The Merge, The Results, What’s Next? – MRN
As survey #7 results were announced yesterday, Macquarie Radio Networks AGM was underway.
Outside detailing the results of the company, MRN Chairman Russel Tate spoke of their plans to introduce new programming initiatives to the national market, a format change of 2UE in Sydney in the New Year and a new company name and logo.
On the merger of Fairfax and MRN this year, Russell Tate said: “The merger had always made sense and after at least a dozen unsuccessful attempts to consummate it in the last ten years”.
Fairfax Media Limited holds 54.5% of the Company with MRN shareholders from April 1 having their holdings reduced to 45.5%. MRN’s largest shareholder is John Singleton with 32%.
So how did MRN pull up results wise?
With Fairfax acquiring MRN, on the accounting side the transaction was treated as a Reverse Acquisition. The results for FY2015 includes 9 months of Fairfax Radio results only and three months of combined results. Macquarie Radio’s results for the first 9 months of the year were excluded.
Russell then goes on to highlight that: “very little could be taken from them as a pointer to future results of the company”.
So what lays ahead? Russell Tate said that the new company “Overall slightly ahead of budget targets after the first 4 months and remains confident of achieving full year earnings (EBITDA) in the range between $20 and $25 million.”
They will also deliver on “Cost synergies” of about $15 mil now that the merger is completed.
Russel Tate then said: “We are off to a promising start, and at our current run rate Earnings Per Share already exceed what Macquarie Radio and Fairfax Radio could deliver operating separately before the merger. I remain very confident that we will continue to generate strong and sustainable earnings growth through the next 2 to 3 years”.
He then highlighted some of their challenges they face on the revenue side, where progress has been slower than expected: “We need to drive revenue growth and reduce churn in our current advertiser base and to that end have initiated a full review of the structure, practices and make-up of our sales force.
“Increasing the recognition amongst marketers and agencies of the value of the 40-plus demographic “continues to be our biggest selling challenge”.
Network programming initiatives were mentioned including the recent restructure of the Magic Network and the networking of Alan Jones and Ray Hadley into Brisbane. Russel Tate said: “We will continue to broaden the geographic distribution of content where it meets the criteria of economic benefit (some of it is sponsor driven) and being ratings neutral at worst in all markets.”
So what’s ahead in their programming pipeline?
“We will in the New Year be launching what we believe is the first ever broadly appealing, sponsor commissioned and funded, 1 hour program which will be broadcast weekly throughout our national network and also go to dozens of regional stations. Our news-talk format, particularly outside of peak zones, lends itself perfectly to the production and presentation of such programming and we are currently in discussion on several such projects.”
Russel Tate also talked about a change for Sydney’s 2UE: “The New Year will also see the announcement and launch of a new look 2UE. This is a major initiative for Macquarie Radio and again will be a first in Australian radio.”
And with the AGM, it also cleared the way for their name change to Macquarie Media Limited.