Southern Cross Austereo AGM highlights

Chairman Peter Bush recaps financial year highlights, chief executive Grant Blackley’s 2016/17 trading update

Southern Cross Austereo held its Annual General Meeting yesterday in Sydney.

Chairman Peter Bush first addressed shareholders and reminded them of some of the highlights of the past financial year:

“Revenue increased across all the Group’s media assets. It was particularly notable that the group’s regional television revenue grew by 3.1% against a backdrop of the regional TV advertising market falling by 6.1%. This was attributable in part to improved ratings for Channel Ten programming and in part to improved monetisation of those ratings by our own sales teams. Those same sales skills are now being applied to the sale of higher-rating Channel Nine programming under the new affiliation agreement.

“The group’s regional radio business continued to perform strongly, with advertising revenues up 6.1%. Revenue from our large and diverse local client base was up by 5.3%, while national advertising revenue grew by 7.9%. This growth in national advertising revenues provided an early return from the group’s investment in regional audience surveys, which provide valuable information to advertisers about our regional radio audiences.

“I would like to thank all of our 2,500 employees and contractors. Their creativity and commitment enable us to entertain and play an important role in the lives of 10 million people around Australia every week and to deliver value to our advertising clients and to our shareholders.”

CEO Grant Blackley then spoke and also highlighted major achievements in his first year in the role. Blackley then provided a trading update:

SCA's Grant Blackley

SCA’s Grant Blackley

“I’m able to report that revenues are up 12% in the first quarter compared to a year ago, with growth in all asset classes.

“Metro advertising revenues have grown by around 5% in the first quarter compared to a year ago, despite the adverse impact in the first half of this financial year from the revised ATN contract and post-election hangover. Our revenue has continued to grow even though the market declined by 1% across the quarter, following the 9% growth recorded in the same quarter a year ago.

“Regional radio continues to grow and revenues for the first quarter are up 3%.  Unsurprisingly, national advertising growth has outpaced local growth in regional markets as we continue to focus on addressing the historic underinvestment in regional areas by national clients.

“In television, in the first quarter the regional east coast market was down 0.4%, demonstrating a moderated level of decline compared to the negative 7% experienced a year prior. Despite this mild market contraction, SCA’s television assets will show strong growth due to the change in affiliation on 1 July in three of our four aggregated markets.

We have provided guidance to the market that we expect total television advertising revenues (inclusive of all markets) to be 30-35% higher for the full financial year and the first quarter is in line with that forecast with revenue up 31%.

“At the August results presentation we forecast first half EBITDA performance to be in the range of $92-$94 million and that remains our guidance for the period.”

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