We may be spending less time in the car, commuting to work, but there’s still plenty of money being made by commercial radio operators with leading media company HT&E (ASX: HT1) maintaining the top position across metropolitan FM radio which has driven a 58% increase in revenue while facilitating a major expansion into regional markets.
For the half year ended 30 June 2022, HT&E reported $172 million in revenue which represented a 58% increase on the previous year. This flowed down to their bottom line where net profit after tax was $24.6 million, but this also included a $12 million asset sale to SEN.
Metropolitan FM radio continues to be the biggest driver of advertising revenue where HT&E stations reach more than 6 million people per week, with the network holding the #1 network position in Australia for twenty-one consecutive media surveys. Kyle Sandilands and Jackie O remain the centrepiece of the network’s talent that also include Jonesy & Amanda and The Christian O’Connell Show.
“The business has delivered a very solid financial and operational result in a highly competitive market,” said HT&E Chairman, Hamish McLennan.
“Our strength in the Australian audio market demonstrates the success of our strategy and the acquisition of our new regional business delivers scale to drive further growth.
“We are confident of continued growth in regional markets in the medium to long term. Cost-of-living pressures in metro markets and changed work patterns through COVID have seen increased population movement to regional areas. Additionally, we are making good progress on the $6-8 million revenue synergy target for 2022 and the integration of the two businesses is well advanced.”
While their FM radio profile will continue to drive commercial advertising, HT&E are making a concerted push into regional radio with their acquisition of 46 regional radio stations from Grant Broadcasters (ARN Regional) in January 2022.
“ARN Regional is a high-quality asset for us and is proving to be a gamechanger for the company as it provides access to increasingly important and growing regional audiences, which enhances our ability to deliver content across multiple platforms and access more than a third of Australian consumers,” said McLennan.
Regional operations will be the focus for growth in the immediate future where HT&E intends to realise up to $8 million in revenue synergies through the existing operation which to date have achieved $2.7 million. Included in this is a restructure of their national agency sales team, incorporating regional, metro and digital specialists.
HT&E’s digital division also continues to grow with its billings increasing 41% to $10.4 million through their iHeartPodcast Network, the #1 podcast network in Australia. Further pushing this part of the business, HT&E will invest $7-8 million of operating expenditure to expand the business further in FY22.
With this strong Half Year result, HT&E will issue shareholders with a fully franked interim dividend of $0.05 per share, while the Company has also reinstated its share buyback program to support what they deem an “undervalued share price”.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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