KIIS owner HT&E swings to full year loss

A weak ad market continues to wreak havoc, with radio group HT&E swinging to a loss after a drop in revenue.

KIIS broadcasters PJ Harding and Jase Hawkins at the KIIS FM studio in Melbourne. Picture: David Geraghty

The difficult Australian advertising market continues to wreak havoc on the media sector, with radio group HT&E swinging to an annual net loss amid a 7 per cent drop in revenue.

The operator of radio stations such as KIIS, Pure Gold and The Edge has booked a net loss of $14.2m for the 12 months to December 31, which includes proceeds from the sale of its outdoor advertising business Adshel for $570m. Full year revenue fell to $252.7m from $271.8m a year earlier. In 2018 the company booked a net profit of $225.5m.

However, HT&E managed to eek out a 5 per cent rise in annual underlying earnings of $75.6m from $71.8m a year earlier, helped by cost cutting, and said it had the “strongest balance sheet” across the media sector, with net cash of $111m and $250m in undrawn debt.

Chairman Hamish McLennan said the group was in a “very strong position delivering great results and winning market share in a tough cyclical advertising market”.

“The company is highly profitable, cash generative with a new lean corporate structure that leaves it poised to capture upside in any recovering ad market,” he said in a statement.

HT&E chairman Hamish McLennan. Picture: John Feder/The Australian

“We have made some difficult but correct decisions regarding selling non-core assets and on top of this the potential sales process for Soprano and Lux Group could deliver substantial uplift for shareholders.”

Mr McLennan said the group had increased its dividend, paying between 60 to 80 per cent of its profit to shareholders, and that its ongoing on-market share buyback was earnings accretive for shareholders.

“We also have the flexibility to explore the right strategic opportunities in a market that may consolidate further,” he said.

On the outlook, ARN said market trading conditions across radio last month were consistent with the second half of 2019, with the group keeping ahead of the market with “mid-single digit declines”, supported by strong cost management.

In Hong Kong, HT&E reported “some recovery” from falls in the second half of 2019, due to the easing of political protests.

So far no bookings have been cancelled due to coronavirus, but clients were “noncommittal” for the second quarter as the impact of the outbreak is still being assessed, HT&E said.

.