Pacific Star Network Limited (PNW) this week announced financial results for the fiscal year ended 30 June 2019 (FY19). The figures are for the first full year of operation after acquiring Crocmedia.
FY19 revenue of $67.0 million was up 140% and underlying EBITDA of $9.0 million (guidance: $8.75-9.25 million) was up 208% on the prior corresponding period (pcp), respectively.
The company noted comparison to the pcp is cautioned with the pcp result only including part year contributions from recent acquisitions.
PNW owns AM commercial broadcasting licenses and broadcasts 24/7 on 1116 SEN and a number of digital licences.
The revenues included a full 12-month contribution from Crocmedia (acquired March 2018) and a full 12-month contribution from AFL Publishing (acquired July 2018).
Activities during the year included acquiring a 25% shareholding in Melbourne United Basketball Club (July 2018) and the sale of Morrison Media magazines Frankie and Smith Journal (divested September 2018).
No cost of the Melbourne United shareholding was revealed.
The Morrison Media sale generated a total cash consideration of $2.400 million less working capital adjustments, resulting in a gain on sale of $0.506m. PNW said the disposal aligned with the group’s strategic direction focusing on sport-related content and complementary assets.
AFL Publishing Business
In July 2018, PNW’s wholly owned subsidiary Crocmedia signed an agreement with the AFL to acquire the AFL Publishing business. The business is responsible for numerous football related publications, including the iconic AFL Record publication, which has been the official match program for more than 100 years.
The AFL Publications business had a purchase price of $8.1 million comprising $5.850 million cash less working capital adjustments of $0.244 million and $2.250 million prepaid advertising to be retained by the AFL. The AFL Record performance was in line with expectations, with revenue of $6.846 million and net profit after tax at $2.269 million.
Subsequent to FY19, several additional strategic acquisitions were announced including:
Acquisition of 23 Radio Licences
In July 2019, PNW signed agreements to acquire Hobart 1629 AM frequency commercial radio broadcasting licence and 23 narrowband area radio licences covering several regional radio markets as well as Brisbane, Adelaide, Sydney, Perth, Darwin, Alice Springs and Gold Coast.
The deal involved a total cash consideration of $6.875 million with $0.250 million paid in December 2018, a further $0.625 million paid in July 2019, and the balance to be paid upon completion.
PMW said the licences will transform its radio platform ownership, significantly expanding its audience reach and providing opportunity to leverage its extensive content portfolio.
PNW will progressively activate licences having regard to available content solutions and respective market considerations. Markets where PNW does not currently provide syndicated content will be a key focus. Some licences have existing broadcasts, which will continue without interruption.
Chairman Craig Coleman and managing director Craig Hutchison said management was confident that near-term double-digit earnings growth can be achieved, while continuing to invest and scale the business for ongoing earnings growth and strategic value.
PNW noted it is actively assessing several corporate and operational opportunities, which are aligned with its strategy and can leverage its unique business attributes.