Radio network Southern Cross Austereo (SCA) has seen net profit and revenue drop for the first half of the financial year 2018.
SCA's group net profit fell from $48.5 million in the first half of FY17 to $38.2 million. The company’s overall revenue came in at $333.3 million for FY18, representing a 5% drop when compared to the same period FY17, which was $351.8m. Earnings fell 15.7% from $347.8 million to $324.8 million.
One of the reasons profit dropped was the the recent divestment of its northern NSW TV business. It sold its Northern NSW TV business to Bruce Gordon's WIN television network last year for $55 million.
“These results reflect the culmination of two consecutive years of heavy lifting to improve SCA’s balance sheet,” SCA CEO Grant Blackley says.
“With the systematic divestment of non-core assets, including the Northern NSW TV licence and 45 transmission towers, the company has successfully reduced debt and leverage to improve the company’s financial health, laying the foundation for a successful refinancing of our debt facilities and accompanying reduction in finance costs.”
Excluding the divestment of the Northern NSW TV business, Blackley says regional media assets performed well, with revenues growing by 4.6%.
Blackley says investments in rebranding regional radio stations, increasing the number of regional radio surveys and educating media and advertisers about the benefits of regional audiences “has paid off”, with revenue from national advertisers in regional markets rising sharply by 12.8%.
SCA, which operates the Triple M and Hit networks, saw metro radio revenue for the group fall by 3% to $121.4 million in the first half. This was in part due to the poor performance of 2DayFM breakfast and declines at the Triple M Network.
"We re-iterate our commitment to improving 2DayFM breakfast," Blackley said. “Most recently we expanded the line-up and broadened the 2DayFM music format.”
Blackley also stressed that “digital radio is coming of age” and that the strength of its digital stations, that it has aggregated as collective audiences, is a big lure for advertisers.
In December, SCA revealed that Channel Ten's Family Feud host Grant Denyer was set to join the Hit Network. Denyer joined Em Rusciano and Ed Kavalee on Sydney’s 2Day FM breakfast show on weekdays from 6am in 2018. The breakfast show slot has been a tricky one for SCA, having axed Rove & Sam in 2016 due to plummeting ratings.
Melbourne-based Rusciano and co-host Harley Breen took over the slot but failed to make a real dent in Sydney breakfast – something SCA's head of content for Hit Network, Gemma Fordham, said will come in time.
Previously speaking to AdNews, Fordham said: “A lot of people still haven’t tried it."
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