MRN profits plunge, Fairfax Radio revenue down ahead of merger

With the merger between Fairfax and Macquarie Radio Network looming, both companies have released their financial results for the half year ending December 31st 2014.
 

Macquarie Radio Network

MRN made less than a million dollars profit last financial year, with the company’s financial results revealing a 77% drop in Net Profit After Tax to $0.9m.

The substantial drops comes despite a 2% increase in revenue for $29.9m and a core Sydney radio revenue increase of 3.7% on the previous corresponding period.

MRN has put the decline in profit on talent contract renewals, 2CH relaunch costs and Commonwealth Games costs.

Macquarie has chosen not to pay dividends for the half year with Chairman Russel Tate warning of more merger associated costs in the future.

“We will continue, during the second half of FY15, to incur one-off transaction costs to facilitate completion of the merger with Fairfax Radio Network. Immediately following completion, in the last quarter of FY15, we will commence restructuring of the combined group which will also incur significant one-off costs, estimated at between $5 million to $7 million and which are expected to realise sustainable annualised cost synergies in the merged entity estimated to be between $10 to $15 million by 30 June 2016.”

See the Macquarie Radio Network financials below


 

Fairfax

Fairfax Radio experienced a decline in revenue ahead of the proposed merger with MRN, falling 1.5% to $53.7m. 

With industry growth at 5%, Fairfax’s EBITDA declined 4.2% to $8.8m, however like Macquarie, they believe “considerable synergies expected to be delivered in FY16”.

As a whole, Fairfax Media’s NPAT declined to $26.3m, EBITDA declined by 0.6% and revenue declined 12.9%. on the previous corresponding period.

Profit for Fairfax Media is better than projected and as a result, Fairfax will buy back 5% of the company’s stock.

Greg Hywood, CEO of Fairfax Media commented, “Following completion of the Fairfax Radio Network and Macquarie Radio Network merger, expected in late March, Fairfax will own a 54.5% shareholding in an enlarged national radio network including the leading News, Talk and Sport stations in Sydney and Melbourne.

The merger creates a genuine national Talk radio network that was not previously available to advertisers.


 

“Radio has stabilised its performance, with EBITDA down 4% compared to the prior corresponding period. The business will derive both cost and revenue synergies from the merger, with the enlarged entity well positioned in a radio advertising market which continued to gain momentum in the half.”

See the Fairfax Radio financials below.


 

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