Southern Cross Media profit improves in half year results

Southern Cross Media has announced its financial results for the half year ending December 31st 2013.

CEO Rhys Holleran confirmed that the reported net profit of the group has improved 1.8%, to a reported NPAT of $45.9 million for the Southern Cross Media Group.

Key highlights include:

  • Underlying or core net profit after tax up 1.1% to $47.2 million
  • Revenue up 1.8% on an underlying basis
  • Successful refinancing of $650 million debt facility on more favourable terms
  • Interm dividend payout ratio maintained in the 60-70% range of underlying NPAT at 4.5 cents per share

Southern Cross Austereo CEO, Rhys Holleran, said: “It is pleasing to see some top line growth in the business, especially in television. We are determined to keep building on those gains in 2014 by investing in new shows in key markets which will hold us in good stead for the future.”

In keeping with the company’s policy on capital management, SCMG Chairman Max Moore-Wilton, announced a fully franked dividend of 4.5 cents per share.

CEO Rhys Holleran opened the investor proceedings this morning with a few words about former CFO Steve Kelly who recently lost his battle with cancer

Many of the audience questions revolved around Southern Cross Media’s television results, which after years of loss increased by 1%. 

It was clear in the financials that regional radio advertising has dipped. In an investor briefing attended by radioinfo, one analyst asked about the low growth outlook of metro/national and regional radio advertising for the second half of 2014 and whether it could even be said that the company had ‘underperformed’. Holleran replied saying: “The Government is the biggest regional advertiser and have pulled back on their advertising. Regional radio is the most predictable business we own, it has got large clients and it reaches lots of locals. Metro radio will have flattish and low growth which we’re seeing in trend now. We will have low growth and that is consistant with our growth outook. It’s a bit harsh to say that we’ve under performed.”

When asked about investement in more radio marketing and promotions, Holleran said: “Our [marketing and promotions] plans are solid. All we have to do is walk through the city and see the signage and watch TV at nights to see the commercials. We have a full on large scale attack in every market we operate in, and in the capital cities it’s a regeneration of the entire Today portfolio. We’ve looked at seven areas of our business where we could cut funds out of the unproductive areas andspread it around.  

In relation to ‘talent cuts’ (such as Kyle and Jackie O) Holleran said: “Shows take time to build and emotional connections take time to resonate with their audience. The balance of us recruiting a new all-star line up for breakfast is that everything we had saved we’ve reinvested in new talent.”

View SCMG’s investor slideshow presentation and more in-depth results here.

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