Southern Cross flags $30m in cost cuts amid takeover talks
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The news: Southern Cross Austereo has started work on a $30 million cost management program that is set to realise $20 million in savings through the 2024 financial year, as it continues to assess a takeover bid from its radio rival ARN Media and Anchorage Capital Partners.
The numbers: The company, which owns the Triple M radio network and Listnr podcasting platform, reported revenue during the six months to December 2023 of $252.6 million, down 2.9% on the $260.1 million during the prior corresponding period.
Its EBITDA for the half was down $29.5% to $31.1 million, while net profit was down 71% to $4.4 million.
Television revenues fell 11.1% to $53 million, amid sustained weakness in the TV advertising market, while audio revenue was flat at $199.6 million.
Southern Cross said its cost management review would deliver $30 million in savings and that the full benefit would be realised in FY25. The program would realise $20 million in savings during FY24, mostly in the second half.
The company's shares fell 3.66% in early trading on the ASX.
The context: Southern Cross said it continues to grapple with a challenging advertising environment, but that broadcast radio revenues are tracking ahead of the market. The company expects its Listnr platform to break even through the June quarter.
The company said discussions with ARN and Anchorage are ongoing as the parties move ahead with due diligence on the deal.
What they said: “Our strategic cost management review has delivered significant cash savings, setting us up for improved results in the second half of this year and future years,” John Kelly, SCA chief executive, said in a statement Thursday.
The source: ASX announcement
