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