Southern Cross Media Group experiences ‘challenging’ year after advertising markets hit

The media company has recorded a 20.1 per cent fall in full-year profit but its new boss John Kelly is optimistic about the next 12 months.

Southern Cross Media Group managing director and chief executive officer John Kelly.

Triple M and Hit radio stations owner Southern Cross Media Group has recorded a 20.1 per cent fall in full-year profit to $21.9m after experiencing a “challenging” 12 months.

The company’s incoming managing director and CEO, John Kelly, who was previously chief operating officer, said the results were a “pass mark” given the tough economic circumstances and he remained optimistic about the year ahead including the growth of its streaming platform, LiSTNR.

“Since December, broadcast media markets have been challenging and this is continuing into the new financial year,” he said.

“We are well positioned to benefit from expected improvements in advertising markets in the second half of the 2024 financial year.”

SCA’s television revenue fell by 15.5 per cent to $106.7m, while audio revenue was flat at $397.2m and down just 0.2 per cent from the prior year.

Earnings fell to $77.2m, down 12.2 per cent compared to the prior 12 months and group expenses were lower at $428.4m, down 2 per cent.

Net debt climbed to $105m, up 33.8 per cent, largely due to the company’s share buyback scheme.
Mr Kelly took over from outgoing boss Grant Blackley who departed the business after eight years at the end of June and he said there were positive signs ahead.

“From a digital audio perspective and our LiSTNR aspect, we’re delighted at the way it continues to track, it’s only been going for a little over two years … we’ve grown to 1.5 million sign-ups which we think is pretty remarkable and we want to get to two million by the end of next year,” he said.

Digital audio revenues climbed by 36.2 per cent year on year however TV revenue struggled – SCA has 96 regional television licences with most programming from Ten, but in some areas it receives Seven Network programming.

Mr Kelly said the regional television part of the company “weighed on our results during the year”.

“We are working constructively with our principal programming partner, Network 10, to enhance our collective offering to national advertisers and sponsors and to generate more reliable returns for our shareholders,” he said.

“Ten’s ratings performance in particular was softer than we would have hoped in ‘23 particularly in sport and other premium content shows.”

Mr Kelly said he was also focused on reducing the company’s overall costs – expenses were at $428.4m, down 2 per cent.

“We need to reduce our costs base … we are half way through a strategic cost review to identify $12m to $15m of costs that we’ll take out of the business of which we will benefit in the 2024 financial year,” he said.

The company will pay a fully-franked final dividend of 2.2c per share in October, taking the full-year dividend to 6.8c per share.