ARN Media releases half-year results

ARN Media has posted flat revenue and a drop in profit for the half year to June.

The company has released its half-year results, with operational revenue up 1% to $168.1 million.

Digital audio advertising revenues saw a rise of 26% to $11.0 million.

But net profit after tax was down, much of this due to costs associated with its bid for SCA.

ARN Chief Executive Ciaran Davis says the company continues to apply a critical lens to costs, particularly given the current market conditions.

“Our cost out program is on track to limit total people and operating cost growth to between 2-4%, that will deliver $6.5 million permanent cost out in 2024.”

“We have also commenced an additional efficiency review, targeting $5-10 million over two years.”

Davis says the focus has been on operational performance as the company navigates the current economic conditions.

Total underlying costs were up 2% to $135.9 million, with much of this attributed to investment in marketing to support the launch of The Kyle and Jackie O Show in Melbourne.

The company told the ASX “Advertising revenues have remained resilient, supported by audience growth in digital streaming and podcasting and the continued realisation of national regional revenue synergies.”

Key highlights include:

#1 network in Sydney and Melbourne.

 Significant national revenue share growth, including 9% growth of live streaming

 Number one podcast publishing company in Australia

 47 stations across Australia and exceptional survey results, including Hot FM on the Sunshine Coast reaching #1 for the first time.

Of the bid to acquire some of SCA’s assets, ARN Media Chairman Hamish McLennan said “We have made no secret of the fact that we want to be part of industry consolidation and are very disappointed that our Indicative Proposal to acquire SCA was unsuccessful as it represented a compelling proposition for both ARN Media and SCA shareholders.”

ARN says Kyle & Jackie O’s arrival on the Melbourne airwaves is tracking in line with expectations. Early performance indicators include:

K&J syndicated ‘Hour of Power’ is #1 nationally, increasing in share for the last 3 surveys.

K&J is #1 catch-up podcast in the country.

16% of downloads come from Victoria since breakfast launched in Melbourne, up from 12% vs same period last year.

17% improvement in people saying they will consider listening to the show.

29% improvement in those who have trialled the show.

Almost 3 million calls inbound during The Kyle & Jackie O Show on 20th June for the ‘You Get A…’ promotion; 28% from Victoria in 1 x 15 minute period

ARN says overnight, the show went from reaching 851,000 people in Sydney to 1.2m across Australia’s two largest cities.

ARN acknowledges it takes a while for a new show in a new market to bed in.

“We know it will take time to build a loyal audience, but brand tracking results are promising.”

As to what lies ahead for the company, McLennan says “We are investing in new digital audio formats and technologies for commercialisation as we continue to build an integrated audio business. We believe there is potential for further efficiencies for the remainder of this year and into 2025 and are continuing to evaluate our operating model including exploring how the business can benefit from using Al.”