Broadcaster SCA, with an expensive and distracting takeover offer now in the rear mirror, has been picking up pace as it returns its full focus to audio.
The company, in releasing full year results to June, points to the second half of the year as an indicator of trend.
For the full year, revenue was down 1% to $499.4 million but in the six months to June it was 1.1% higher and underlying EBITDA (earnings before interest, taxes, depreciation, and amortisation) was up 6%.
SCA puts this down to dominance of 25-54 audiences in metro and regional radio markets, improving share of metro advertising revenue markets, strong growth in digital audio revenues and tight cost control.
Audio revenues in the current September quarter are pacing ahead of the same three months last year although the market remains short.
The company is keeping a right grip on spending, with further "meaningful and permanent cost reductions" in the current financial year.
And SCA is shifting its full focus, aiming to sell its regional television, currently in talks with interested parties.
The core strategy is All About Audio and to be the most profitable local Audio company in Australia led by LiSTNR, HIT Network and Triple M Network.
John Kelly’s first six months as CEO, taking over last year from Grant Blackley who ran the business for eight years, was marked by a large distraction, a takeover demanding in time and in money.
“The first first six months of my tenure were very difficult, and particularly once the consortium launched their bid in October (2023),” Kelly told AdNews.
“It was difficult to maintain the momentum in the marketplace, given the noise about that particular transaction.”
The cost to SCA for the due diligence needed to check out the bid by competitor ARN Media and private equity firm Anchorage Capital Partners offer, first made in October 2023, ran at $3 million.
The takeover, valued at something like $300 million, collapsed when Anchorage withdrew, citing a "continued decline" in the trading performance of regional TV.
“When you’ve got competitors in the marketplace saying ‘don't advertise with them, because they're not going to be in that current form in the future’ … that's very difficult to defend,” Kelly told AdNews.
“We were losing briefs from major clients who basically said, ‘Well, we're actually going with your competitor because we've got more certainty there.’
“It's very difficult to play on an even playing field when you've got that rhetoric in the market.
“The $3 million is the hard cost. The soft cost I can't identify as to what it was. All I know is that share wasn't where it should have been.”
Since then Kelly points to growing revenues and flat costs.
“We have grown Metro radio revenue share each and every month since December 2023<” kelly told market analysts.
Non-revenue-related expenses of $308.4 million (excluding significant and other nonrecurring items) came in below guidance of $310 million.
A slide from SCA's analyst presentation:
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