HT&E has reported revenue from continuing operations up 58% to $472.3 million compared with $298.6 million in the previous year.
• Segment revenue up 58% to $472.3 million from $298.6 million
• Adshel revenue up 7.5% and EBITDA up 11.3%
• ARN revenue growth in second half of 5.1% offset first half decline
The results incorporate the acquisitions of Adshel and Conversant Media in October 2016, with $161 million in revenue directly attributable to these acquisitions, and the balance predominately due to organic growth across Adshel, offset by declines at Australian Radio Network (ARN) in the first half.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 30 per cent to $118.4 million, with underlying net profit after tax and before amortisation (NPATA) attributable to shareholders up 28% to $54.1 million.
The loss of the Yarra Trams contract announced in October 2017, and specifically the assumptions regarding the potential network impact, have resulted in a non-cash impairment of Adshel Australia goodwill and intangibles of $163.3 million in the 2017 accounts. This follows the $220 million accounting value uplift recorded in 2016. Statutory net profit after tax (NPAT) attributable to shareholders for the year was therefore a loss of $117.5 million, compared to a loss of $6 million in 2016.
HT&E CEO and managing director Ciaran Davis said: “While 2017 had its challenges, we ended the year with strong momentum in our radio and outdoor businesses. Regaining and retaining the number one position was a key priority for ARN in 2017, which subsequently delivered the best ratings year in its history, and we finished 2017 as the leading national radio network in Australia.
“Adshel continued to outperform the market in terms of revenue share and we are actively pursuing new contracts, having already secured the Metro Trains Melbourne contract for seven years. Adshel New Zealand had another robust year of above market growth.”
HT&E has completed a strategic review of its Hong Kong outdoor business and the decision has been made to continue to operate the business with a focus on returning it to profitability.
Australian Radio Network
While ARN full year revenues were down 0.6% year on year, growth of 5.1% in the second half, in a market that grew 1.7%, offset a 6% decline in the first half.
Second half costs were up 2%, driven by increased variable cost of sales on increased revenue and investment in staff and talent, offset by the abolishment of broadcasting licence fees. Full year costs were up 0.7% with EBITDA down $2.3 million for the year.
ARN had the best ratings year in its history, regaining the number one national 10+ network position in surveys 5 to 8, ending the year as the leading national radio network in Australia, with strong survey 8 results across all markets.
Total revenue for 2017 across Australia and New Zealand rose 7.5% to $221.3 million. EBITDA grew 11.3% to $51.5 million, with digital revenues contributing to overall margin improvement. Adshel had a very strong performance in the first half of 2017, with significant revenue and earnings growth. The loss of the Yarra Trams contract, announced in October, affected momentum in the fourth quarter in Australia.
In Australia, Adshel experienced growth of 4.2%, compared with the roadside-other market segment, which was up 3% on 2016. In New Zealand, Adshel revenues grew 24% against market growth of 18%.
Trading update ARN
Momentum from H2 2017 has continued into 2018 with forward bookings indicating similar revenue growth in Q1 2018. Talent changes in 2018 are cost neutral.
Trading update Adshel
With good revenue visibility into Q1, Adshel bookings for the quarter are in line with 2017, after adjusting for Yarra Trams contract-only revenue (-$5m in Q1 2017) to enable like for like comparison.
Top photo: HT&E CEO Ciaran Davis