Southern Cross slashes value of Triple M, Hit radio networks

The media group reported a slide in earnings and profit. But it says it has more listeners than ever, and revenues are holding up.

Southern Cross chief executive Grant Blackley. Picture: Hollie Adams

Southern Cross Media has recorded a 32 per cent slide in earnings and reported a $154m loss after slashing the value of its radio assets by more than $250m.

The disclosure came at the same time as the company announced Nick McKechnie would resign as chief financial officer after some eight years in the job. Mr McKechnie is moving to take up the role as CFO at Gurner Group in Melbourne

Excluding the writedowns, the company said net profit after tax was down 40.6 per cent to $28.6m for the 12 months to June 30, with revenues off 1.7 per cent to $519.7m.

Southern Cross runs the Triple M and Hit radio stations, and is a major regional TV broadcaster now affiliated with the Ten Network. Its television assets generated underlying earnings of $29.9m, flat on 2021. The company said, following a review by Grant Samuel, that Southern Cross had “concluded that value will be maximised by continuing to hold its television assets” after receiving underwhelming bids from interested parties.

The company will pay a fully franked dividend of 4.75c per share for the second half of the financial year, bringing the full-year fully franked dividend to 9.25c per share.

Southern Cross chief executive, Grant Blackley, said there were several factors that resulted in the collapse in earnings.

“We obviously had a change in government support that effectively came through, last year we had substantial JobKeeper payments that came through and of course there were other costs that had been forfeited through that prior year,” he said.

“We have now cycled over some $40m in JobKeeper that was received inclusive of (Public Interest News Gathering) funding and we ended up with $1.7m … within the period as it ran out to its natural end at the end of August 2021,” he said.

“Secondly you started to see those discretionary costs that started to be in suspense now naturally afforded back to the business at the same time as people came back to work and conducted their normal duties.”

The company’s streaming app LiSTNR has also continued to grow, recording 850,000 signed-in users since its inception in February last year up from 500,000 reported at the half-yearly results. Audio revenue rose to $392.9m, up 9.2 per cent.

Mr Blackley said commercial radio audiences continued to grow in the nation’s metro markets and they had reached record levels.

He said in the last radio ratings survey the company recorded an audience of 12 million listeners and was an increase of 7.6 per cent on the year prior.

Radio advertising is also continuing to rebound which Mr Blackley said was particularly noticeable among small to medium businesses which he said had suffered a “tough year” with lockdowns and supply chain issues.

But 2GB broadcaster Ray Hadley took a swipe at the company’s results on Monday – his comments came more than a year after Southern Cross stopped airing his program on its stations in NSW and Queensland.

“I still don’t know why they did it, as I mentioned before we rated in a number of the markets more than 40 per cent of the available audiences listen to the Ray Hadley program but they went another direction,” he said.