Solid Growth for ARN in the Year Ending June 2012
Despite subdued market conditions, the Australian Radio Network (ARN) produced a solid financial result in the 12 months ending June 2012 (JYE 2012) on the back of impressive ratings improvements in some key markets and demographics.
ARN, Australia’s second largest commercial metropolitan radio group in terms of revenues and profits, achieved a financial trifecta by: increasing its revenues in a flat overall metro radio ad revenue market environment, continuing to maintain control over operating costs and consequently generating good growth in earnings before interest and tax (EBIT) over the year ending June 2012.
While ARN, like its locally based co-owner APN News & Media Limited (APN), has a 31 December financial balance date, Global Media Analysis (GMA) re-cast data contained in APN’s half-yearly reports to the Australian Securities Exchange, in order to restate ARN’s key financial performance indicators on a June year end (JYE) basis extending back over an nine year period to JYE 2004.
GMA’s analysis shows that, during JYE 2012, ARN managed to improve each of its three key financial performance metrics by:
- increasing total revenues by 6.8% to $138 million;
- limiting operating cost growth to only 4.5% or $91 million; and
- growing EBIT by 11.7% to $47 million, which represented an improved profit margin of 33.9%.
The impressive financial performance in JYE 2012 also represented a welcomed financial turnaround for ARN, which undoubtedly would be satisfying to the current management team who have worked hard over the past couple of years to reverse a number of serious adverse trends which had included: some disappointing ratings results in the three East Coast metro radio markets; below market revenue growth; declining margins; and reduced profits.
A Return to Solid Revenue Growth
After declining for four consecutive years between JYE 2007 and JYE 2010, ARN’s revenues increased over the past two years, with JYE 2012’s growth of 6.8% being sizeably above the metro radio industry’s norm. ARN’s above-market revenue growth in JYE 2012, reversed a six year trend between JYE 2006 and JYE 2011 when the network under-performed relative to the overall metro market.
Between JYE 2004 and JYE 2011, ARN’s revenue growth was fairly anaemic. For example, in the five years between JYE 2004 and JYE 2008 which preceded the Global Financial Crisis (GFC), ARN’s revenues had experienced a compound annual growth rate (CAGR) of just 2.4%, while post the GFC the CAGR was reduced to only 0.2%.
You can download the full repost here: Download