Investment Matters

Southern Cross Investor Day

We attended the Investor Day for Southern Cross Media yesterday.  Given the other developments this week, here are a few of our key takeaways:

*  management has reshaped the company over the last three years, including meaningfully reducing debt, developing a clear strategy and focus in the evolving entertainment / media landscape, and focusing and developing its key strength of localism

* it has excellent reach - 95% of Australia's population listen and / or watch its regional radio and TV and metro radio services

* a clear opportunity exists to increase radio advertising revenue in regional areas

* there seems to be the start of a trend away from digital advertising (Facebook, banner ads and the like), to more traditional media such as radio

* radio is heading for a 'golden age', with the growth of digital radio (DAB+) and extending the reach out of the car onto devices such as mobile phones and in-home smart speakers

* the company is developing a strong podcasting capability (PodcastOne) - with its own content (not just re-play), strong positive trend re downloads, advertisers starting to recognise the opportunity, and it expected to become a meaningful earnings contributor in itself in the medium term.

- Fleur Graves