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.
Frequently Asked Questions about this Article…
Southern Cross Austereo reported a 6.5% fall in sales revenue to $642.6 million, mainly because regional TV stations—which source programming from Ten Network—suffered poor ratings. TV revenue was down 12.9% to $214 million, while metropolitan radio revenue also slipped 4% to $262.5 million (regional radio improved slightly to $176.2 million).
The high-profile 'UK incident' prank on 2Day FM and other scandals hit ad revenues and market share. Southern Cross Austereo suspended advertising on 2Day FM after the prank, and the company's market share dropped to 33.3% before recovering to 35%, down from a peak of 38.7% two years earlier.
Yes. The group made a net profit of $96.1 million for the year to June 30, up 1.2% from the prior year. That result was helped by $10.4 million in proceeds from a forced sale of a Queensland radio station to comply with media reach rules.
CFO Stephen Kelly said the company is confident in Channel Ten's three‑year strategy and expects the gap with other broadcasters to improve as better ratings and refocused sales efforts start to take effect in coming years.
Investors reacted positively to the profit result, sending Southern Cross Austereo shares up 7.1% to $1.585 following the announcement.
The group declared a final fully franked dividend of 4.5c per share, down from 5c per share in the prior year.
The company received $10.4 million from the forced sale of a radio station in Queensland to comply with media reach rules, and that sale boosted the reported net profit for the year.
Chief executive Rhys Holleran described the advertising market as difficult and said he did not expect it to get any easier, indicating ongoing pressure on ad revenues.
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