National radio and regional TV broadcaster Southern Cross Austereo (SCA) has revealed revenue was flat in the first half of its new financial year. For the six months ending December 31, 2022, SCA booked revenue of $261.1m against $259.8m in the same period in 2021.
Highlights from the period include:
• SCA’s metro radio revenue grew 6.8% during the half, increasing its share of revenue when compared to 4.6% market growth. The company reported record radio audiences and SCA maintaining the #1 metro radio network in the 25-54 audience demographic (around 70% of advertising briefs target this demographic according to SCA).
• SCA’s audio revenue of $200.4m was up $6.7m or 3.5%, although audio EBITDA of $40.6m was $3.7M or 8.3% below the prior corresponding period reflecting ongoing investment in scaling LiSTNR, as well as wage increases and CPI-linked increases in broadcast transmission costs.
• LiSTNR reached 1.2m signed-up users and monthly stream starts on LiSTNR reached 5.9m, compared to just 1.7m two years ago.
SCA’s Grant Blackley and Dave Cameron at the recent re-signing of Hamish & Andy to LiSTNR
• Digital audio revenue grew 37.5% to $10.5m, exceeding digital audio market growth of 11%. The digital audio EBITDA loss of $9.3m narrowed by 12.3% compared to the prior year.
• Regional broadcast media markets had a challenging period. SCA’s regional radio revenue was down 2.5% while television revenue was down 9.5%. This contraction was mostly due to the lower spends by some key national advertiser segments and subdued recovery by small and medium businesses.
• SCA expanded its national sales representation network to include ACE Radio’s 21 radio stations which are mostly located in regional Victoria this year.
• All broadcast media markets performed more strongly in the first four months of the period than in November and December. In the case of audio, revenue growth of 8.7% in the first four months was paired with a contraction of 5.1% in the final two months. The advertising categories that declined the most included Government (down 28.8%), Consumer Electronics (down 19.5%), and Financial Services (down 37.4%).
SCA CEO, Grant Blackley, commented:
“SCA’s portfolio of audio assets, supported by our efficient and resilient operating structure, is positioning us for growth while continuing to return funds to shareholders through fully franked dividends and our on-market share buy-back.
“SCA creates more live and on-demand audio content than anyone else in Australia. And our investment in digital infrastructure over the past five years means we create an ever-expanding range of content for our audiences to enjoy anywhere, at any time, on the device of their choice. Despite reducing our headcount by 12% since 2019, we have grown our content output by 66% or 400,000 hours over the same period.
“Audiences for our broadcast content in the five metro markets grew to record highs in 2022, making SCA the #1 metro radio network in the coveted 25-54 audience demographic. This is the money demographic targeted by around 70% of advertising briefs.
Fifi Box, SCA CEO Grant Blackley and Marty Sheargold
“Awareness and use of our LiSTNR digital audio ecosystem continued to scale. With over 1.2 million signed-in users, and nearly 6 million monthly stream starts, LiSTNR is providing critical mass for brands to reach engaged and addressable audiences at scale. Our exclusive Australian sales representation of premium partners, such as Wondery and Stitcher, has expanded the reach of the LiSTNR sales network to 6.6 million monthly listeners. Whether you listen to a Wondery or a Stitcher podcast on LiSTNR or another distribution platform, you’ll always receive advertisements sold exclusively by SCA.
“SCA’s Q3 broadcast radio revenue is forecast to show flat to low single digit growth. January metro revenue was up 3.4% and, in February, is forecast to be up 2%.
“In regional markets, local radio revenue was up 7% in January and is expected to be up 10% in February. However, national radio revenue, accounting for approximately 32% of all regional radio revenues, declined by 14.8% in January and is forecast to be back 8% in February. The television market is tracking 10 – 12% below last year for Q3.
“Digital audio revenues will be up more than 65% for January and February compared to the prior corresponding period underpinned by more consumption on platform and new premium content partnerships. We expect the EBITDA loss on digital audio to continue to narrow as revenue grows well ahead of costs.
“For LiSTNR, we are targeting 2 million signed-in users by July 2024, and we currently forecast achieving cashflow break-even during the 2025 financial year.
“On the expense side, we expect non-revenue related costs to be up between 0 and 2% for the full year to 30 June, below prior guidance of 2 – 4%. Financing costs will be around $17 million and full year capex is forecast to reduce by $10m to around $20m for FY23.”