Southern Cross Media Achieves Solid Growth In Digital Audio Market

October 25, 2018 06:00 PM AEDT | By Team Kalkine Media
 Southern Cross Media Achieves Solid Growth In Digital Audio Market

Audio market has been the highlight in Southern Cross forward plan. It said audio is entering a “golden age”, considering it as the primary force for driving ad revenue. Smart speaker adoption has more than doubled in 2018 in the United States and is said to witness a similar growth trajectory in Australia.

During FY18 Southern Cross Media Group Limited (ASX:SXL) has achieved tremendous digital audio engagement with +74% catch up radio podcasts and +55% improvement in app listeners on the back of 24% growth in digital radios over the past 12 months. Â

On balance sheet front, Southern cross media has de-levered its balance sheet over the last 4 years. Net debts have reduced 48% or $284 million in four years, i.e. from June 2014 to June 2018. This debt reduction has well positioned the company to improve its balance sheet and create flexibility for corporate strategies.

The company targets to manage capital in such a way that it generates maximum return to shareholders. For this purpose, leverage ratio range of 1.5x to 2.0x has been considered appropriate by the company while seeking to maintain the low investment grade metrics.

Weighted average cost of capital is targeted to be kept at minimum level by ensuring the right mix of debt and equity. The management of Southern Cross Media focuses on increasing both ROIC and EPS that could provide balanced indication of capital allocation.

Under the long-term growth strategy, company plans to invest in audio assets as digital radio progress provides audience growth at low cost. Since podcast business has low capital requirement, and content reach gets hiked through digital platforms, SXL shows particular interest in audio market. It intends to invest in measurement and attribution systems to support continued market investment in audio sector while exploring opportunities in adjacent sectors.

Towards sales strategy for FY19, insight-led advertising solution and brand building of radio are determined to become the major contributors supported by the company’s distinctive position in TV and Radio across the regional market. Looking into capital expenditure front, company aims to increase spend on IT platform and lower down its recurring property expenditure from FY20.

Southern Cross stock plunged 5% ahead of investor day presentation release. It last traded at $1.140 with PE of 631.580 x and market capitalization of $922.82 million as on 25 October 2018. Further, the stock has witnessed a performance change of  +5.26% over the past one year.


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

AU_advertise

Advertise your brand on Kalkine Media

Sponsored Articles


Investing Ideas

Previous Next
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.