Southern Cross Media Achieves Solid Growth In Digital Audio Market

  • Oct 25, 2018 AEDT
  • Team Kalkine
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.  

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.


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. 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.


All pictures are copyright to their respective owner(s) does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.


There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

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. OK