After previously selling its regional newspaper business to News Corp, divesting its New Zealand operations and with plans to sell Adshel to oOh!media, HT&E’s future is all about radio.
Below are the highlights from the half year results.
• Revenue from continuing operations up 10% to $137 million including Adshel, revenue would have been up 1% to $235 million
• Strong group EBITDA result up 28% to $30.4 million including Adshel, EBITDA would have been up 11% to $51 million
• Strong performance from ARN: EBITDA growth of 7% normalised for ACMA licence fees, compared to reported EBITDA growth of 13%
HT&E has released its results for the 6 months ending June 30, 2018. On a reported basis revenue from continuing operations was up 10% to $137 million compared with $124.8 million in the previous year. Assuming Adshel was not being sold, revenue would have been up 1% to $234.8 million compared with $232 million.
The Group delivered a strong EBITDA result from continuing operations, up 28% to $30.4 million in the first half, led by a solid first half for the Australian Radio Network (ARN). Including Adshel, EBITDA would have been up 11% to $51 million in the half.
HT&E CEO and managing director Ciaran Davis said: “We have maintained our position as Australia’s #1 radio network and had some significant ratings wins including WSFM in Sydney achieving its best result in 20 years. The changes we have implemented across the network have delivered market outperformance for both revenue and agency growth.
“Adshel made significant inroads into reinstating the national digital network and after the Metro Trains Melbourne assets went live in April the business saw an immediate uplift in advertiser engagement. We are confident that there’ll be further improvement in the second half once digital street furniture conversions start in the Public Transport Victoria contract.
“Our involvement in esports is progressing well with the launch of the inaugural Gfinity Elite Series in the first half delivering strong partnerships and sponsors and a second season planned for November.”
Australian Radio Network
• ARN revenue growth of 7.3% compared to market growth of 5.9%
• Costs up 11% (with the benefit of 2017 licence fee cuts, costs up 7%)
• Best H1 ratings performance
• WSFM achieved its best result in 20 years with its number one overall FM rating
• Kyle and Jackie O #1FM in breakfast for 22 consecutive surveys
• Successful launch and integration of 5 new shows
• Christian O’Connell launched in June on GOLD104.3; #2 FM breakfast show (Survey 4, 2018)
• iHeartRadio – 1.7 million+ app downloads; 1.1 million+ registered users
• Monetisation of digital audience
ARN outperformed the overall market in the first half with revenue growth of 7.3% year on year (9% after the impact of changes to accounting standards) to $118.0 million, compared to market growth up 5.9%.
Cost growth (excluding normalising for the impact of licence fee cuts in 2017) slightly exceeded revenue growth, with reported costs up 11% to $80.3 million. With the benefit of the 2017 licence fee cuts, reported costs were up 7%.
ARN’s plans for 2018 included growing ratings and gaining revenue share by recruiting and retaining the best radio talent in Australia. The focus has also been on building the future of audio entertainment in Australia, with an expanded digital offering and iHeartRadio as a key strategic pillar.
After ending 2017 as the leading national radio network in Australia, ARN has made a number of changes to on-air talent. New breakfast shows on KIIS in Melbourne, 96FM in Perth and a new national KIIS drive show commenced in January, and in June the Christian O’Connell Breakfast Show launched on Gold 104.3 in Melbourne.
While content changes saw an initial decline in ratings from the highs of survey 8 2017, by survey 4 2018 ARN was delivering steady ratings improvement. In Sydney, WSFM achieved its best result in 20 years with its number one overall FM rating, while Jonesy and Amanda held the #2FM breakfast show, only behind Kyle and Jackie O, who have held #1FM in breakfast for 22 consecutive surveys. GOLD in Melbourne was #1FM overall, with breakfast growing share to achieve #2FM in the first survey for the Christian O’Connell Breakfast Show. MIX102.3 Adelaide retained its clear number one overall position, which it has held for 17 consecutive surveys.
iHeartRadio continues to grow, and now houses Australia’s most comprehensive library of podcasts, sourced from partnerships with numerous International Podcast libraries. iHeartRadio app downloads now exceed 1.7 million with more than 1.1 million registered users.
In late 2017 ARN began commercialising the iHeartRadio audience utilising dynamic advertising insertion technology developed by AdsWizz. Plans to further expand the iHeartRadio offering are currently being developed.
• Revenue down 9% to $98.9 million; up 2.1% when normalised for the impact of the Yarra Trams contract loss in 2017
• EBITDA of $20.6 million, down 7%
• Network revenue impact of Yarra Trams in first half less than initially estimated
• Agreement to sell Adshel to oOh!media for an implied enterprise value of $570 million
The key challenge Adshel faced in the first half related to the loss of the national Adshel Live digital network, with Melbourne digital street furniture unable to be offered to advertisers. Significant effort has gone into reinstating this network. Metro Trains Melbourne (MTM) assets went live in April and saw an immediate uplift in advertiser engagement with the digital network. This is expected to improve further once digital street furniture conversions commence in the Public Transport Victoria contract, which is expected in the second half. Adshel Classic formats remained resilient in the first half with overall yield flat.
The inaugural Gfinity Elite Series commenced during the first half. As Australia’s first city-based professional esports franchise league, the Elite Series sees six teams compete over seven weeks across three game titles: CS:GO, Rocket League and Street Fighter V.
Hosted in a purpose built, dedicated esports arena at Hoyts Entertainment Quarter in Sydney, content was streamed live on Twitch, while Rocket League was broadcast live on One.
Elite Series Season 1 was a great success with major sponsors Dell Alienware, Dare Iced Coffee and Logitech on board, cumulative viewership across both Twitch and One of more than 4.8 million people and more than 3.5 million unique streaming viewers. Elite Series Season 2 will commence in November 2018.
• Solid H1 market conditions are continuing into H2. Forward bookings are currently indicating revenue growth of circa 5% to 6% against improving comparatives (H2 17: up 5%)
• Cost growth is tracking slightly ahead of revenue growth, driven by cost of sales, increased digital headcount and further reinstatement of prior year savings
• After adjusting for $2 million of Yarra Trams revenue in July 2017, July revenues finished close to 5% up on last year. For the remainder of Q3, visibility across both markets is good, and after adjusting for a further $4.7 million of Yarra Trams revenues in Q3 2017, total bookings are approximately 9% ahead on same time last year