Which of the big radio groups is really performing the best. We compare apples to apples.
What you produce out of your actions (results), will always speak louder than words.
And this week two of the countries biggest radio groups released their profit results.
ARN released half yearly and SCM released full year.
Nova Entertainment, being a privately owned company ( ie not publicly listed and trading on the ASX ) ,does not have to disclose it's results.
The Australian Radio Network, owned by APN recorded a half yearly result of $29 million ebitda ( earnings before interest, tax, depreciation and amortisation) That's a 6% increase on the same 6-month period last year.
These numbers were achieved from ARN’s eight (8) fully owned stations, and 3 JV stations (Canberra, Brisbane and Perth).
This you would expect, would put them on track for a full year result well in excess of last year's full-year EBITDA of $58 million
Generally, the large majority of revenue and profit comes from the two largest markets Sydney and Melbourne. And Sydney in particular, has been hardest hit for SCM.
Southern Cross Media showed a full year result of $179.7 million ebitda, a decrease of 14.8 %
That result is mainly from their eighty two (82) stations, (which includes 10 metro’s and the Canberra JV) . These numbers don't take into account impairments on intangible assets and investments by SCM.
At the risk of stating the obvious, you would have to say ARN are performing well, and SCM have had a rough year.
The best comparison when assessing performance would be to compare the financials of individual stations, but the companies do not make these available.
As management consultant Peter Drucker once said, “Whenever you see a successful business, someone once made a courageous decision.” Both SCM and ARN have made some bold and courageous decisions in the past.
However, investors might be questioning SCM’s results?
It was 2011, when regional radio operator Southern Cross Media merged with metro radio group Austereo. The idea of merging SCM and Austereo was ambitious and courageous . Its been 3 years now since the merger and it has had its fair share of “teething” problems. A lot of these are to be expected. Merging any two companies and their cultures is no easy task.
The group has been hurt by poor performing regional television, which has been impacted badly by TEN’s programming. There have been numerous changes at senior management and board level, and obviously the hugely significant move of Kyle and Jackie O defecting to ARN’s Kiis. Not to mention the several ‘incidents‘ along the way, including the prank call tragedy, which no doubt eroded the company's confidence and took an enormous amount of management time in addressing.
The Board and investors will be looking for improvement at SCM next year. And there’s little doubt the company will improve the performance.
ARN on the other hand have been the quiet achievers. The company historically has been conservative and extremely fiscally responsible. It appears to be a company in a period of transition.
It already had a strong base, and was recently acquired 100% by APN ( from 50% partner Clear Channel ) and subsequently has made some good moves . It’s shown good solid growth over a number of years now, and has demonstrated a great deal of consistency.
And by way of comparison, the unlisted Nova Entertainment, reported $40 million ebitda at the end of last year. That’s from Nova Entertainment’s nine (9) stations ( including 1 regional and 2 JV’s ) That number would be likely to be higher by now.
Fairfax Radio also released full year results recently. They posted a $13.9 million ebitda which was down 26.2%. This was from their six (6) AM stations and 96FM Perth
MRN reported to the market today and reported EBITDA down by 27% on prior year to $10.4 million (prior year includes one-off net revenues totalling $3.1 million) for 2 stations – 2GB and 2CH.
Here’s a snapshot of each group's performance
SCA 82 $179.7 million
ARN 11 $60 million * estimate only
NOVA 9 $40 million * December 2013
Fairfax 7 $13.9 million
MRN 2 $10.4 million
Brad March is a Director of Radio Today, is a former CEO of Austereo and has been named Media Executive of the Year. He’s Director of Marchmedia and Pacific Retail Management.