2014 Annual Review of Metro Radio Financials
Financial performance in the 2014 fiscal year was fairly benign for metropolitan commercial radio. Total revenues were virtually flat and operating profits and margins declined slightly. During the year, the FM sector outperformed the AM, while the stand-out corporate performers were ARN and Pacific Star Network.
These were the top line conclusions of the 2014 annual review of metropolitan commercial radio conducted by Global Media Analysis, which measures the financial performance of the five metro radio groups whose shares, or whose parent company shares, are listed on the Australian Securities Exchange (ASX).
The five companies included in the review were: the Australian Radio Network (ARN); Fairfax Media (FXJ); Macquarie Radio Network (MRN); Pacific Star Network (PNW) and Southern Cross Austereo (SXL).
The highlights of GMA’s 2014 metro commercial radio’s annual review were:
- Total revenues were virtually static, declining by a fractional 0.2% to $578m; with a 1.6% increase in FM revenues being largely offset by a 4.1% decline in AM revenues;
- ARN was the top corporate sales performer with a 5.5% increase in total revenues and PNW was the only other metro group to record revenue growth (of 1.6%); while FXJ’s 6.1% decline represented the poorest revenue result;
- Metro operating expenses (opex) of $419m were limited to a marginal 0.9% increase during the year, with a 2.1% increase in FM costs more than offsetting a 1.2% decline in AM expenses;
- A modest 2.9% fall in aggregate metro radio operating profits to $159m, as measured by earnings before interest tax depreciation & amortisation (EBITDA), was the result of a 0.6% increase in FM sector profits being swamped by a sizeable 17.7% EBITDA reduction in the AM sector;
- PNW and ARN were the only broadcasters to increase operating profits during the year (by 16.8% & 9.8% respectively), while FXJ recorded the largest decline in EBITDA, with a 26.5% fall;
- EBITDA margins of 32.9% in the FM sector were more than double those of AM and ARN again had the industry’s highest margins; and
- Trends in metro earnings before interest and tax (EBIT) exhibited a similar pattern to EBITDA.
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