30%
- Digital listening growth saw the network #1 podcast publisher in 2024 with iHeartRadio now having more than 3 million registered users (+10%)
- Digital audio revenue +28%
- Regional share growth +6%
- ARN commences a 3-year business transformational program (2025-27) to deliver $40m cost out which represent approximately 20% of the cash cost base
Metro revenue was back just over $5 million with the bulk of those losses market related and the Gold Network.
Total regional revenue was flat on 2024 but the regional audience share had improved 6% to 25.4% YoY and +13% since ARN acquired the regional network. Particularly positive is the share of non-digital media advertising for regional ARN stations which was 17.8%, the highest on record.
Digital audio delivered cashflow and EBITDA profitability for H2. Top advertisers for radio and podcasts were retail. Gambling sits at No 2 for podcasts.
Revenue being up 9% can be attributed to Cody HK Tramways and KMB Bus contracts which commence mid this year. People and operating costs were flat compared to guidance of 2-4%.
Chairman Hamish McLennan said:
“We have commenced a business transformation programme that is expected to deliver cost outs of $40 million over 3 years, positioning ARN as the most profitable audio business in Australia. Our strategic priorities are clear – create a digitised audio business that leverages technology and AI to simplify the operating model and create efficiencies, grow audiences by expanding reach and launching new innovative formats and position ARN as the leading ‘All Audio’ commercial platform connecting brands with over 10 million listeners across broadcast, streaming and podcast assets.”
McLennan also addressed the unsuccessful bid for SCA’s radio assets:
“In October 2023, ARN Media and Anchorage Capital Partners (ACP) announced a non-binding indicative offer to acquire 100% of the fully diluted share capital of SCA. However, in May 2024 after due diligence, ACP withdrew its proposal due to the deteriorating performance of SCA’s Regional TV business, the outlook for Regional TV generally, and the existing long-term contractual obligation of SCA to outsource TV transmission.
Notwithstanding ACP’s decision, ARN Media continued to consider the acquisition of certain SCA radio assets, and the combination of ARN Media and SCA digital audio assets, as a unique opportunity to unlock immediate and long-term value creation.
To preserve the opportunity, ARN Media submitted a revised indicative proposal to SCA which the company declined to engage in.
We firmly believe in the strategic merits of this partnership and I share your disappointment on the lack of progress towards a successful conclusion to these discussions that could deliver enhanced value for both sets of shareholders.
Given ongoing pressures from global tech platforms and an outdated regulatory framework, market restructuring remains a priority.
ARN Media continues to assess our options in relation to this matter, and commit to pursuing opportunities to expand its footprint, leverage cost efficiencies and build a multi-platform media business that delivers enhanced shareholder value.”
CEO Ciaran Davis said:
“The audio industry has experienced a dynamic transformation over the past decade, with the pace of change accelerating in the last 12 months. The increasing alignment between advertisers’ adoption of digital formats and audience demand presents significant opportunities for growth. As a Group, we continually evolve to maximise the value of both our advertising partners and listeners, ensuring we remain at the forefront of the industry. While digital content delivery entails higher costs than traditional broadcast radio, we are refining our operating model to drive efficiency, optimise resources and enhance long-term profitability.”
The ARN full year results can be found here: https://investors.arn.com.au/asx-announcements