Speaking at today’s Annual General Meeting, ARN Media Chairman Hamish McLennan said the company has “a stable financial foundation” despite “challenges in the advertising market.”

The company is “not standing still” and wants to expand, but it can’t.

“Outdated ownership laws” that were established before social media and streaming are “constraining” the company’s growth, according to McLennan. By the time the AGM had concluded just before 11am, the company’s declining share price had recorded a one cent uptick.

Annual General Meetings follow a very formal process and the details of the shareholder report were already known in advance after the release of the full year finance report.

The most interesting part of the meeting was the shareholder question time.

Answering a question about whether the failed $5 million dollar SCA bid “was money well spent,” CEO Ciaran Davis reiterated the logic of the bid and said:

“We firmly believe in the future of audio and radio in this country. In a world where global audio tech is limiting us, we believed the consolidation would have delivered good live local content and would deliver for Australian advertisers. We also believed that [it was a deal] that could [allow the company] to look to the future with confidence against global tech.”

That strategy is important for Australian media businesses because 50% of advertising revenue “currently leaves this country” according to Davis.

A question from investor David Kingston outlined the way the capitalisation and the share price of the company has fallen since the “glory days” of the Tony O’Reilly ownership period many years ago. He asked, “are shareholders better off to just run the radio and audio businesses and return profits to shareholders?”

“We believe in this sector and this industry. Social platforms are having a diabolical impact on Australian media companies. Poor government regulation is killing Australian media companies,” said Hamish McLennan.

“We’re really the last live and local media in regional areas… as a competitive advantage we have a lot to offer in that area. Our advertiser base over the long term will be able to drive more profit in the long term… but we need regulatory change.”

Addressing the company’s restructure and recent redundancies McLennan said: “Our restructuring was a little bit overdue… we have let over 200 people go over the past 12 months… we have tried to treat those affected respectfully.”

The restructure is aimed at investing in new technology, because any company that doesn’t innovate in this time of changing technology “will be killed,” according to McLennan. ARN has divested $700 million of assets that were “not core business” in recent years to concentrate on its audio business in Australia.

He also commented that “activists” have supressed some profits and that he believes that the company share price is currently  “undervalued” and not a “real reflection of the company value.”

“A major focus will be on driving growth from the core of the business. We really want to be an audio business and do the best for the market.”

The business of the meeting included the re-election of various board members whose terms routinely expire, along with auditing and finance resolutions and remuneration bonuses.

Alison Cameron was asked during her re-election remarks, if she is embarrased by Kyle and Jackie O and how she defends the “sexist and misogynist remarks of Kyle Sandilands.” Cameron, the former CEO of Grant Broadcasters said she is not a regular listener and not in the target audience for the show.

Quizzed on related party transactions between ARN and the former Grant Broadcaster regional stations that were sold to ARN, Cameron said she acts as an ARN company director and does not discuss ARN matters with her family.

Grant Broadcasters still retains ownership of some of the regional radio sites and ARN pays rent for those studios, but Cameron revealed that the Grant Boradcasters family trust is currently in the process of divesting itself of those “legacy leases” to avoid any conflcits of interest. As part of the sale deal, ARN did buy many of the studio sites, but a few of them were still left in Grant Broadcaster ownership.

Recognising the contribution that Alison Cameron has made to ARN and the Australian radio industry, Chairman McLennan said: “Alison is well and truly invested in making ARN a success. She is one of the most honorable and honest directors I have ever worked with.”

Alison Cameron was re-elected to the board of directors.

Addressing the elephant in the room, Kyle and Jackie’s so far unsuccessful simulcast into Melbourne, CEO Ciaran Davis said the pair have been number one in Sydney for 50 consecutive surveys, with more than 1.7 million listeners across various platforms.

He said the show has “double the audience of Australia’s top tv show” and “activates large scale brand partnerships,” which is good for advertisers.

Acknowledging that the success of the show’s expansion is a “legitimate topic of investor interest,” Davis explained that the show’s expansion strategy is a long term project. “Shifting market behavious takes time, we’re realistic,” he said, comparing the strategy to the introduction of Christian O’Connell into Melbourne on Gold FM, which took two years to reach the top position it now holds.

“K&J’s content is not for everyone and it can spark debate. The show takes on feedback, it is a strategic multi-year commitment…  it was never meant to be an overnight success,” he said.

Davis also reaffirmed the company’s commitment to regional radio. ARN has 49 stations in 29 markets. “Regional audiences are increasingly valuable to advertisaers. We have a commitment to deliver live and local content.” Revenue from ARN’s regional stations is up slightly. Regionals deliver 34% of ARN’s revenue.

As well as a mass market advertising strategy, ARN is also developing its niche market offering to advertisers for addressable targeted audience segments through podcasts. Podcasting only currently delivers about 10% of company revenue, but is “attracting new categories of advertisers.” Davis says the current restructure is aimed to expand this revenue segment without decreasing revenue from the company’s main radio mass market strategies. The iHeart Radio app, which is operated on lincence from iHeart’s American parent company, is part of the company’s expansion strategy.

The company is “agressively reducing costs” this year, resulting in about 200 redundancies. “We are reshaping then business to make the P&L a lot better than it is today. After a number of weeks of uncertainly we are now coming through that and we will enter the second half of the year positively,” he said.

More financials here.

Reporting: Steve Ahern