On Tuesday, HT&E announced its full-year financial results for 2022. Statutory revenues were up 53% to $344.9 million, while underlying EBITDA was up 53% to $91.8 million.
Metropolitan broadcast advertising revenues grew 3% to $192.5 million, while regional advertising revenues grew 7% on a pro forma basis to $107.7 million. Increased revenue contribution from digital audio, up 8% on a pro forma basis to $14.6 million, also assisted overall.
HT&E declared a fully franked dividend of 5.2 cents per share.
Mediaweek spoke to HT&E CEO and managing director, Ciaran Davis about how the company’s assets have changed over the last year where the team will be focussing its attention, and whether there is any substance to the rumours of a Seven West Media / HT&E merger.
One of the biggest talking points for HT&E over the last 12 months was the acquisition of ARN Regional (previously Grant Broadcasters). For Davis, this acquisition was the driving force behind the results.
“We purchased 46 stations from Grant Broadcasters at the beginning of last year, and the integration of that is going really, really well. Integrations can be funny things, they can go off-kilter quite easily, but we’ve been really pleased with the progress that we’ve made this year.
“We’ve delivered 7 million of the 6-to-8 million revenue synergies we identified, which is a good result. Our regional revenues were up 7%, which was ahead of market at a time when people were distracted with new management structures, new ownership, and new commercial structures. It’s really pleasing that we’ve delivered top line revenue growth and EBITDA growth.
“We’re really pleased with the assets that we bought. It’s an incredible business, we knew that at the time. Listening to the pride, the passion, and the energy that everybody in regional – and metro – has for what they do gives us great confidence that we’re building a very good audio business.”
As well as acquiring ARN Regional, HT&E began 2023 with the announcement that the company would be selling its stake in private Australian communications software company, Soprano Design.
“We’ve been a shareholder of Soprano for many years, over 20 years,” says Davis. “As we’ve moved towards audio positioning within ARN, our 25% shareholding in Soprano was a bit of an outlier – we’ve been looking to exit at the right price for a number of years.
“Thankfully, we found a partner in Potentia who I think are very good for Soprano, and will allow that business to leap to the next level. It’s something that we were very cognisant of as we were looking to sell our minority stake.
By divesting its Soprano stake, Davis says that the extra money will go towards clearing HT&E’s debt.
“$66 million cash is a very good return for a minority shareholding position in a business that is not core to what we do. When the proceeds come through – we’re now waiting on FIRB approval, which we expect imminently – it means that we will have minimal net debt as a business on a balance sheet. I think that places us in a very enviable position within the Australian media.”
When asked what HT&E will be focussing its attention on over the coming year, Davis points to a series of projects both on air and behind the scenes. First on the list is a financial boost to the company’s operating expenses.
“We’re making a significant investment in OpEx in the digitalization of our systems, our processes, and our IT systems – post the acquisition that will make us a more efficient, easier to work in business. I’m looking forward to seeing the results of that come through.
“I’m looking forward to the ever-expanding role of our commercial teams as they go to market with all audio solutions. We’ve established a new function within the commercial team, and will be looking to be much more proactive on client solutions and engaging with clients, which I think will be really interesting.”
For the on-air aspects of the business, Davis says that the team will be focussing on maintaining its radio shares in an unpredictable market.
“The continued exposure to regional markets is something that we’re all excited by. I have a long history in radio, and it’s really encouraging and enlightening to see how radio still forms a huge part of local communities. That’s something that we don’t want to lose, ever, in this business – we’re very committed to that.
“Equally, it’s going to be a challenging year because of the macro environment that we’re in. We’re going to have to work very hard to deliver the ratings that we traditionally have had. We have the best on and off air talent, we’re going to work very hard to turn those ratings into revenue share growth – which is ultimately what our targets are this year.”
Off the back of the company’s financial results, Davis says that the pitch to advertisers will highlight the power of radio when it comes to delivering immediacy and ROI in a cost-effective way.
“When marketers, brands, and businesses are evaluating every dollar they spend, the efficiency of radio is exceptionally good. That will be something that we will be absolutely promoting in market.”
Potential Seven Merger
The last couple of weeks have seen reports popping up suggesting that HT&E could be in talks to enter an M&A tie-up with Seven West Media – although this is not the first time that a merger has been speculated on.
When asked whether there is any truth to the most recent reporting, Davis says that “We’ve had no contact from Seven.”
“We’ve heard nothing from Seven. That’s a rumour that’s been there for a long while, I think consolidation in media is a topic that everybody likes to talk about.
“There are merits for us, we can all see that, but at the end of the day what we are focused on is creating shareholder value. We are open and proactive to having discussions with whoever is interested in looking to create shareholder value – if it’s Seven, great, if it’s somebody else, great. In the meantime, we’re focused on our own business and delivering the best performance we can.”