World Audio has put on a brave face following the announcement of the government’s digital radio decision last week, with Managing Director Andrew Thompson saying the decision has recognised WorldAudio’s position.
In a letter to shareholders, copied to the Stock Exchange, there was no mention of last week’s media statements criticising the government for not including World Audio in the first round of digital licences.
The letter says the key elements of the digital radio policy framework decision which affect WorldAudio are the staged roll-out of digital services for Broadcasting Services Band commercial services and the six year moratorium.
Importantly for WorldAudio, says Thompson:
* The government has recognised WorldAudio is entitled to provide radio services via non-BSB digital spectrum without any time moratorium and
* The government stated that it will continue to consider options for non-BSB operators, such as WorldAudio, to deliver digital services.
He quotes Communications Minister Coonan’s speech which said the government will consider options for these broadcasters to deliver services outside the Broadcasting Services Bands such as via satellite and on the Foxtel platform.
“This is a specific acknowledgement of WorldAudio’s position, as it is the only commercial radio broadcaster operating on the Foxtel and Austar digital platform.
“The company believes the government’s policy announcement therefore clearly acknowledges that WorldAudio is an incumbent commercial broadcaster and has a role to play in the future development of digital radio in Australia.”
The company is “assessing its operations” and intends to continue its dialog with government. The letter also says a new board member, lawyer Mark Cohen has joined the company as Executive Deputy Chairman.
WorldAudio has raised an additional $7.9 million from shareholders and secure debt funding in teh past six months to allow it to continue its operations. Last financial year the company made a loss of $6.5 million, earning only $175,189 advertising revenue.
WorldAudio’s share price continues to fall and was sitting on 3 cents at the close of today’s trading. When the company launched in 2002 shares were worth 20 cents (click below to read radioinfo’s report of the launch in 2002).
One disgruntled shareholder, who bought into the company when shares were at 8 cents has seen the share value more than halved and is still waiting for a dividend. The shareholder has written to radioinfo with the following comments:
“Are the Australian Securities and Investment Commission or the Australian Communications and Media Authority concerned about the operation and business plans of Radio 2? Given Helen Coonan has outlined the digital playing field for the next five years, isn’t it time World Audio made its future clear?”
The shareholder, who wishes to remain anonymous, has posed the following questions:
Why is so much money being spent on advertising a radio station no-one can hear unless you turn on a TV or computer? Why is there no round-the-clock program with announcers? Why are there only selected times you can hear more than music? Why are there no advertisements, news on the hour, traffic reports and time calls etc?
“As small, but now concerned, investors we realise we made an uneducated purchase in WAG, says the shareholder. This certainly isn’t a radio venture deserving special consideration, but rather a business plan the regulatory authorities should put an end to.”
In 2002 the Financial Review named WorldAudio in its list of the year’s ten worst performing company floats.