SCA audio revenues fall 18%, but company’s profit improves almost 60%
Southern Cross Austereo (SCA) is the latest media company to reveal its half-year performance to investors.
The company’s overall revenues were down 15.9% from $308.1 million in the six months to December 31, 2019 to $259.2 million for the same period in 2020.
Earnings before interest, tax, depreciation and amortisation (EBITDA) – often used by investors to measure the true performance of a listed company – improved by 11.5%, from $67.5 million to $75.3 million.
Its net profit after tax (NPAT) was $32.5 million for the half, a 59.3% improvement from $20.4 million.
The company, however, did benefit significantly from Federal Government assistance.
Employee costs for the half were $93.921 million, however it received $31.9 million as part of the JobKeeper wage subsidy program, and a further $3.4 million from the Public Interest News Gathering (PING) grant. This brought its employee expenses for the half down to $58.570 million, effectively a 43.5% drop from the $103.584 million it paid out, without assistance, in the same half of 2019.
The company received $1,500 per fortnight per eligible employee until September 2020 as part of JobKeeper. From September 29 to January 3, the company received the reduced rate of $1,200 per eligible employee who worked 80 hours or more for the fortnight, and $750 per fortnight for those who worked fewer hours. SCA is no longer eligible for JobKeeper.
SCA said today’s positive results were driven by proactive measures to implement a leaner operating model, and millions of dollars in Government support.
Expenses for the half were down 23.6%, from $240.6 million to $183.9 million. Non-revenue related costs of $106.1 million were down 30%.
Payments to suppliers and employees were down from $295.559 million to $231.820 million.
Spending on promotions and marketing, however, climbed from $4.692 million to $6.671 million – an increase of 42%.
Focusing in on audio, revenue was $173.3 million, 17.8% lower than the prior corresponding period. Local audio revenue was $63.335 million, down from 21% $80.249 million, and national audio revenue was $94.880 million, down 16% from $113.169 million. Other audio revenues fell from $17.471 million to $15.045 million (down 14%).
SCA’s performance by segment
Overall audio revenues accounted for about 67% of the company’s overall revenue, relatively stable with the prior year.
In a statement, SCA noted the impacts of COVID on metro radio markets were offset by growth of 6.8% in national regional radio revenue as the company continued to benefit from the Boomtown trade marketing initiative and “relatively favourable economic indicators in regional markets”.
It also echoed Nine’s sentiment that “television markets [had] recovered more quickly than radio markets”.
CEO Grant Blackley said the results showed a strengthened balance sheet which “provides confidence to invest in new organic products and services to optimise audience and revenue outcomes”.
Net debt compared to six months ago was down 49.5%, from $131.6 million on June 30, 2020, to $66.4 million on 31 December, 2020.
Blackley also praised the company’s new radio offerings, as well as the recent launch of its digital initiative, LiSTNR.
“We have revitalised our key Breakfast radio shows, led by The Morning Crew with Hughesy, Ed & Erin on 2DayFM in Sydney, The Marty Sheargold Show on Triple M Melbourne, and Basil, Xav & Jenna on our new Triple M station in Perth. This investment is critical to unlocking higher audiences, revenue and earnings,” he said.
“After three years of development and testing along with extensive research into consumers’ evolving audio habits, SCA launched LiSTNR on 18 February. LiSTNR is at the core of SCA’s digital-first operating model, effectively deploying smart technology to create, distribute and commercialise our premium audio content. LiSTNR will combine transparent audience measurement with real-time insights about listener routines, needs and preferences, enabling advertisers to deliver their brand messages to addressable and targeted audiences at scale.”
SCA’s full financial breakdown for the first half of the 2021 financial year is below.