SCA revises earnings guidance

Southern Cross Austereo has issued a profit guidance to the market this morning, noting that it expects earnings to be materially in line with the previous year, although underlying NPAT will be around 10% less than the previous year.

The revised outlook is being attributed to poor supply to the regional television group from Network Ten, softer metropolitan ratings, and a weak advertising market; each of which has contributed to an overall lower revenue performance.

Furthermore, there has been increased expenditure in marketing and promotional activities in the metropolitan radio business.

Analysing the guidance by division:

Television ratings for the Channel 10 product, which are around 70% of SCA’s television revenues, have failed to improve since the Big Bash League and Sochi Winter Olympics, with year to date revenue share flat on the prior year including these events.

In metropolitan radio, SCA has stated that their strategy has been to diversify risk, and have two compelling radio propositions in each market. Year to date, metropolitan radio revenues are flat on last year and the company expects revenue to finish slightly down on last year, with declines in the Today network being partially offset by gains on the Triple M network. SCA expects further slippage in overall share driven by the rebuild of the Today network through the rest of the calendar year, with recovery expected in the first half of 2014.

CEO Rhys Holleran said: “SCA is driving an exciting period of talent led regeneration with our Today brand, whilst our Triple M network continues to outperform with growth over last year. Our focus remains on building our brands whilst controlling our costs.”