The advertising market is showing caution as interest rates rise, according to Grant Blackley, the CEO of broadcaster SCA.
He says the first four months of the financial year, July through October, were good for the media market broadly.
“Certainly that was a good period for us,” he told AdNews.
“Unfortunately, after multiple interest rate rises, and a bit of caution coming back in the market, what you did see was a bit of contraction across the months of November, December.
“It's a theme of every media company … and all of the data that we see from SMI and audited data from industry confirms that.”
The advertising categories that declined most included government (down 28.8%), consumer electronics (down 19.5%), and financial services (down 37.4%).
The broadcaster posted flat group revenue at $260.1 million for the half year to December, with net profit after income tax down 6.1% to $14.6 million.
But shareholders still get a payout, with a fully franked dividend of 4.6 cents a share.
Metro radio revenue grew 6.8% during the half, increasing its share of revenue when compared to 4.6% market growth. This was underpinned by record radio audiences.
Television revenue was down 9.5% to $59.6 million, mostly due to the lower spend by key national advertisers and subdued recovery by small and medium businesses.
And the television market is tracking 10% to 12% below last year.
A slide from SCA's presentation to analysts:
In the half to December, audio revenue was up 3.5% to $200.4 million.
LiSTNR reached 1.2 million signed-up users and monthly stream starts hit 5.9 million, compared to just 1.7 million two years ago.
Digital audio is where the growth is. Revenue grew 37.5% to $10.5 million, significantly exceeding digital audio market growth of 11%.
Blackley sees digital audio revenues up more than 65% in both January and February.
“That's starting to become a function of a growing market, that we've got a growing suite of products on the way through,” he says.
“All things radio look very strong. We have a very strong balance sheet with modest net debt on the way through.
“So it's about really mining … extracting the gold from a lot of the work that we've been doing in the last couple of years.”
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