Southern Cross Broadcasting has recorded a $46 million profit increase, up 35% on last year, with “strong improved performances” in its Sydney, Melbourne and Brisbane radio stations, plus good results in its tv division.
Southern Cross Broadcasting Chairman, John Dahlsen, announced the unaudited net profit of $46,262,000, up from $34,238,000 before specific items for the previous corresponding period. Sales revenue was up by nearly 17%.
The favourable trading result reflects “improved trading conditions in electronic media during the year, with metropolitan radio up 11.7% and similar increases in the company’s television interests.
Southern Cross’ television businesses contributed the lion’s share of sales revenue ($295 million), with the radio division bringing in $91.3 million and the newly expanded film and tv production division earning $16.3 million.
Divisional results were:
Television $69.9m (up from $58.8m last year);
Radio $13.4m (up from $7.9m last year); and
The newly formed Film/TV production and distribution made a loss of $1.3m, reflecting various one-off costs of the acquisition of Southern Star.
Managing Director, Tony Bell (pictured), has told radioinfo:
“Radio profits were well up, as was the entire company. It’s a very pleasing result.”
Southern Cross owns talk stations, 2UE, 3AW, 4BC and 6PR, and music stations, Magic 693, 4BH and 96FM, and Southern Cross Syndication.
While 2UE improved its performance marginally, Bell says the station “still presents some challenges… we’d like to improve its ratings and operating margin performance,” but he would not talk specifically about the amount of improvement expected or strategies to be employed. “If I was willing to talk about that I would have put it in the report,” he says.
Bell believes the new Sydney FM licence is likely to “further fragment the
cluster of seven stations currently rating within two percentage points of each other,
including 2UE.” He expects the new service is likely to adversely impact on the audience share of the FM stations to 2UE’s advantage.
He commended the performance of the company’s Melbourne radio stations and also says 96fm in Perth is “performing well considering there is an additional FM commercial station in the market now.”
Bell says Southern Cross did not take part in the recent complaint against Perth community station Groove FM, but that he “supports the nature of the complaint.” Bell does not believe Groove FM had any effect on Southern Cross revenue in the Perth market.
3AW in Melbourne rated Number 1 in all surveys in 2003 and, so far in 2004, and “performed exceptionally well.” Magic 693 also “performed well,” according to Bell.
The 4BC/4BH combination in Brisbane “continued to strengthen” its audience and revenue earning opportunities, contributing “a strong earnings contribution and return on investment.”
Perth’s 96FM “successfully shifted its target demographic appeal to the more affluent 25 to 39 age group, making the station more appealing to advertisers.” In the most recent survey, 96FM won that demographic.
Southern Cross also owns Channel 9 Adelaide, regional tv stations reaching 5.8 million people; plus television production and distribution companies including the recently acquired Southern Star; Southern Cross Media Sales, Southern Cross Radio Monitors, and various other broadcast and transmission businesses. The diversification of the business has “enhanced” the favourable financial position of the company.
According to Bell, Southern Cross Media Sales “has succeeded in developing a very effective national sales representation service for our radio and television networks. Its Business Development Unit has enhanced the performance by introducing advanced sales concepts that have contributed to revenue market share growth.”
The company “continued to focus on cost containment and
revenue market share growth in all divisions… in a buoyant advertising market.”
Total sales revenue for Southern Cross this year was $ 403,615,000, up 16.8% on last year. EBITDA was $99.6 million, exceeding last year by 26.3% and the company paid $12.4 million in income tax.
Southern Cross will pay a fully franked final dividend per share of 30 cents, up three cents on last year, meeting market expectations. Shares closed up, at $12.31 on news of the good result.
After the successful result Southern Cross has announced Tony Bell has re-signed to continue leading the company for the next five years.