Macquarie Radio Network’s Melbourne venture MTR is unlikely to continue in its present form after the station recorded a $6.2 million loss last financial year.
The Melbourne-based station dragged Macquarie Radio Network’s overall net profit margin down 4% to $5.9 million after $3.9 million in loans were written off on the joint venture with Pacific Star Network in MTR.
Despite the disappointment in the Melbourne venture Macquarie Radio's Sydney operations, which include 2GB and easy listening station 2CH, recorded a much more positive result with overall marketing revenue up from 22.6% to 25.6% over the last year.
The Sydney operations recorded an overall growth of 63% in net profit to $10.7 million.
In announcing the results Macquarie executive chairman Russell Tate said the company’s Sydney based operation had again recorded outstanding results.
“In 2009-10 we recorded an all-time earnings record for the Sydney operation of $11.4 million, an increase of 15% over our previous highest earnings, and an $8 million increase over the prior year.”
“To be able to increase that number again by 47% in 10-11 is testimony both to our brilliant on-air teams and the experience, talent and dedication across all of our sales and support functions.”
But Tate said the future of MRT depends on the sale of Fairfax's network of AM stations including the market-leading 3AW in Melbourne. Macquarie wants to buy the Fairfax metro stations and may not keep MTR open if it is the successful bidder.
He said: “While an operating loss was expected, the extent of the loss was very disappointing.”
“The MTR team has worked hard to produce a quality product but its potential is still impacted by poor signal strength in many parts of Melbourne and a consequent unwillingness on our part to invest further in content, marketing and promotional initiatives which, in combination with an adequate signal strength, will be necessary to win significant audience share in this market.”
Macquarie Radio declared a final dividend of 2c, payable on October 18. Total dividends for 2010-11 were 7c a share.
Macquarie shares were unchanged at $1.10 yesterday.
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