ARN shares fall on half-year earnings
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More news: Shares in ARN Media fell 8.82% at 11:21am AEST, despite reporting earnings for the June half ahead of analyst expectations.
ARN Media posts earnings beat despite tough conditions
The news: ARN Media has posted an earnings beat for the June half and forecast revenue growth into the third quarter.
The numbers: The ASX-listed radio player home to the Kyle and Jackie-O show and iHeart radio reported underlying EBITDA of $35.5 million, flat on the same period last year and beating analyst expectations.
The company booked revenue of $168.1 million for the half, up marginally on the $165.9 million posted during the same period last year.
Net profit after tax attributable to shareholders was $10.4 million, down on the $14.6 million posted in the same period last year. However, this figure fell to a loss of $5 million when significant items net of tax were included, compared to $37.8 million the year prior.
The company declared a fully franked dividend of 1.2 cents per share.
E&P Capital media analyst Entcho Raykovski said in a note to investors that he expects the stock to outperform the market given the earnings beat.
The context: The company forecasted slightly improved revenues into the September quarter, driven by digital growth. Revenue for the half is estimated to be between 2% and 3% ahead of the prior year, with radio expected to grow some 1% and the company’s digital business forecast to grow roughly 25%, the company said in a trading update.
The company said people and operating costs remain between 2% and 4%, in line with previous guidance.
What they said: “ARN Media has delivered a competitive operational performance in 2024 despite the economic challenges faced by the Australian media sector,” ARN chair Hamish McLennan said in a statement.
“Critical to our performance were a number of key programs delivering increased and sustainable operating efficiencies, which are part of our $10 million annualised cost out program, ensuring we limit cost growth.
“These cuts reflect the tough environment facing Australian media. The industry needs market restructure and consolidation given the increasing pressures from global technology and media platforms and a government regulatory environment that has not kept pace.
“We have made no secret of the fact that we want to be part of an industry consolidation and are very disappointed that our indicative proposal to acquire SCA was unsuccessful as it represented a compelling proposition for both ARN Media and SCA shareholders.”
The source: ASX announcement
