Southern Cross Media Group (ASX:SXL) used its half-year results call to outline the first set of financial results delivered as a merged entity following the completion of its scheme of arrangement last month, while also addressing leadership changes announced to the market the prior day.
Management changes framed as push to accelerate integration
Executive Chairman Heith Mackay-Cruise said the board viewed the announced management changes as “significant,” but positioned them as steps to accelerate execution of the group’s strategy and to more quickly realize merger benefits. He said priorities include speeding up revenue and cost synergy initiatives and developing new customer solutions, including through innovative use of data.
During Q&A, Mackay-Cruise told analysts that the “strategic intent” behind the merger remained unchanged and said the leadership changes were about accelerating delivery and execution. Asked if this meant a new management team was needed to execute the merger, he responded affirmatively.
Merger creates integrated multimedia platform and targets cost savings
Management described the combination of Seven West Media’s free-to-air television, 7plus streaming, and publishing assets with SCA’s audio and digital audio platform as creating a “leading integrated multimedia platform.” The company pointed to combined reach in regional Australia, stating it holds 73% of regional radio listeners and a 46% share of regional TV viewers.
The group said it plans to achieve at least AUD 30 million of cost savings, targeting fiscal year 2027 for delivery.
Pro forma first-half results: lower earnings amid soft market
On a pro forma basis for the merged group, management reported December-half revenue of just over AUD 1 billion, down 1.5% versus the prior corresponding period, which it attributed to a challenging economic and advertising environment despite share gains in audio and television.
- Revenue-related costs: down 1.2% to about AUD 160 million
- Non-revenue-related costs: up 0.6% to AUD 740.4 million
- EBITDA: AUD 106.9 million, down 14.5%
- NPAT: AUD 34.7 million, down 16.5%
- Net debt: down 4.8% to AUD 338.2 million
The company said it did not declare an interim dividend, emphasizing a focus on reducing debt. Pro forma cash conversion was reported at 92.8% and pro forma leverage at December was 1.77x. Management said debt reduction remains the priority, with a target to get leverage below 1.5x, which it said would support balance sheet strength and “in due course” the resumption of dividends.
Seven West Media: revenue down, audience and share gains, 7plus growth
Management said Seven West Media delivered a record TV revenue share in the December half while maintaining operating cost and capital discipline. For the half, Seven West Media revenue declined 2.7% to AUD 792.2 million, with TV revenue down 2.7% and The West Australian newspapers declining by a similar percentage.
Revenue-related costs declined 2.2% to AUD 117 million, while non-revenue-related costs increased about AUD 8 million (1.3%) to AUD 608.3 million. Management said cost actions partially offset inflation and an uplift tied to the renewed AFL rights agreement. Seven West Media’s EBITDA declined 28.7% to AUD 66.9 million and net profit fell 42.2% to AUD 21.9 million. Net debt was reduced 3.3% to AUD 277.4 million.
On audience trends, the company said total TV audiences across the industry grew in the half, up 2.6% in total people and 4.3% in 25-54-year-olds, with BVOD growth offsetting broadcast declines. Seven’s total TV audience growth was said to exceed the market, up 3.4% in total people and 4.7% in 25-54s. Seven’s TV revenue decline of 2.7% was described as outperforming a market that declined 10%, and the network reported a record total TV revenue share of 44.1% in the half, up 2.7 points.
Management said 7plus “now leads the market,” reporting a record 7plus revenue share of 44.2% for the half, up 7.4 percentage points. 7plus revenue grew 15%, and management cited audience growth of 55% in all people and 51% in 25-54s. Daily active users increased 26% to 551,000, while streaming minutes were up 62% year-over-year. The company also pointed to premium sport as a driver of engagement, including increases in 7plus audiences for the AFL Grand Finals, The Ashes, and BBL.
In publishing, management said The West’s digital platforms recorded 56.8 million page views in December and a 5.7 million audience, up 27% year-over-year, while The Nightly’s audience rose 25% with more than 80% of consumption outside Western Australia. The West December-half EBITDA was AUD 14 million, down 5%, with revenue down 2% (AUD 2 million) due to advertising market conditions, partly offset by digital gains. Costs were reduced 1% through workforce efficiencies.
SCA audio: EBITDA up 28% as digital grows and costs fall
SCA’s audio business results were presented separately, with management describing a strong first half for fiscal 2026. John Kelly said revenue growth and cost reductions delivered audio EBITDA of AUD 40.1 million, up 28% year-on-year, with earnings growth in both broadcast and digital audio segments. He said operating cash flow was strong, reducing net debt to AUD 60 million.
Kelly said SCA has recorded 36 successive ratings victories in the 25-54 demographic, with roughly a 35% national audience share, and stated SCA has a 30% revenue share, which he said remains about 5% below its 25-54 audience share. He also said LiSTNR has more than 2.5 million signed-in listeners and that LiSTNR revenues are growing at double-digit rates and now represent “well over 10%” of audio revenues.
Chief financial officer Toby Potter walked through reported versus underlying audio performance. Reported group revenue increased 3.2% to AUD 216.5 million and EBITDA rose 17.5% to AUD 28.4 million, while NPAT from continuing operations was AUD 1.2 million, reflecting non-recurring costs tied to the merger and audio cost base restructuring. Potter also said expected profit share proceeds from discontinued operations (assets divested to Network 10 in 2025) were reduced by AUD 9.6 million due to a decline in Network 10 audience share, weaker-than-expected regional television markets, and a delay in expected synergy realization.
On an underlying basis, Potter said audio revenue grew across broadcast and digital, total expenses declined, EBITDA increased 28% to AUD 40.1 million, and margins improved by 3.6 points. Underlying NPAT increased to AUD 12.8 million, up AUD 9.2 million year-on-year. He said depreciation was down 18% due to an increase in LiSTNR’s useful life.
Potter also detailed segment performance, noting broadcast radio revenues grew 2% in a declining market, with metro share gains helping offset a 7% decline in the metro radio market. Regional radio revenue declined overall, though local radio revenue grew 5% on strong local sales activity. Digital audio revenue increased 14% and EBITDA improved to AUD 2.8 million, with digital audio EBITDA margins rising from 0.3% to 11.2%.
For current trading, management said audio revenue in January was up 4% year-on-year, and it expects audio revenue in the third quarter to be broadly flat. Total TV revenue in January increased 3%, driven by premium sport and digital growth, though the company expects total TV revenue in Q3 to be down 2%-3% including the impact of the Winter Olympics, with revenue share flat year-on-year. The group said it has identified AUD 20 million in new television savings initiatives for implementation in the second half.
For fiscal 2026, management is targeting group revenue of AUD 1.91 billion to AUD 1.92 billion, total costs of about AUD 1.7 billion (down from AUD 1.71 billion in fiscal 2025), and EBITDA of AUD 200 million to AUD 220 million, compared with AUD 233 million on a like-for-like basis in fiscal 2025.
About Southern Cross Media Group (ASX:SXL)
Southern Cross Media Group Limited, together with its subsidiaries, engages in the creation of audio content for distribution on broadcast and digital networks. It operates in two segments, Audio and Television. The company owns 99 radio stations in FM, AM, and DAB+ radio, as well as 34 regional radio stations; broadcasts 93 free to air TV signals in regional Australia; operates LiSTNR, an audio destination for consumers housing radio, podcasts, music, and news; and offers sales representation for open audio platform SoundCloud and Sonos Radio.
