ARN Media’s profit fall as hits to advertising impact the company
Radio company ARN Media has been hit by falling profits but remains focused on acquiring rival company Southern Cross Austereo.
ARN Media – the owner of radio networks KIIS FM and Gold – has been impacted by tougher economic conditions and advertising challenges in the past 12 months.
In the company’s 2023 annual report, released on Thursday, it showed group revenue fell by 3 per cent to $334.3m and EBITDA plunged by 22 per cent to $71.6m.
Profit after tax also fell by 33 per cent to $32.3m.
ARN’s total operating costs increased by 2 per cent to $270.3m and digital revenues rose by 36 per cent to $19.8m.
ARN chief executive officer and managing director Ciaran Davis said the company is “fighting hard for revenue” against other media and other radio competitors.
“The big driver of radio’s decline has been government and political spend off the back of an election in 2022,” he said.
“We’ve got audiences that are growing. They are listening to radio, they are listening to catch up podcasts and terrestrial and digital formats.
“The challenge for us is the broader market but we’re fighting hard with the integrated sales team that we have to sell metro, regional and digital.”
The company is also forging ahead with its proposed acquisition of Southern Cross Austereo and Mr Davis said he remains “optimistic” the acquisition of SCA will proceed.
“The rationale for this proposal is very compelling as we see a significant value creation opportunity by bringing together ARN Media and SCA radio and digital audio assets,” he said.
“We remain very committed to delivering a clear and compelling transaction for SCA shareholders and we absolutely see the ability to unlock material value creation for those sets of shareholders.”
In June ARN acquired a 14.8 per cent share in SCA and spent $38.3m to acquire the equity interest.
For shareholders of both companies it would result in a bigger radio reach and station numbers would climb from 47 to 88.
The company’s biggest radio stars include KIIS FM breakfast duo Kyle Sandilands and Jackie ‘O’ Henderson and the pair have secured a contract until 2034, while Melbourne’s Gold 104.3FM breakfast host Christian O’Connell has signed a five-year deal that will see him through until 2029.
Mr Davis said these long deals are “very unusual” to ensure rival outlets don’t poach their talent.
“We don’t want to go through a period of potential poaching by competitors or global players every three or four years when normal contracts renew,” he said.
The Kyle and Jackie O top-rating show which airs in Sydney is set to arrive in Melbourne this year but the annual report did not specify a date, instead just stating the program will commence in “2024 on a date to be confirmed.”
The company will pay a full-year dividend of 7.1 cents.
More Coverage
Report on ABC’s ‘doctored audio’ scandal blames lawyers
A report has blamed ABC lawyers for failing to pass on complaints by former commando Heston Russell that extra gunshots had been edited into an ABC news report.
‘Pressure from above’: ABC executive pushed by Buttrose
Christopher Oliver-Taylor was under pressure to sack Antoinette Lattouf after Ita Buttrose made clear she was ‘deeply unhappy’ with action taken on the stand-in radio host, the Federal Court has heard.