HT&E, the owner of radio network ARN, saw some advertisers shift bookings to March from February, a lingering impact, including staff shortages and supply chain issues, from COVID restrictions.
However, CEO Ciaran Davis is upbeat, seeing a 3% to 4% rise in revenue in the March quarter.
He told AdNews: “Hopefully with the COVID restrictions continuing to ease and with a more consistent approach at federal and state level on the opening of borders, and the return to office where people can, are going to help key categories for radio, advertisers like events, hospitality, tourism, which are not not quite firing yet.
“We’re just coming to the tail end of COVID in the first quarter of this year.
“Revenues are still up, 3% to 4%, which is good. But I'm really encouraged by the noises in terms of restrictions easing, but more importantly, advertisers who are now going to look to spend, again, hire people, and their supply chain issues are coming to an end.
“That's really good for radio advertising because we know it's a great call to action medium, we know the immediacy, the frequency, the messaging drives people to act either to go into a shop or to go to a website.
“It's just been the COVID restrictions that have stopped those key categories coming back. But booking activities are pretty good.”
The company just announced results for 2021: a 15% lift in revenue to $225 million for the year to December; and profit up 135% to $14.8 million as the radio market recovered.
The company sees strong indicators that life is returning to some normality post COVID, positioning HT&E to drive shareholder returns in the current financial year and beyond.
A key to that is acquisition of regional radio broadcaster Grant Broadcasters, with revenue synergies and expanded core radio margins.
And ARN has a digital audio investment strategy.
Davis: “From a core radio perspective, the number of people that listen to radio is still growing. And the advertiser propensity to use the media is still extremely strong. So I'm quite upbeat about the year ahead.
“I couldn't be more enthused by what the opportunities are. The ad market is returning, margins are growing. A really good cash, generative business, so our returns to shareholders are exceptionally strong.
“What we're also seeing is a real opportunity in digital audio that is not cannibalising radio audiences or revenue … podcasting, live streaming of radio. They are growing exponentially during COVID.”
At a briefing of market analysts, he said: “What we have seen is February has been a bit of a transitory month. We haven’t had cancellations but bookings have been moving to March and April.
“I think it's just dealing with lingering effects of COVID. A lot of the categories that we have in radio are trying to get themselves back open again, with hiring staff and supply issues easing a little bit.
“So COVID lockdown didn't affect radio bookings. I think what we're seeing now, though, is just this small period in February whereby bookings have moved to March and April, as businesses get themselves back in line and start opening up full time with restrictions easing further.”
The acquisition of regional broadcaster Grant Broadcasters was completed January 4.
“We've only had our hands on it for four or five weeks,” he says.
He says revenue growth for the Grant acquisition from three areas.
“We see an ability to grow air and share in Metro markets as a result of being able to offer some form of original audiences.
“We do believe that there is a section of advertisers in the regional markets that will benefit from working with a metro partner so we see growth coming within the actual core radio business or brand itself.
"And the third area is in digital revenues. That might take a little longer to come through.”
ARN is investing $8 million to $9 million in digital audio and accelerated original podcast content creation.
National youth brand The Edge is being relaunched, distributed on iHeartRadio, broadcast radio and DAB+, anchored in hip hop and RnB, driven by content, and reflective of an under-served genre of youth culture in commercial radio.
“It's a really exciting time for digital audio and for radio businesses like ourselves,” he says.
“The resilience and robustness of radio is there to be seen. Revenues are returning, audiences are still listening, yield and rates are holding up and growing as we recover even more.
“And I think it's incumbent upon us to invest in future returns for shareholders.
“We've already clearly articulated the strategy there; we're investing in podcasting, in the creation of original content, in the ability to recruit digital data capability and sales people.
“We're investing in live streaming, which we think could be a very significant revenue driven driver in the next two to three years.
“And we're also investing in the Edge, which is something that we've looked at for the last number of years … this is that money.”
Slides from the briefing of analysts:
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