SCA revenue down 18% despite four profitable quarters

Former Publisher

Southern Cross Austereo posted a positive EBITDA of $108.2 million last financial year.

Total revenues for the 2020 financial year were $540.8 million with underlying net profit after tax of $35.8 million, a decline of about 50% compared to the 2019 financial year.

In the June quarter, largely impacted by the coronavirus pandemic, SCA reported an EBITDA of about $21 million compared to the $26 million average for the preceding quarters.

In an update to the ASX on Thursday (August 20), SCA said its recent equity raising has resulted in a “historically low” net debt of $131.6 million and leverage of 1.24x EBITDA.

However, revenue from both audio and television declined by 18.2%, but SCA revealed the global health crisis has had a lower impact on its 78 regional Hit and Triple M radio stations.

SCA chief Grant Blackley said recent cost-saving measures will help the business recover.

“Audio has not only remained a popular companion for people working from home during the COVID-19 lockdowns but is also more accessible than ever through internet-enabled devices such as mobile phones, tablets, desktop computers and smart speakers,” Blackley said.

“Strategic decisions taken in recent years will enable the business to emerge from the COVID-19 crisis with a lean and efficient operating model focused on recovering lost earnings.

“We will continue to build the strength of our radio network by investing in key timeslots and markets. At the same time, we will grow our digital audio ecosystem with premium content, platforms and products attractive to our listeners and advertisers.”

There were cost savings that helped, largely derived from discretionary spending and employee-related expenses, along with $16 million from the Government’s JobKeeper wage subsidy.

On a call with the market today, SCA said the extension of the Morrison Government’s JobKeeper initiative provides a “safety net” against further revenue declines.

SCA confirmed that PodcastOne Australia is also now cashflow positive with revenue up 96% to $4.6 million to June 30 when compared to the previous year.

More to come.

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