SCA posts underlying EBITDA of $77.2M in full year results

Posted on 17 August 2023

John Kelly: “We are well-positioned to benefit from expected improvements in advertising markets in the second half of FY24.”

Southern Cross Media Group Limited (SCA) announced its financial results for the year ended 30 June 2023. SCA will pay a final, fully franked dividend of 2.20 cents per share, taking full year dividends to 6.80 cents per share.

Southern Cross Media Group Limited results highlights:

• SCA’s Audio revenue of $397.2M was flat on the prior year. SCA increased its Metro radio commercial share to 27.2%, and LiSTNR digital audio revenue increased 36.2% to $21.3M.
• With a monetisable audience of more than 8M monthly listeners, LiSTNR is on target to reach an EBITDA breakeven run rate during the fourth quarter of FY24.
• Regional television revenues contracted 14.5% to $107.8M, driven principally by a reduction of 20.2% in national revenues.
• Group expenses were 2.0% lower at $428.4M driven by a reduction of non-revenue related expense of $3.8m or 1.3% from prudent and targeted cost management initiatives across the business.
• The share buy-back during the year resulted in higher net debt at year-end of $105.0M. Debt facilities are committed until January 2026.
• Disciplined capex management (net of sales proceeds) resulted in a $8.5M reduction, down from $29.8M to $21.3M, with a further modest reduction forecast in FY24.
• Free cash conversion strengthened in FY23 to 75.8% (FY22: 67.2%), benefiting from lower capex and tax payments compared to the prior year.

Capital management

SCA will pay a full franked dividend of 2.2 cents per share. At 74.6% of underlying NPAT, full year dividends of 6.80 cents per share are in the centre of SCA’s dividend policy of 65% to 85% of underlying NPAT.

SCA also completed its share buy-back program during the year at a total cost of $26.8M ($21.3M of which was during FY23).

Management commentary and outlook

SCA CEO, John Kelly, said:

“Since December, broadcast media markets have been challenging and this is continuing into the new financial year. SCA’s portfolio of audio assets has outperformed with better than market growth in metro radio and digital audio. We are well-positioned to benefit from expected improvements in advertising markets in the second half of FY24.

“LiSTNR achieved positive milestones during the year, with over 1.5M signed-in users and a monetisable audience network of over 8M monthly listeners, the largest in the Australian Podcast Ranker. This is increasing consideration by media buyers, as demonstrated by growth of 36.2% in digital audio revenues. LiSTNR is on target to reach an EBITDA breakeven run rate during the fourth quarter of FY24 – a year ahead of previous guidance.

John Kelly

“Regional television again weighed on our results during the year. We are working constructively with our principal programming partner, Network 10, to enhance our collective offering to national advertisers and sponsors and to generate more reliable returns for our shareholders.

“Our always-on cost disciplines saw group expenses overall reducing by 2% last year with a 1.3% or $3.8m reduction in non-revenue-related expenses. We have commenced a strategic cost review targeting removal of $12M to $15M in annualised costs, with $5-$7M of that being in FY24.

“Our capex program reduced by 30% in FY23 and will modestly reduce further in the year ahead. With major office relocations and refurbishments completed, our ongoing capex program focuses on growth and innovation to grow monetisable audiences and increase revenues.”