Austereo has announced a net profit of almost $42 million, up 14.4% on last year, in its full year results report to the stock exchange. Earnings per share is 9.97 cents, slightly down on last year, with dividends remaining the same.
Sales revenue was $240.4 million for the 2004 financial year, an increase of $12.8 million against the previous year.
Austereo’s share of advertising revenue in the metropolitan markets continues to exceed 40%, which Chairman, Peter Harvie, describes as “a solid result in the light of the changing radio environment.”
Although the reported net profit is up, when extraordinary activities are taken out, profit for ‘continuing operations’ is slightly down on last year from $43.3 million to the current $41.93 million.
$41.93 million is a good profit in a very competitive year, according to Austereo’s Harvie and Michael Anderson, who have told radioinfo in a media briefing:
“It’s in the upper end of the market forecast… we have maintained strong share in the face of strong competition.”
Harvie congratulated CEO, Michael Anderson, CFO Cathy Grant and Group Programmer Jeff Allis for their part in the profit result.
“The team has conceded little ground in the face of new competition… 32.3% EBITDA puts Austereo amongst the world’s best.
“Audience and Sales shares eased marginally year-on-year, but were nonetheless well-sustained – an encouraging result, given the changing market. Austereo has demonstrated the ability to meet and master the new environment.”
Michael Anderson says Triple M has been the success story this year. “It has been reinvigorated and has achieved what we wanted, Melbourne is number one FM and Sydney is number two FM… in uncertain times we’ve demonstrated our ability to innovate.”
He says Adelaide’s Triple M “is in line with what we anticipated,” and that Perth’s 92.9 “will find itself in a very competitive environment.”
“The Cage, Tough Love and The Shebang are showing great growth.”
Nationally, Austereo held 42% of the under-40 audience and 38.5% of the 25-39 demographic.
“Austereo also clearly led all other competitors in the 25-54 demographic, with a 30.6% share.”
The company’s Joint Venture stations in Canberra and Newcastle “set new sales and profit records for the year.” Strong performances were also recorded in Austereo’s offshore ventures, with the Athens station “improving marginally” with strong revenues, but showing no immediate benefit from the lead up to the Olympics.
Asked about the Today network, Anderson told radioinfo: “The brand is strong… Kyle and Jackie O are doing well in Melbourne, SAFM’s Millie and Lemo are bedding in their new show and we are happy with Fox FM’s new programs.
2DAY in Sydney has seen the bulk of the decline and we have strategies to completely review the product… the brand is strong, but the breakfast show is not connecting with the audience yet. The cycle is usually two years to build a new breakfast show… we are working on it, we have a strategy in mind which should reverse that trend.”
Anderson and Harvie explained that they are pursuing a national strategy with local execution, where each state will adjust its programming strategy for individual markets, something which Austereo has not done much in the past.
Anderson gave the examples of the way Triple M Adelaide has been pitched to an under 30 format, while Triple M Brisbane is chasing an over 30 format. “General Managers can evolve their business plans more independently and flexibly.”
The same strategy has been played out in sales, where different offerings are being developed for clients in different markets. Anderson mentioned the Freq Club as an example of an innovative product – it has delivered 2.8 billion points which have been spent in stores and have been used to retrieve over 100,000 prizes.
The group intends to invest in Research and Development of new revenue streams and program innovations. The coming year will see Austereo go back to on-line internet streaming, get more into SMS interactivity and develop its own music downloads.
While the strategy will include Digital Radio, Michael Anderson says other forms of media are likely to develop quicker that digital radio. Consumers will drive this… digital radio will be part of our strategy, but we will also be working with Telcos, the internet and digital tv to deliver the right mix of products on a range of platforms for the audience and clients.”
Anderson says the networks’ advertising schedules have been mostly full and that “inventory yield management” will be used to “further improve results” in the coming 12 months.
Echoing the sentiments of DMG’s Paul Thompson recently, Austereo is planning “integration” of client messages more closely into programming.
While he would not give specific details of clients who have used integrated advertising recently, he did say there was one client who had achieved a 4 fold increase as a result of integrated advertising. The group is likely to secure a “major retailer and an airline” for integrated advertising deals soon.
“We’ve taken the clients right into what we do on air and also combined with other compatible products to achieve success for them,” says Anderson.
Anderson admitted there is “some downward pressure” on 2DAY’s advertising as a result of falling ratings, while other stations are still achieving success.
The impending election and the prospect of four new DMG stations on air in Austereo markets in the next 12 months means the outlook for 2005 is unclear at this stage, although Austereo is aiming to “maintain our market leadership and continue to roll out creative initiatives.”