DCL, the company which owns 3AK and 3MP, recorded a loss of $11,033,000 for the 2001/02 financial year.
The loss includes the write down of intangible assets of $4,029,000 and amortisation expenses of $1,546,000.
According to the company’s annual report: “The results reflect the strategic changes made to the Company over the last year and the consequences of the downturn in the technology and telecommunications sectors. Clearly the year has been a period of rationalisation and re-organisation for which the costs have been brought fully to account in the current period.”
DCL says that several events have “materially impacted on the financial results for the period,” including:
* In July 2001 the Company merged its DataOne business with its telecommunications infrastructure service business, Commcord Communications Pty Ltd. The combined operations were rationalised and rebuilt.
* In September 2001 the Company acquired its second commercial radio-broadcasting license in Melbourne (3MP). The Company’s investment in radio operation has been significant and the rebuilding of the combined 3AK/3MP businesses has consumed a substantial amount of the Company’s resources.
* In April 2002 the company sought to takeover Software Communications Group Pty Ltd so as to be able to conduct a re-organisation of the business units between technology and media between the two companies… The takeover did not complete successfully.
In its annual report to the Stock Exchange DCL is not confident of achieving profit quickly, saying: “On a combined basis the radio assets are not performing to a level where they are generating sufficient cash flow to meet the operating their costs and the radio subsidiary is dependent on the reserves of Data & Commerce Limited to sustain the operations. Ultimately the radio operations will be required to generate a return to the Company and our expectation is for this to happen in the current year. However there are many variables that impact on this expectation and we should be aware that in all likelihood events take longer to come to fruition than what is often planned.”
The Company also says it has “cemented its position in the Melbourne media market, has enjoyed growth in revenue, despite a downturn in media advertising across Australia, and if it is able to continue growing its revenue and containing the operating costs then the future is bright.”
The Company’s outlook for its infrastructure services business, Commcord Communications Pty Ltd have “improved.” … The challenge for the Company is to closely manage the growth of its businesses and deliver on the expectations for profitability.
In its accounts DCL shows Revenues from ordinary activities to be up 71.6% to $6,388,000. Expenses from ordinary activities were $17,387,000, up from $5,170,000 last year.