Southern Cross Austereo (SCA) has turned around metro radio ad sales after a poor start to FY18.
In an investor presentation, SCA revealed full year metro radio revenue fell by 1.8%, well below the market’s 4% growth, but there were promising signs in the fourth quarter.
SCA had struggled to crack the notoriously competitive Sydney FM breakfast slot on 2Day FM, regularly changing its line up, but the current trio of Ed Kavalee, Em Rusciano and Grant Denyer have had some success slowly growing their share to 4.3% this year, sitting in eighth, behind breakfast leaders 2GB (16.6%) and Kyle and Jackie O (11%).
Although SCA acknowledged 2Day FM’s ratings growth in breakfast, it said the station remained a “work in progress” and the SCA’s top content priority.
Steady audience growth across SCA’s metro networks Hit FM and Triple M as well as SCA’s digital stack strategy have driven a fourth quarter rebound in metro advertising sales, which was up 8% year-on-year. This followed a first half decline of 3.7% and contributed to a 1.9% growth in H2 (see below).
SCA grew its metro audience by 302,000 listeners on FM and digital radio in the most recent radio survey period and by 12% since the first survey of 2018.
SCA’s regional ad sales have had a strong year of growth, with 3.7% increase in revenue in H1 and a 5.4% increase in revenue in H2.
SCA’s regional TV sales also grew on a like-for-like basis, up 5.3% in H1 and 1.7% in H2.
SCA said that its podcast business has had 45 million downloads, and is now the "pre-eminent commercial podcast business in Australia".
“Investments in content and monetisation are bearing fruit with core operations delivering revenue and earnings growth in the second half,” Southern Cross Austereo CEO and managing director Grant Blackley said.
“Pleasingly, as we look forward and after cycling over divested earnings impacts, we are seeing a stronger market, improved revenues, greater visibility and longer lead times.
“We have also invested for the future with new revenue streams from our podcasting, live events, and expanded local sales representation for the Nine Network in northern NSW, laying foundations for the year ahead, which is poised for earnings growth.”
SCA’s group revenue dropped 5.3% to $654.1 million, largely due to the sale of northern NSW TV to WIN.
Earnings (EBITDA) declined 12.8% to $154.7 million, impacted by NNSW TV sale, previous profit on another asset, Spectrum tax and a copyright dispute with ACMA.
If the impact of the NNSW TV sale is not included, both revenue earnings were flat. Blackley says the business expects revenue to grow in FY19.
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