Austereo’s revenue declined by 2.8% to $131 million in the first half of the financial year, compared with the previous corresponding period. Given the tough advertising climate, Austereo’s overall after tax profit figure of $27.6 million is a good sign for the radio industry, down just 0.6% on the previous period. December sales were the best in the six moth reported, and Austereo Chairman Peter Harvie says “there are early signs of regrowth” after the financial crisis.
Costs for the half decreased by 1.9% to $86.5 million, as they continue to be “tightly managed.” The Group recorded an EBIT result of $45.6 million down 4.87% on the previous period. An interim dividend at 4 cents per share was delivered, in line with expectations, with a total of $17.5 million paid in dividends according to the balance sheet.
Speaking to media this morning about the release of the results, Peter Harvie said Austereo’s audiences are up by 150,000 to 4,681,000. The Today network “outperformed the previous half year in sales and that Triple M’s heavier focus on sports content has brought in new clients.” The company retained 100% of its top 40 clients, although it has had to cut rates in some cases. “There is no doubt the competitive nature of the market saw some adjustment of the rates.”
Last November Austereo successfully bid for the greatest share of excess digital radio spectrum, gaining 27.1% nationally in what Harvie describes as “both a defensive and offensive strategy.” The Group now holds 25.0% of all commercial spectrum in Sydney, 19.6% in Melbourne, 42.9% Brisbane, 39.3% Perth and 42.9% Adelaide.
Harvie says the spectrum acquisition opens up “competitive advantages for Austereo, including potential additional digital radio channels and data transmission,” and reflects the strategy of “building the company through new technology directions.” He told reporters that the UK and France plan to mandate the installation of digital radios in all cars made after 2013, and that this will bring another period of growth to digital radio. In Australia over 100,000 digital radios have already been sold.
While new channels are an important factor in the company’s digital radio strategy, Harvie says the future will bring new developments in pictures and data which are not anticipated at this time, and that Austereo will capitalize on those developments when the appear. “Digital radio is not an overnight money spinner, we never sought the spectrum for that reason. This is a long term value add for the industry.”
The company’s online and interactive business “continues to grow at an exceptional rate,” according to Harvie. The Today and Triple M Networks retained their positions as first and second ranking radio websites, respectively, in Australia. Austereo averaged 1.15 million unique online browsers per month, an increase of 34% against the previous period. Video streams grew 196% to 1.3 million a month, while 7.6 million videoclips were viewed, for over10.5 million minutes.Podcasts increased 183% to an average 4.5 million downloads monthly.
Austereo’s social network sites were also in strong growth with Hamish & Andy’s Facebook fan page now reaching over 600,000 and Kyle & Jackie O’s twitter currently with over 300,000 daily followers.
Online is “a chargable component” of the business. “We are not giving it away,” says Harvie. Income from online has increased has increased to 30% in what Harvie describes as a “strong move to cross platform strategy.”
He would not be drawn on speculation that Hamish and Andy may not renew their contracts at the end of this year.
Peter Harvie thanked Michael Anderson for over-twenty years of “distinguished service and his most recent six years as CEO,” and congratulated CEO Guy Dobson on his new role.
In the final Nielsen survey for the half, Austereo held the leading FM positions in Sydney, Melbourne, Adelaide, Perth and second place in Brisbane. The all-people audience increased 0.4% against the previous period. The joint venture stations in Newcastle and Canberra also held first places in their markets and Austereo’s Malaysian relationship “enjoyed continued radio leadership.”
Peter Harvie is now hoping for “a better and brighter year ahead for media.”