Prime Radio earnings plummet

The Prime Media Group has released their FY13 financial report to the market late this afternoon, and the results show that Prime Radio earnings have fallen heavily.

The overall result for the group was strong, reporting a consolidated net profit of $35.4m, an increase on the previous year of 6.6%.

However the performance of the radio group was weak; with net profit declining by 21% to $3.3m, and revenue falling nearly 5% to $19.7m.

The extent of the decline is shown across the last 3 financial years; in FY12 Prime Radio reported EBITDA of $4.2m, in FY11 EBITDA of $4.8m, as shown below;

Earlier this month Grant Broadcasters acquired the Prime Radio network for $24.525m (closing 30 August). Based on todays results, the radio group has traded at a multiple of around 7.6x earnings. Notwithstanding the declining profits, Grants have bought well considering what the stations have the potential to earn under strong management, and considering that Prime built the radio network for about $77m, and have exited at more than a $50m discount.

Speaking about the radio performance, Prime said they had "experienced difficult trading conditions in a weakened Queensland economy". Their commentary on radio is shown below;

The financials in further detail for Prime Radio are shown below;