SCA forecast 18-20% revenue decline

Staff Writer

Southern Cross Austereo has held their AGM this morning with some notable occurences.

The most critical being the shareholder vote in favour of accepting the remuneration report. The company was in the position of a board spill were the report to to be adversely received for the second year running under the Corporations Act "2-strikes policy", however this was averted when shareholders overwhelmingly accepted the report.

However shareholders were less happy with the financial results, with CEO Rhys Holleran amending the guidance for the company to reflect a more pessimistic outlook. Holleran said:

"In August we said that we expected revenues to be down 5-7% on the prior year. Market conditions and continued ratings challenges lead us to believe that we are likely to be marginally outside this range and we now expect revenues to be down 7-8% and this results in a change to our half year EBITDA guidance."

We now believe our half year results will be between 18-20% down on H1 FY14, compared to the guidance of 10-15% that we provided in August.

We are committed to returning the Today network to a market leading position and continue to allocate resources to content and marketing, whilst offsetting a large portion of this investment by controlling costs in other areas of our business.

We have seen our Metro market share stabilise at between 28-29% and this is below where we would like it to be.

The Today network continues to operate in a competitive ratings environment and our loss of audience is the key contributor to our erosion of market share. The regeneration of the Fox brand in Melbourne has been a success. It’s no secret that the 2DayFM breakfast show has not met our expectations and we will continue to work on returning the station to a leading position.

The Triple M network continues to dominate the male audience demographic and, with the number 1 breakfast show in Melbourne and its unique ‘Rock, Sport and Comedy’ offering, is growing revenue share.

Regional radio declined over the first 2 months of the year, the impact of tough election comparatives, however we have seen a return to growth in September.

Chairman Max Moore-Wilton also spoke of the 2Day challenges:

"During the year we commenced a regeneration process of our Today network, which focuses on younger audiences, 18-39, with a female skew. The launch of the ‘Fifi and Dave’ breakfast show in Melbourne has been successful in its first few months and it is rated second only to the Triple M ‘Hot Breakfast’, giving us the number 1 and 2 position in that market.

The launch of a new breakfast show in Sydney on the Today network has been considerably more challenging and we continue to work very hard at improving the Today network and in reclaiming listeners."

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