Prime Media Group is reducing its workforce and implementing pay cuts to deal with the economic fallout of the coronavirus pandemic.
The media company reported a revenue decline of $20.2 million, or 12.7%, for the financial year to April on the year prior. Revenue for the month of April declined by $6 million, or 38.1%, on the year prior.
The media company, like many across the industry, has been dealing with weaker advertising revenue during the pandemic which has caused many businesses to wind down their marketing.
As part of cost-saving measures, Prime’s key management staff have agreed to a temporary 20% reduction in base salary and will forgo short and long term incentives for the current financial year. Non-executive directors have agreed to a temporary 20% reduction in director fees.
The media company has also enacted a hiring freeze, reducing its workforce by about 10%.
“Advertising expenditure in regional markets has slowed dramatically in response to restrictions to stop the spread of the COVID-19 virus,” says Prime CEO Ian Audsley.
“Forecasting regional advertising revenue continues to be problematic as we face a prolonged economic downturn and associated decline in advertising activity. Prime’s Board and senior management have taken steps to ensure the company continues to operate efficiently in these difficult times”.
Prime Media has registered for financial assistance under the government’s JobKeeper program. It’s also planning to apply for a grant under the government’s $50 million Public Interest News Gathering Program.
However, Prime Media says it’s “disappointed” it will not see material benefit from the government’s waiver of spectrum licence tax for commercial TV and radio broadcasters until January 2021.
The broadcaster says its national and local direct advertising revenues have been heavily impacted by weak consumer sentiment and significant declines in advertiser categories such as retail, household furnishings and the motor vehicle sector. It’s also been impacted by the suspension of the AFL season.
The company says it’s unable to provide an earnings outlook for this financial year due to the continued uncertainty.
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