Austereo has announced an after-tax profit of $57 million for the last financial year.
The overall result is 12.9% ahead of the previous
year’s result, but has been criticised by some analysts as being “flat” after abnormals are taken into account.
The good result was assisted by the sale of 50 percent
interest in the Newcastle radio operations, but, even without that abnormal item, the after tax profit is still “in line with the previous year’s result.” Radio operating costs were held to 2.7% and a gross operating margin of 34.1% was
recorded. Directors declared a final dividend of 4.51 cents fully franked, an annualised payout ratio of 60% of net profit after tax.
Austereo Executive Chairman, Peter Harvie, said the solid result was achieved in a landscape
of sustained advertising spending decline. “We firmly believe that advertising will return
to more favourable conditions in time, given its vital place in the marketing process. In
view of these conditions and new competition, the Group performed well to hold ground
in audience and sales terms.”
The group has an over 6.5 million listeners. Austereo achieved 44.5% share of the Under 40 audience (ACNielsen Survey 4) and just
under 50% share of radio revenues in its markets.
Group Managing Director, Brad March, said “The competitive
situation demanded a new set of programming and sales strategies and it is pleasing to
note that Austereo adapted well in the changing environment. The group sales were just
one share point away from the previous year, in a period when all capital city commercial
radio revenues declined by 2.3%.”
Austereo’s international radio operations “continued to strengthen. In Malaysia, the five
station joint venture increased sales by 23% to hold an overall sales market share of
over 60%, and now commands an audience of 7,480,000. In Athens, the Austereo
involvement has seen Village 88 FM gain a massive audience increase, with the station
achieving number one audience share. Difficult market conditions have been experienced
by the UK venture, UKRD, but strong programming and sales focus has been applied to
the challenge.”
The radio performance “was complemented by the growth of new non-traditional revenue
streams,” including the successful Rumba concerts. At the same time, each of Austereo’s “complementary businesses” improved in performance. Simon Richards Group, the direct
marketing operation, achieved a significant turnaround on the previous year. mcm
entertainment, the programming syndication company, also turned around operations.
Eye Shop, the mall media operation, increased sales substantially year on year.
Radio “continues to maintain a unique strength with its audiences,” as demonstrated by
recent research released by Commercial Radio Australia which found that radio
accounted for 69% of time spent with all media between 5.00am and 9.00am, and a 77%
share between 9.00am and 4.00pm. “While overall media usage is undergoing change,
Radio continues to evolve and flourish.”
The Company also announced its intention to carry out an on-market buy back
of ordinary shares up to a maximum value of $5,700,000.
Peter Harvie told the stock exchange that market conditions “remain difficult into the new trading year, along
with the effect of new competition. However, when advertising spend conditions improve
Austereo, as market leader, will benefit accordingly.”