Southern Cross Austereo could save up to $10m after cost-cutting spree

Managing Editor

In a challenging media market, Southern Cross Austereo has reported an 8.2% fall in revenue to $308.11 million for the six months to December.

These results were delivered to the market today by SCA’s chief executive, Grant Blackley, and chief financial officer, Nick McKechnie.

Net profit after tax was $20.4 million for the same period, up from a net loss of $119.3 million in the same half in the prior year.

Profit was down 32.7% to $26.62 million and its debt up by 12.0%.

Underlying EBITDA (earnings before interest, taxes, depreciation & amortisation) was $62.2 million, within expectations set last October, but down 17.6% on the same period the year prior.

“While advertising market conditions have been difficult, SCA continues to find opportunities to outperform the market,” said Blackley.

“We will ensure our core business is resilient, effective and efficient at delivering compelling content for our audiences and demonstrable positive returns for our advertisers and other business partners.

“At the same time, we will invest in developing new on-demand and personalised audio products to build profitable and sustainable revenue streams for the future.”

On the call with investors, Blackley added that revenue from digital audio grew 140%, with PodcastOne Australia a growing priority for the company.

“Digital audio represents the greatest opportunity for SCA,” he said.

The Boomtown initiative was also singled out for its contribution to regional income, national regional advertising outperforming metro markets.

The acquisition of the Redwave network from Seven West Media, and the growth of its DAB+ portfolio, is expected to further contribute to revenue increases.

After a major cost-cutting spree, SCA says it expects to save between $5 million to $10 million this year, with a view to investing in “new digital audio products”.

“We conducted a comprehensive and holistic review of our cost base with the stated aim of reducing our group costs, both now and for the future,” added Blackley.

Shareholders can expect an interim fully franked dividend of 2.75 cents a share, down from 3.75 cents in 2018.

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Shane
20 Feb 2020 - 12:40 pm

The SCA decline continues, decline, decline, decline year after year over past 4-5 years. Pity the shareholders.

Anonymous
20 Feb 2020 - 2:57 pm

Let’s not forget the human cost that is a big part of the ‘cost cutting measures’.
Real people with lost livelihoods,.. careers derailed and lives thrown into turmoil.

Jason
20 Feb 2020 - 3:58 pm

Amazing the loss in revenue that some GMs and senior management still have jobs. Some big markets north of Sydney are going backwards. Why are they still there. They have lost some great GMs and genuine media people over the past few years. Only themselves to blame. All of a sudden drought is an excuse. Wasn’t 2 years ago.

Pete
20 Feb 2020 - 4:13 pm

What about fixing 2DAYFM up in Sydney that would make more money than tiny markets in North Western Australia.

Brian
20 Feb 2020 - 4:16 pm

SCA Chairman has turned SCA into Macca’s. Wait a minute he used to work at ….. McDonalds.

Anonymous
21 Feb 2020 - 11:27 am

And all they had to do was not axe Dan & Maz… Sad.

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