SCA shares hit record low amid weak ad market & coronavirus
Southen Cross Austereo shares plunged 12.5% to $0.49 at market close on Thursday, marking the media company’s lowest result on record.
It’s not a complete surprise though, the Australian share market fell 8% after Donald Trump announced a ban on travellers from Europe in response to the spread of coronavirus.
Competitor HT&E, who own and operate Australian Radio Network, had a lift of 1.4% in its share price Thursday to close at $1.45.
Nine Radio, the new owners of Australia’s big talk radio network, also took a beating. Nine‘s shares were down 6.87% to $1.22 at close.
The ASX 200 index lost more than $100 billion at the low point of today’s sell-off, attributable in part to the World Health Organisation declaring the COVID-19 virus a “pandemic”.
In fact, the ABC reports that it was the worst one-day fall since the collapse of investment bank Lehman Brothers in October 2008.
Recent bushfires, the worsening spread of the coronavirus and an already weak advertising market have put a significant strain on the media industry.
Scott Morrison this morning announced a stimulus package to keep the economy running, but its impact on the health of media companies is expected to be minimal.
SCA chief executive Grant Blackley (pictured) remained optimistic when talking to investors after releasing mid-year financials last month.
“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.”
After a major cost-cutting spree, Blackley expects SCA to save between $5 million and $10m 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.
Shares in most media companies also fell hard on Monday (March 9) when the local market recorded its worst slump since the GFC on the back of tumbling oil prices.
HT&E were down 10% on Monday to $1.35, Nine fell 8.4% to $1.30 and SCA slid 7.6% to $0.55.