SCA's Grant Blackley on advertising trends and the 'character building' of COVID-19

Chris Pash
By Chris Pash | 21 August 2020
 

Grant Blackley, the CEO of regional broadcaster SCA, describes COVID-19 as a character building time and an opportunity to take a hard look at the business.

He released full year results showing the regional radio and television operator with a 18% drop in revenue to $540.15 million.

But the company was still in the black. Underlying net profit after tax was $35.8 million, down 51%.

Part of the reason is that COVID-19 had a lower impact on less densely populated regional markets.

“There's a lot of regional markets that either are untouched or have had very low impact of COVID-19,” he told AdNews.

“The impact being more an economic one than health in a lot of those areas. Whilst some national spending and local spending might have contracted, it certainly hasn't contracted to the same level as metro.”

National advertisers have also been educated to the benefits of regionals through the Boomtown marketing initiative.

“We're seeing less impact in the regions because of that density and secondly, because national advertisers are continuing to invest more in regional markets for very good reasons,” he says.

SCA has a radio portfolio of 10 stations in metro markets and 78 in regionals.

Revenue improved in June and July from the trough of the pandemic in April/May.

“There's been a slight setback in Melbourne but, respectfully, our exposure as a group is about 12% to 13%. With our peers, you'll see a more dramatic impact,” he says.

“The general recovery and improvement in revenues in the rest of the country are therefore compensating for what's occurring at this point in time in Melbourne.”

SCA is seeing stronger inquiries from advertisers. “People are becoming more willing to reinvest,” he says.

The red line in this chart shows the SCA view of the advertising trends: 

Underperforming segments are generally larger categories. SCA says these are expected to rebound faster when restrictions ease. 

SCA is seeing improvement in key categories that under-performed in the June quarter, includinbg auto dealers and food produce. 


sca ad trend aug 2020

 

Recasting
Blackley says the pandemic has given a reprieve from business as usual to sit back and look at the company and how it operates.

“I think there'll be some benefits for companies coming out of this that will be permanent changes in the way they operate,” he says.

“It forces innovation in times of strain and stress, and it forces everyone to either accelerate certain plans or create new plans that are better and bigger and more agile.

“Every media company, and a lot of businesses have benefited from this time.

“But we're all at a different maturity stage and thankfully, in our case, we were early investors in a lot of our technology set, our audio on demand assets like podcast one, and in-stream advertising.

“We were well set up and now what we are doing is accelerating those plans with more time, capital and investment.”

Part of the strategy is a leaner cost model. Non revenue related costs have been cut to $287 million from $316 million.

The annual results show expenses down $65.8 million or 12.8% to $447.8 million, driven by savings in discretionary spending and employee-related costs.

And in reserve the company has the proceeds from a $169 million capital raising.

A big help was $16 million from the federal government’s JobKeeper wage subsidy. And SCA is up for a $10 million grant in support of regional journalism.

“I'd have to say that we've been very pleased and grateful of the government's leadership, in this time,” he says.

Blackley described the pandemic time as “character building”.

“But respectfully it's also been a time where we can talk more openly and more in a more granular way with all of our people and our customers,” he says.

“And I must say it's actually been quite humbling and fulfilling in some respects.”

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au

Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.

comments powered by Disqus