Rohan Lund.
Southern Cross Media's cost cutting program, which has already delivered $30 million of annualised SCA-Seven West merger synergies a year ahead of schedule, is now looking at "middle management" and "corporate".
The company, which this week reported full year results, in June announced an expansion of the program to $145 million to $150 million of annualised savings.
Part of the cuts included 250 jobs, gone before the end of June, which contributed to the first $30 million of the program.
However, not all savings have been labour related. Part of that has been content purchasing efficiency and better procurement.
Southern Cross Media Group reported year to June revenue down 4.5% of $1.87 billion in a “tough” advertising market. Costs for the year to June were down 3.1%.
“One of my priorities and really a part of the strategy for the group is reimagining the way we work,” CEO Rohan Lund told analysts in a results briefing.
“We know we have to be more efficient in delivering the audiences and delivering for advertisers.
“Like all businesses, we'll continue to focus on costs. That will mean looking at middle management, looking at corporate costs, looking across the group.
“If there's a better way to do something, we'll find it. It's a major focus across everything we're doing in the group, and we certainly don't see the cost out program as the end of our efforts in terms of looking at our cost base.”
Southern Cross expects total operating expenses to grow below inflation.
“We're expecting some one-off costs from major sport events this year, and that is the recently concluded Glasgow Commonwealth Games and the Rugby League World Cup in October and November.”
The full benefit of the cost cutting program will flow through in the next financial year.
Southern Cross reported a tough market in the year to June.
Currently television revenue is tracking roughly flat year on year. July is slightly up.
“The market itself, we understand, is down mid single digits but we've been offsetting that with stronger share gains again, and with help from the very successful Commonwealth Games,” Lund said.
“Audio revenue in the first (September) quarter is tracking up low single digits, and publishing revenue is also holding steady.
“It's been a very strong start in July. More broadly, the advertising market is still short and volatile, and sentiment amongst consumers and advertisers is mixed.”
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