Southern Cross Media Group reported a 24.4% decline in revenue to $34.7m in its half yearly financial results ending 31st December 2014.
EBITDA declined 18.3% to $85.3m, an amount that falls within the 18%-20% predicted range given by SCA in October.
Group revenue declined by 7.3% to $307.6m and net debt declined to $573m, within the company’s debt covenants.
Rhys Holleran, CEO of SCA commented in the live feed of the AGM: “The first half results for FY 2015 reflect challenging conditions in television advertising markets and a reduced metro radio market share.
“In 2015, we are strengthened by the talent line ups in metro radio and are confident that the strategic direction of the company and the focus on debt reduction will put the company in a sound position to improve over this financial year and the next.”
In the company’s shareholder presentation Holleran said: “Local television has been a standout. Costs were down for the half, a good result given our increased marketing and more importantly, we have signed 2 flagship drive shows, for Triple M and the Today Network.”
Regional Radio revenues are 71% local, “a traditionally less volatile revenue stream,” but Metro Radio Revenues were hit by a decline of 33% in revenue for Today’s Hit Network. Revenues for the Metro Triple M Network, by contrast, rose 8%.
Southern Cross Austereo is focussed on delivering a content led recovery, with the refresh of Today’s Hit Network being completed in January 2015, Dan & Maz moving to breakfast on Hit 104.1 2Day in Sydney from January 2015, and Hamish & Andy returning to national drive from July 2015.
Key content highlights of the Group for the half include:
•Regional radio revenues growing year on year, highlighting the resilience of the business
•Today’s Hit Network – number 1 breakfast and drive shows in Melbourne, Brisbane and Perth for females under 40
•Triple M – number 1 breakfast shows in all markets for men 25-54
•Channel 10 audience share continues to improve – second straight half of audience share improvement
The company has also announced it has taken out $320 million in new interest rate swaps commencing April 2015 and maturing January 2018. Net finance costs for FY 2015 are expected to be around $39 million, and net finance costs for FY 2016 expected to be in the range of $32 – $34 million.
The share market approved of the results and the announcement of the new chairman, with Southern Cross Media shares rising from 94 cents to a high today of $1.10 per share (chart right), a new monthly high.
Southern Cross Media Group also announced Peter Bush as the new Chairman and Non-Executive Independent Director of the company.
Bush will bring his experience in public company directorship and executive roles spanning the media, FMCG and consumer product sectors.
He is currently Chairman of Pacific Brands, Chairman of Mantra Group and has served on the board of Nine Entertainment Holdings, Insurance Australia Group, Miranda Wines, McDonalds Australia and Lion Nathan.
The appointment of Peter Bush ensures that the Board now consists of a clear majority of independent members.
Bush said “Media is undoubtedly one of the most dynamic of all industries, made more so by the range of challenges and opportunities prevailing today – there is just so much going on. Souther Cross Media Group is extremely well situated to meet both the challenges and opportunities, making this role just too good to refuse”.
Outgoing Chairman Mr Moore-Wilton said “It is a pleasure to hand over to a new Chairman of Peter’s experience and capability. I am confident that he will guide the Board and management in delivering value for shareholders.”
The new board is made up of:
Key highlights from the shareholder presentation include:
It's time go Rhys.
The company has a hangover of debt.
I'm disappointed but nowhere near surprised as a shareholder.