Ad revenue at HT&E's Australian Radio Network (ARN) fell more than 40% in April as the broadcaster cut costs, reduced pay and working hours and applied for government assistance during the pandemic crisis.
In a trading update to the ASX, the media group says direct clients, normally making up about 30% of total revenue, have been particularly impacted by COVID-19.
The company, despite a fall in business, has no debt and is actively looking for "strategic opportunities". Last month the radio broadcaster took a 4.2% equity interest in outdoor media specialist oOh!media.
Some measure of calm has returned since the early days when social distancing rules were imposed.
"The high level of client cancellations experienced in the weeks immediately following the national pandemic lock-down, have abated," the company says.
Forward bookings for May are broadly in line with April.
"Briefing activity levels improving across specific sectors, including financial services, government and supermarkets," according to the update.
The company has found operational savings of between $20 million and $23 million.
The board, CEO and management team members are taking a 20% pay cut and won't get bonuses. Staff are on reduced hours, using up annual leave and some are taking salary cuts for at least three months. The company has also applied for the federal government's JobKeeper allowance.
At the company's AGM, chairman Hamish McLennan told shareholders the company is in a strong and stable position during these unprecedented times.
"Thanks to a number of strategic steps taken last year, our business is one of the better placed media companies in Australia currently facing this crisis," he says.
“Although revenues and earnings in 2019 were impacted by market conditions, the business backed up its ratings success by growing commercial market share, and remains highly profitable and cash generative.
“Audio consumption is expanding among consumers and ARN uniquely offers Australia’s most complete audio offering to audiences, based on their own choices and interests, across radio, music streaming and podcasting.
“Today HT&E has one of the strongest balance sheets in Australia media. While some businesses are struggling with their capital structures, the company has $111 million net cash at the end of 2019, no undrawn debt and a radio business delivering strong cash conversion.
“This is a very healthy position for HT&E to be in at this time giving us the potential to explore the right strategic opportunities for the business should they arise."
CEO Ciaran Davis says a huge amount of work had been done to ensure broadcasting remained in place and uninterrupted across all metro markets during COVID-19.
“As an industry, we have actively managed any misconception that COVID-19 was going to have a negative impact on radio listenership – particularly any decline to in-car listenership," he says.
"It was critical that advertisers were provided evidence to the contrary and retained confidence in the strengths of the medium.
“Radio consumption is growing and we have been on the front foot informing the market of the reality that radio listeners are spending more time listening …. over 1 hour 30 minutes longer per week compared to the weeks prior to the lockdown."
iHeartRadio recorded its best month in March. Active users grew 24% to 1.2 million and the number of new registrations is running at 1,200 a day.
ARN stations -- including core brands The KIIS Network, The Pure Gold Network and The Edge -- recorded more than 3 million listening hours.
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