There continues to be a focus on the business model of the Craig Hutchison-led Sports Entertainment Group which trades as SEN radio and podcasts.
Doubts have been raised in the media in recent months related to continuing losses, its bank loan, and its ability to repay that loan.
SEN yesterday revealed in its first half FY24 results it has booked a loss of $1.5m after tax. The company reported the figure includes a $783,000 one-off charge relating to acquisitions and restructuring.
Revenue for the six months was up 8% to $63m. Expenses climbed from $58.5m to $63m.
See also: Hutchy’s sports media empire ‘on the ropes’, as group’s ‘ability to survive’ questioned
Juggling SEN debt
SEN reported current borrowings of $28m with bank debt of $27m. It reported it has reached an agreement with its lender Commonwealth Bank.
Good news: The bank will renew and extend the loan facility for three more years.
Bad news: The new facility is only for $20m plus $2.4m working capital. And the bank wants a payment of $7m in 60 days.
The board said that the group has adequate resources “to support its going concern”.
SEN has scraped together funds toward repaying that $7m due.
The deal to sell SENZ to TAB New Zealand has closed, realising NZ$4m. That NZ business “contributed significantly to the recent underperformance of the group” according to the directors. The NZ loss in the FY24 first half was $1.5m.
Will SEN sell more equity in sports teams?
A minor sale of just a 3.75% stake in its sports team business has raised $1.5m. A further $500,000 was raised selling 1.25%. The company calculated that values the collection of teams – Melbourne Mavericks (netball – the latest and final acquisition), Perth Wildcats (NBL), Bendigo Spirit (WNBL), Otago Nuggets (NZNBL) and Southern Hoiho (NZ Tauihi Basketball Aotearoa) – is therefore valued at $40m. A more significant sale of some of that combined teams’ stake could ease some of the financial pressures. Grouping them might not appeal to all investors. Some of those licences are more attractive than others.
There will be a sigh of relief perhaps with a declaration from the board that “management does not expect any further material acquisitions”. It then optimistically added, “future surplus operating cashflows to be used to reduce the group’s current borrowings”.
CFO quits, internal candidate takes over
The timing was not ideal, but staff come and go.
The chief financial officer Chris Tan is departing for an unnamed “leading global live entertainment company”. He’s been with SEN since it was Crocmedia. While fresh blood from outside the company might have been attractive, the board has opted to play safe with an internal replacement – Trent Bond who was recently appointed as general manager finance.
Tan will finish the renewal of the bank loan and a transition period before he departs.
Two of SEN’s hit podcasts
Trading outlook
The company reported January 2023 revenue was up 6% YOY. It is forecasting FY24 growth in single digits.
See also: Broadcasting milestone: How SEN all-stars celebrated 20 years of sports radio