Regional TV broacaster Prime Media Group posted a full year profit of $7.35 million, up 159%, despite a weaker regional advertising market.
Advertising revenue was down 4.7% to $191.86 million, reflecting the absence of major events and difficult trading conditions in the lead up to, and during, the federal election..
Included the profit result are non-cash impairments of the television licences and other intangible assets of $14. million in the current year and $51.7 million in the prior year.
Shares in Prime fell 5% to $0.19.
"The impairment charges reflect the ongoing decline of the regional free-to-air television advertising markets and the contracted increase in program supply arrangements with the Seven Network," says the company.
Prime’s revenue in regional New South Wales and Victoria fell 5%, compared to the market decline of 4.1%.
Gains from the federal election did not match the uplift from the Commonwealth Games in the prior year.
CEO Ian Audsley says advertising in regional Australia faltered in the second half of the 2019 financial year.
“Overall, the regional television advertising market is subdued," he says.
"Revenue pace for July and August was behind that of the prior period(s), throughout September however Prime typically experiences a late run for placement within the AFL Finals series.
"We have limited visibility into the second quarter. Gains in certain national advertiser categories were softened by reduction in others, reflecting the current retail environment and soft consumer sentiment.
"However, discussions with advertisers point to an improvement in demand for Prime’s major markets throughout the latter months of this calendar year.
"At local level, TV ad markets are soft and look challenged going forward with consumer confidence impacted by prolonged drought conditions and the arrival of tech giants Google and Facebook in what have traditionally been ‘local media’ advertising markets.
"Prime expects trading conditions to improve in the second half in the lead up to the 2020 Tokyo Olympics."
The company's guidance for 2020 is for EBITDA (earnings before interest tax depreciation and amortisation) between $23 million and $25 million.
The 2019 numbers:
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