DJ prank a blow to Southern Cross
The company said it was confident its key TV program supplier, Ten Network, could turn around its fortunes.
The main cause of a 6.5 per cent fall in sales revenue to $642.6 million was its regional TV stations, which get their programs from the poorly performing Ten. TV revenue was down 12.9 per cent to $214 million.
"We are confident about what Channel Ten are doing," said Southern Cross Austereo chief financial officer Stephen Kelly. "They presented to us a very solid and robust strategy for the next three years on what they are trying to do with programming.
"We are very supportive, the gap [with other broadcasters] is expected to improve as better ratings and refocused sales efforts start to impact in coming years."
Revenue from the company's metropolitan radio stations, which include the Today and Triple M networks, fell 4 per cent to $262.5 million. Regional radio revenue improved slightly to $176.2 million.
Scandals involving presenter Kyle Sandilands and what the company called the "UK incident" hit its market share and ad revenues.
Austereo suspended all advertising on 2Day FM after a scandal involving the suicide of a British nurse, who was taken in by a prank call by presenters Mel Greig and Michael Christian. The pair phoned the hospital where the Duchess of Cambridge was being treated for a pregnancy-related illness, pretending to be the Queen and Prince of Wales.
Southern Cross Austereo's market share fell to 33.3 per cent earlier this year, before recovering to 35 per cent, still well down on a peak of 38.7 per cent two years ago.
The company made a net profit of $96.1 million in the year to June 30, up 1.2 per cent on the previous year. The result was boosted by $10.4 million in proceeds from the forced sale of a radio station in Queensland to comply with media reach rules. Investors liked the result, sending its shares up 10.5¢, or 7.1 per cent, to $1.585.
Chief executive Rhys Holleran described the advertising market as difficult. He did not expect it to get any easier.
The group declared a final, fully franked, dividend of 4.5¢ a share, down from 5¢ last year.
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Southern Cross Austereo’s sales revenue fell 6.5% to $642.6 million mainly because regional TV stations—which rely on programming from the poorly performing Ten Network—saw TV revenue drop 12.9% to $214 million. Scandals that hit ratings and ad sales also contributed to the revenue decline.
The royal prank—where presenters Mel Greig and Michael Christian called a hospital—led Austereo to suspend all advertising on 2Day FM after a related suicide, and together with other scandals (including presenter Kyle Sandilands), it reduced market share and ad revenues. Market share fell to 33.3% before recovering to 35%.
The group reported a net profit of $96.1 million for the year to June 30, up 1.2% on the previous year. The result was helped by $10.4 million in proceeds from the forced sale of a Queensland radio station needed to comply with media reach rules.
TV revenue was the weakest area, down 12.9% to $214 million. Metropolitan radio revenue (including the Today and Triple M networks) fell 4% to $262.5 million, while regional radio revenue improved slightly to $176.2 million.
CFO Stephen Kelly said the company is confident in what Channel Ten is doing, noting Ten presented a ‘solid and robust’ three‑year programming strategy. Southern Cross Austereo said it is supportive and expects the gap with other broadcasters to improve as better ratings and refocused sales efforts take effect in coming years.
The group declared a final fully franked dividend of 4.5 cents a share, down from 5 cents a share in the prior year.
Investors responded positively to the profit result: shares rose by 10.5 cents, or 7.1%, to $1.585 following the announcement.
Chief executive Rhys Holleran described the advertising market as difficult and said he did not expect it to get any easier, signaling continued headwinds for ad-driven revenue.
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