Southern Cross Austereo (SCA)‘s AGM was held on Monday November 25, 2024 with group revenue down 1%, net debt $2.5 million and LiSTNR becoming EBITDA positive (profitable), as anticipated, and an increasingly shining light within the SCA stables.
CEO John Kelly said that while shareholders will be aware that SCA fell short of profitability and revenue targets, “our business transformation program has so far permanently removed $30 million from our cost base.”
Radio revenue was down 1.6% to $366.6 million for FY24, regional operations however grew 0.8%. Digital Audio revenue by comparison was up 57% year-on-year for the second half of 2024.
The annual report focused on positives going forward, SCA’s dominance of 25-54 audience share, diversity and inclusion targets to be reached by 2027 and ‘active progression of the divestment of television assets‘. A few clues perhaps as to lineups for 2025 within too. Of Jimmy and Nath, who have been caretaker hosts of 2DayFM Breakfast since August, and Mike E and Emma who then took over National Nights, the report said:
“Both shows are well know to Sydney and national audiences, and we’re looking forward to building on their successes.”
New Chairman Heith Mackay-Cruise said is his statement:
“The most recent financial year was a challenging one for our company. With persistently high inflation and slowing economic conditions, broadcast advertising markets were depressed for much of the year. Group revenue of $499.4 million was 1% below FY23, and underlying group EBITDA of $66.2 million was 14.3% below FY23.
The company recognised a non-cash impairment charge against the value of broadcast radio licences of $228.3 million after tax. The impairment reflects observed market pressures, independent estimates of radio broadcast growth rates showing declines over the forecast period and a consequent reduction in long term growth rates. We also recognised a separate and higher growth digital audio segment for the first time in FY24.
We responded to these challenges with initiatives to transform our operating model to capture a larger share of available revenues while also completing our digitisation capex program and resetting our cost base, and we expect to see the benefits of these actions in future periods.”
No dividend was paid to shareholders, which did not please some investors.
Below is a breakdown of the main revenue areas of the company:
Broadcast Radio
The Broadcast Radio business consists of two complementary radio networks operating across Australian capital cities and regional Australia. Each network’s brands target different audience demographics with the Triple M network skewed towards males in the 25 to 54 age bracket and the Hit Network targeted towards females in the 25 to 54 age bracket.
Total Broadcast radio revenues decreased by 1.6% to $366.6 million.
The Group’s metro radio advertising revenue decreased by 2.7% largely as a result of a 3.1% decline in the overall market. SCA’s average revenue metro market share increased to 27.2% in line with an improvement in audience ratings, which saw consecutive monthly improvements in revenue market share in the second half of the year to June 2024.
The Group’s regional advertising radio revenue increased by 0.7%, due to strong local sales which increased by 4.0%, highlighting the benefit of the Group’s diverse customer base.
Digital Audio
The Digital Audio business consists of the Group’s digital platform, LiSTNR and the digital assets associated with the Radio broadcasting business.
Group Digital Audio revenues increased by 42.2% to $35.0 million driven by strong performance in InStream and Podcast revenue. LiSTNR continued to grow strongly in FY2024, with strong adoption by users attracted to the compelling product and the increasing choice of content. Total listenership of SCA and partner Digital Audio content measured across all digital platforms exceeded 10 million listeners on a monthly basis, and the number of listeners who have signed-up with LiSTNR now exceeds 2 million users. SCA anticipates strong digital audio growth will continue into FY2025.
Revenue related expenses fell from 25.6% of revenue in FY2023 to 21.1% in FY2024 as a result of economies of scale. NRR expenses increased by 7.2% due to strategic investments in revenue-driving technology, notably the implementation of the LiSTNR Customer Data Platform.
The combined impact of strong revenue growth with relatively modest expense increases resulted in a 38.0% reduction in the EBITDA loss to $(10.9) million, with EBITDA breaking even in the last quarter of FY2024.
Television
The Television business consists of 96 regional television licences. Each regional television licence receives programming from a metropolitan television network affiliate. During the financial year the Group received the majority of its programming from the Ten Network in the 3-AGG market, whilst Tasmania, Darwin and Central licence areas received Seven Network programming.
Total Television revenues decreased by 8.6% to $97.5 million, with the advertising markets down 5.3% and SCA’s market share in the 3-AGG market (comprising the Queensland, Southern New South Wales and Victoria television markets) declining largely due to continuing falls in affiliate network ratings and increased competitive pressure particularly in relation to integrated national sales. Revenue related costs decreased in line with the fall in revenue and non-revenue related expenses rose due to CPI-linked broadcast contract costs. As a result EBITDA fell by 28.9%v to $13.3 million.
Click chart to enlarge.
The SCA annual report can be found here.