Release Date: August 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Digital audio revenues grew by 57% in the second half of FY24, reaching $35 million.
- EBITDA profitability was achieved in Q4 of FY24, with LiSTNR expected to be cash flow positive in FY25.
- Cost management initiatives resulted in non-revenue-related costs being capped below guidance at $308.4 million.
- Metro radio revenue share has grown each month since December 2023, with a strong position in the 25 to 54 demographic.
- CapEx was reduced to $15.8 million in FY24, with further reductions to $10 million forecast for FY25.
Negative Points
- Group revenues declined by 1% year-on-year, with broadcast radio revenues down 1.7% and TV revenues down 8.6%.
- A statutory non-cash impairment charge of approximately $228 million was recognized for broadcast radio licenses.
- Net debt increased slightly to $107.5 million, with higher net financing costs due to the high-interest rate environment.
- The Board decided not to declare a final dividend for FY24 as the group prioritizes deleveraging.
- Operating cash conversion reduced to 67.2%, reflecting the timing of customer receipts.
Q & A Highlights
Q: Can you elaborate on the non-revenue-related costs for FY25 and the expected cost reductions?
A: We identified cost reductions of about $30 million in FY24 and are activating further cost reductions for FY25. Despite inflationary pressures, we aim to keep costs below the $309 million mark achieved in FY24. (John Kelly, CEO)
Q: What are the objectives and timeline for the new sales team in improving revenue share?
A: We expect continued improvement in revenue share, particularly focusing on the 25 to 54 demographic. Changes implemented in late December have already shown positive results, and we anticipate further gains in the coming months. (John Kelly, CEO)
Q: How do you plan to manage CapEx given the competitive landscape and investment needs?
A: We have completed significant CapEx investments in digitizing our network and building ad tech capabilities. Future CapEx will be around $10 million annually, focusing on maintaining and enhancing our digital infrastructure. (John Kelly, CEO)
Q: Are cost reductions focused solely on the radio division, or do they include TV as well?
A: Most cost reductions are focused on the radio division. Given the ongoing divestment process for our TV assets, cost reductions in TV are minimal. (John Kelly, CEO)
Q: Can you provide details on the impairment charge related to radio licenses?
A: The impairment charge of approximately $228 million after tax pertains solely to broadcast radio licenses, reflecting lower growth estimates for the segment. (Tim Young, CFO)
Q: What is the expected impact of the TV asset sale on EPS?
A: We are focused on achieving the best economic deal for the TV asset sale. Details will be provided once negotiations are finalized. (John Kelly, CEO)
Q: How are you addressing the competitive challenge in the Sydney radio market?
A: We have made recent changes to our Sydney breakfast team and are focusing on profitability and targeting the key 25 to 54 female demographic. Further changes will be announced in the coming weeks. (John Kelly, CEO)
Q: Why do you think the market is appraising your company poorly, given the share price decline?
A: Traditional media, particularly radio, has faced significant challenges over the past few years. We believe audio is underrepresented in ad spend and are working to improve this dynamic. Our focus on cost control and audience monetization should drive better financial performance and shareholder returns. (John Kelly, CEO)
Q: What are the components of the $1.5 million CPI broadcast infrastructure contracts?
A: These contracts include transmission and playout costs for our TV signals across regional Australia, managed by BAI and NPC. (John Kelly, CEO)
Q: Can you provide performance details for your regional TV franchises?
A: Our Tasmania franchise with the Seven Network performs exceptionally well, while the Ten Network assets align with their respective revenue and rating shares. Both franchises are profitable. (John Kelly, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
