03/06/2016

 

Stellar Results for Murdoch’s Nova

 

Lachlan Murdoch’s Nova Entertainment radio group recorded a stellar set of financial statistics during calendar 2015.  Recently released financial accounts reveal that the metropolitan broadcaster realised a 39.5% jump in adjusted operating profits last year as a result of an impressive 13.1% increase in advertising revenues significantly outpacing both a 5.6% rise in adjusted operating expenses and only a modest 1.3% increase in total group listener numbers.

Last year’s exceptional earnings improvement enabled Nova, for the first time, to become metro radio’s second most profitable group, as measured by both adjusted earnings before interest tax and depreciation (EBITDA) of $62 million and adjusted EBITDA profit margins of 33.0%, displacing its long-time arch-rival Austereo, who up until 2013 had been the industry’s perennial top profit performer.

Nova’s impressive increase in advertising revenues to $187 million was substantially better than the 5% rise in total metro radio ad revenues over the same 12 month period and it represented the best revenue growth performance on a like-for-like basis of any metro radio group last calendar year.

Much of Nova’s above average revenue increase in 2015 is believed to have been the result of the group’s successful monetisation of both the ratings surges at its two smooth fm branded stations in Sydney and Melbourne, which over the past three years have increased their combined audiences by two-thirds, and also the continuing popularity of the group’s flagship five station NOVA branded network, which in CY 2015 retained its position as the #1 commercial metro radio network as measured by total listeners.

Perhaps as a precursor to a possible future sale or merger, a corporate restructuring occurred within the Nova Entertainment group of companies on 1 January 2015 when the operating assets of the group were transferred in to a new corporate entity at a price which appeared to represent an enterprise value of $420 million.

That valuation may reflect the owner’s starting point in any negotiations to either sell or merge the group sometime in the near future as part of any much-anticipated consolidation within the local media industry.


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Report date: 03/06/2016
Industry: Radio
Country: Australia
Topic: Finance
Document Number: GMA2016-04

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