Southern Cross Media Group (SXL) H2 2024 earnings summary

Executive summary

• FY24 revenue declined 1% to $499.4 million, with digital growth offset by declines in broadcast radio and TV; underlying EBITDA fell 14% to $66.2 million.

• A non-cash impairment charge of $228.3 million after tax was recorded for radio licences, reflecting lower growth estimates.

• LISTNR digital audio segment achieved EBITDA profitability in Q4 FY24, with digital revenue up 42% to $35 million.

• CapEx reduced to $15.8 million, completing major digital transformation investments.

• No final dividend declared for FY24 as deleveraging is prioritized; leverage at 1.87x EBITDA, within covenants.

Financial highlights

• Digital revenue grew 42% to $35 million; broadcast radio revenue declined 1.6% to $366.6 million; TV revenue fell 8.7% to $97.5 million.

• Underlying NPAT was $11.2 million, down 49% year-over-year; reported NPAT was a loss of $224.6 million due to impairment.

• Digital EBITDA loss narrowed to $10.9 million, with Q4 profitability.

• Free cash conversion increased to 86% on lower CapEx and dividends.

• Net debt at June 30, 2024, was $107.5 million; leverage ratio at 1.87x, within covenant limits.

Outlook and guidance

• Q1 FY25 audio revenues are pacing ahead of prior year, with continued short market conditions.

• FY25 non-revenue-related costs expected below FY24's $308.4 million; CapEx forecast at ~$10 million.

• LISTNR expected to be cash flow positive in FY25; leverage targeted below 1.5x by June 30, 2025.

• TV asset divestment actively progressing; dividends to remain at lower end of policy range.

• Dividends expected to resume in FY25 within policy.