ARN Media Limited (A1N) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the ARN Media Annual General Meeting. On behalf of the Board, I begin by acknowledging the traditional custodians of the land on which we meet today across Australia. I am on Cammeraygal land and pay my respect to their elders past, present and emerging. My name is Hamish McLennan, and with me in the room are my fellow directors, Belinda Rowe; Paul Connolly; Alison Cameron and Brent Cubis. Also joining me is CEO and Managing Director, Ciaran Davis; CFO, Alexis Poole; Company Secretary, Jeremy Child; and our auditor from PwC, Eliza Penny. We also have present our incoming auditor from EY, Graham Leonard. I'm informed there's a quorum present and accordingly declare the meeting open. The agenda for today's meeting is as follows. Firstly, I'll present my address, then our CEO and Managing Director, Ciaran Davis, will present; and finally, we'll proceed with the formal business of the meeting. As Chair of ARN Media, it is my privilege to address shareholders at the conclusion of what has been a pivotal year. ARN has navigated a series of macroeconomic challenges and evolving industry dynamics with resilience, adaptability and strength. Despite the challenges in the advertising market, we delivered a sound financial performance in our core business, while also accelerating prudent steps to ensure the business is well positioned to capitalize on an evolving Australian audio landscape, both now and in the years ahead. As of the 31st of December 2024, the group maintained a stable financial foundation with net assets of $291.4 million. Our balance sheet remains robust with net debt of $82.2 million and approved AASB 16 leverage ratio of 1.69x before EBITDA before significant items. The group retains sufficient financial flexibility with undrawn 3-year debt facilities of $64.2 million, the majority of which extend to January 2027. And in 2024, a total dividend for the year of $0.023 per share was declared, which represents a payout ratio of 60% of the full year net profit after tax and before significant items. Our ambition is to build the most profitable audio entertainment business in Australia. In a fragmented media landscape, we are uniquely positioned with trusted radio brands, the leading digital platform and a focus on long-term growth. We begin with our strongest asset radio. It remains a resilient and highly effective medium, delivering scale, consistency and strong returns. Our heritage Metro brands of KIIS and GOLD are growing. Regional -- sorry, our growing regional footprint and deep audience engagement give us a powerful platform to build from. But we're not standing still. Our strategy is built on growth and transformation. We're investing in the best content and best talent because we know great talent drives great audiences. And when we grow audiences, we grow commercial opportunities. We're distributing content more widely than ever before, wherever, whenever and however audience choose to listen. At the same time, we're embracing new formats and new technology to future proof the business, across broadcast, streaming and podcasting, we're expanding our total audio proposition, connecting advertisers to more Australians more often and across more platforms. 83% of Australians are accessing digital audio monthly, and nearly half of the population is listening to podcasts every month. This is driven by demand for personalized on-demand content. Recent elections in Australia and the U.S. reaffirm the persuasive power of audio, particularly podcasting in shaping opinions and influencing behavior, illustrating its unique position in the media mix. iHeartRadio continues to outperform giving us a low-capital, high-impact gateway to global tech and innovation. Transformation is core to our strategy. We are reshaping operations, simplifying the way we work and reinvesting in areas that generate long-term value, content creation, audience growth and monetization. In short, we're focused on execution, a stronger cost base, a sharper commercial model and a digital-first mindset will ensure that we are not only competitive but lead. To assist in realization of this ambition and to capitalize on the growing demand of personalized and immersive radio, we must continue to adapt to maintain our competitive edge. We are looking to optimize our ways of working. Our current operating model carries too much complexity, limiting our ability to invest in parts of the business that truly drive growth, simplifying our business and reallocating resources and shifting from internal administration to innovation is the goal of the company. We've commenced a 3-year business transformation program that is expected to deliver cash out of $40 million, approximately 20% of the cash cost base aimed at improving efficiency fostering innovation and ensuring long-term returns to shareholders. As part of this, we are changing the composition of our team to become leaner and more efficient. Recently, this culminated in the difficult decision to significantly reduce headcount. This is not a decision that we take lightly, and I want to acknowledge the significant contribution of those impacted. We are committed to providing those impacted with support and practical assistance during this transition period. This whole of business transformation is about unlocking our potential and creating an environment where data, agility and creativity are key. It's about becoming a business that invests according to the following principles. In content, original formats and the talent to deliver compelling audio experiences that resonate with today's connected audiences. That is increasing our reach and creating new touch points to engage listeners wherever they are, benefit consumers and more effective for brands, developing big ideas for brands and unlocking powerful capabilities addressable advertising, rich audience insights, programmatic buying and dynamic creative optimization. This will allow us to better serve our clients and measure along with high-impact campaigns. During the year, Cody Outdoor delivered notable achievements securing 2 major advertising concessions and contracts in Hong Kong, marking a strong return to this key market, with over 25 years' experience managing profitable out-of-home contracts, these new agreements strengthens Cody's position in the Hong Kong out-of-home market. Cody has a balanced portfolio of quality out-of-home assets, long-standing partnerships with leading advertising agency groups and blue-chip clients and a reputation for delivering high-quality and innovative outdoor advertising solutions across Hong Kong. With the investment in start-up phase now complete and with a strong and established management team, Cody is well placed for future growth and the Board has commenced a full strategic review to assess the optionality of those assets. We will update shareholders on any progress at the appropriate time. The dominance of global digital platforms such as Google and Meta has fundamentally reshaped the advertising market, capturing a disproportionate share of digital ad dollars and placing sustained pressure on traditional media companies. In this environment, scale, operational efficiency are critical for survival and growth. Australia's media landscape remains fragmented and governed by outdated ownership laws conceived in a pre-digital era. These regulations, many of which were established decades before the emergence of social media, podcasting and on-demand streaming no longer reflect how Australians consumed content or how advertisers allocate their budgets. As a result, local media businesses are increasingly constrained by their ability to consolidate, innovate and compete on equal footing with these global tech giants. We believe structural reform and industry consolidation and necessary to build a stronger, more sustainable domestic media sector, which Australia relies on every day. A less fragmented market would unlock synergies, drive innovation, reduce duplication and enhance the financial resilience of Australian media companies. ARN Media supports the modernization of media ownership regulations and intends to work with government and industry to ensure that regulatory environment evolves to reflect current market dynamics. In parallel, ARN will continue to evaluate strategic opportunities to expand its footprint, leverage cost efficiencies and build a diversified multi-platform audio business that delivers long-term value for shareholders. Finally, I wish to express my sincere appreciation to our Board of Directors for their guidance and oversight and to our CEO and executive leadership team for their strategic vision. I also extend my thanks to every member of the ARN Media family for their dedication, which continues to drive our success. To our shareholders, thank you for your trust and ongoing support. Your confidence inspires us to boundaries and pursue innovation. We look forward to another year ahead, and I'm optimistic about the opportunities before us and confident in our ability to continue delivering value, innovation and impact. I'll now hand over to Ciaran.

Thank you, Hamish. Good morning, everyone. Firstly, looking at our statutory results. Group revenues from ordinary activities grew 9% to $366 million, an increase of $31.4 million. The driver of growth was Cody, with 2 new advertising contracts secured. A stable ARN result with revenues of $308 million in a challenging media market with digital revenues growing 28% as we continue to expand our digital offering. In a high inflationary year, tight cost control restricted group costs before significant items to $280 million, an increase of 3.5% compared to prior period. The increase in cost base is due to Cody direct costs. Strong cost control was maintained at ARN in Australia with revenue-related cost increasing, driven by increased podcast costs from the growth of podcast revenue. People and operating costs were flat year-on-year ahead of guidance. EBITA of $93 million increased by $21.5 million as compared to the previous period. Group depreciation and amortization expense before significant items of $49 million increased by $29 million in the year due to the impact of the new contracts in Cody. This resulted in EBIT before significant items of $44.5 million compared to $52 million in the prior year period. NPAT of $3.9 million was impacted by significant items, including our share of transaction costs associated with the proposed acquisition of SCA as well as restructuring costs associated with simplifying and standardizing our radio operations. Operationally, I'd like to take a moment to address Kyle & Jackie O, undoubtedly one of the most influential and successful shows in Australian audio history. In Sydney, the dominance is unparalleled. They've now delivered #1 results for 50 consecutive surveys in a row, an extraordinary achievement by any measure. With 1.7 million listeners and a growing digital performance across podcasting, streaming and social platforms, the show delivers far more than just broadcast ratings. It commands a total audio footprint, drawing double the weekly audience of Australia's top free-to-air TV shows and engaging audiences wherever they choose to listen. And it activates large-scale brand partnerships that delivers results for clients, such as the very successful 5 million Dawn Dig in Melbourne, sponsored by Greenworks. Having personally spoken to the proprietors of Greenworks, the brand exposure, the return on investment and the positive business results of this promotion way overdelivered on their expectations. The Melbourne launch in 2024 was the subject of much debate and rightly is a topic of investor interest. We've always said this is a long-term project and that there will be a natural bedding in process. While early survey results in 2025 show growth with Breakfast & Station share both growing, we're realistic. Shifting market behavior in a highly competitive landscape takes time for any radio show. Remember, Christian O'Connell took 2 years to become #1 on GOLD. We also recognize that Kyle & Jackie O's content won't be for everyone. They are entertaining and provocative by design, and that can spark debate. We've seen this recently from social activist groups who campaign actively against the show. We respect the right to protest and the diversity of use in public discourse. That is part of a functioning democracy. But we also stand firmly for freedom of speech. We stand firmly for censorship, against censorship, bullying and for the role broadcast media plays in reflecting a wide range of voices and entertainment formats. The show always takes on feedback to refine programming, and I'm confident the refocus Kyle & Jackie O have made in recent months maintain the DNA of the show while having wider appeal to first-time audiences. This is a strategic multiyear commitment to build an audience and commercial base in Melbourne. We are tracking the metrics that matter, growth, audience, revenue and remain focused on delivering long-term shareholder value. This was never meant to be an overnight success, but they are great talent, and we believe in the strategic long-term investment. Regionally, we delivered a strong performance in 2024. 1/3 of Australians live in regional areas and ARN stations reached 2 million of them via our network of 49 stations across 29 markets. Regional audiences are being viewed as increasingly valuable amongst advertisers with share of non-digital budgets having increased for the third consecutive year to 18%. Amid the closure of regional print and TV outlets, this trend highlights the significance of our footprint for both audiences and advertisers. It is our commitment to deliver live and local content that connects deeply with the regional communities we serve and is yielding the results we are seeing. Regional advertising revenues were $105 million. This was up slightly on the prior period despite continued challenging market conditions, and we continue to deliver the revenue synergies against the original investment case. The Regional segment now accounts for 34% of ARN's total revenue and serves as a strong value creation lever with most individual sites operating at a high margin. In 2024, ARN stations solidified their dominance in regional markets, delivering strong listening-ship results across 12 markets with 10 stations achieving #1 position and 5 stations securing #2. There is no doubt the importance of regional markets will continue to grow, and ARN is well placed to play a significant role in the cultural and economic role of these markets. Digital audio revenue grew at 28% to $25 million and was driven by exceptionally strong growth in podcasting. At the half year, we guided to digital audio EBITDA and cash flow positive result for 2024. And pleasingly, that was delivered, with profitability continuing into this year. A number of factors give us confidence here. Firstly, the diversification of formats into areas like podcasting is attracting new category of advertisers. ARN is the #1 podcast publisher in the country with 7 million monthly users. Downloads of the iHeartRadio app are up 10% to 3 million registered users. We are growing our addressable audience and our ad tech capability enables us to deliver tailored solutions to clients effectively, transparently and with precision. Our iHeartMedia partnership allows us to benefit from a development pipeline that is in keeping with other global ad tech players without the need for ongoing CapEx demands. And our sales team are becoming proficient -- increasingly proficient and sophisticated in selling broadcast radio and digital audio, including live streaming. Despite the ad market challenges, we firmly believe the audio sector continues to present a compelling long-term growth opportunity for ARN investors. It is one of the few growing platforms in media in Australia. 94% listen to audio weekly, and they spend on average 11 hours a week engaging with it. Broadcast radio continues to demonstrate remarkable resilience reaching over 80% of the population, underscoring its role as a powerful high-reach platform that commands attention. At the same time, we are seeing strong and sustained momentum in digital formats. Since 2021, online radio streaming has grown by 39%, and podcasts are now reaching 43% of Australians each month. This isn't just incremental growth, its expansion into new listening behaviors and untapped audience segments. The chart on the right of Slide 10 illustrates this well. Digital listening formats such as online radio, DAB+, podcasts and ad-supported streaming music have grown every year, consistently building on rather than replacing traditional listening. This additive effect is what makes audio so unique. We're not cannibalizing traditional formats. We're growing the total addressable market. And the ARN Audiosphere illustrates exactly what that means: A connected ecosystem that puts brands in the ears of Australians no matter where, what or how they listen. At the center is the listener, surrounded by a powerful combination of platforms and touch points. Broadcast radio still commands scale, where we reached 7.5 million Australians each week. DAB+ extends that reach further with 1 million digital radio listeners. Streaming adds another 1.6 million monthly listeners who engage on their terms on mobile and connected devices. Podcast delivers deep engagement with 6.9 million Australians listening monthly to iHeart, the #1 podcast network in the country. Our social footprint spans 1.3 billion impressions and 1.2 million monthly visitors to our digital properties. And we activate it all through dynamic audio, data-led targeting, branded content and real-world events. Our total audio commercial proposition means building integrated campaigns that reach more people across more moments with greater impact and ARN's competitive advantage and scale and ARN's competitive advantages, the scale of radio the intimacy of podcast, the precision of data, all in one unified audio strategy. For advertisers, total audio isn't just more inventory, it's more connection. One campaign, one creative idea extended seamlessly across FM, DAB+, apps, podcast and digital streams, delivering unmatched reach, precision and frequency. For audiences, it means more freedom to listen on their terms, whether it's waking up to the radio, streaming in the car or driving in a podcast -- listening to a podcast on the run. While ARN's total audience is increasing digital, there is a monetization gap. Today, 42% of ARN's total audience is engaging with our content on digital platforms across live streaming and podcast and digital radio. However, only 10% of our revenue is currently derived from digital channels. Digital inventory commands higher CPM due to its addressability, measurement and targeting capabilities. As we scale these platforms, we are commercializing them at a premium. One of the key enablers is ARN's first-party data asset set. By capturing and activating audience data through iHeart and other digital touch points, we can offer advertisers target precision that isn't possible with traditional channels. And as we continue to invest in digital product innovation and commercial capability, we are confident that this will be a meaningful contributor to ARN's future revenue growth and margin expansion. As the Chairman mentioned earlier, we commenced a 3-year business transformation program. A comprehensive review of the whole business has taken place and all expenditures and process is examined to ensure we leave no stone unturned. Even our proposed change of auditors today is a reflection of the scrutinization being undertaken. This transformation underscores our commitment to drive shareholder value and we'll focus on 3 areas: digitizing and simplifying our operating model, investing to grow audiences and engagement and delivering total audio commercial solutions. To help execute this transformation, we are partnering with a global specialist to take over delivery of several core operational functions in finance, technology and media services, allowing us to introduce smarter tools, reduce complexity and scale efficiently. We have delivered $6 million in FY '24, $22 million in FY '25, with the balance in FY '26. With around 25% of the workforce impacted by these changes, we acknowledge the human cost of this transformation under ensuring a responsible and respectful process for all involved. FY '25 cost will be skewed to the first half due to upfront restructuring and transition expenses with savings realized in H2. From 2026 onwards, we expect further cost optimization and improved earnings leverage as savings flow through to the P&L. The chart on the right illustrates the declining CapEx trend line over the transformation period this year. We are confident this program will reshape our cost base, position us for sustainable growth and strengthen our ability to generate more commercial outcomes in the years ahead. And finally, to our trading update. Total April year-to-date revenue finished 2% behind the prior comparative period, with digital audio revenues continuing to experience strong growth. Year-to-date ratings improvements in FY '25 and the ongoing transition to a new commercial team is expected to deliver radio revenue share improvement in H2. In respect of gross margins, we've seen a modest improvement for the period to date, driven by product mix and pricing. Significant progress in relation to our cost out program has been made as we target $40 million cash cost out over 3 years. We continue to target flat people and operating costs in 2025 with a number of organizational changes made in April and May. Overall cost to be skewed to H1 due to the front ending of certain operating costs and savings realized in H2. At Cody. Cody working capital performance in Hong Kong to end April was in line with expectations, requiring no cash funding. Tariff introductions have impacted revenue in Q2, resulting in a focused sales strategy on more local buyers. And as the Chairman said, a strategic review has commenced. Thank you for your time.

Thank you, Ciaran. We'll now move to the formal part of the meeting. Members and proxies have the ability to ask questions and submit votes either in person or online. For those attending in person to ask a question, please raise your hand during the question time and somebody will come to you and provide you with a microphone so the question can be heard by all. For those attending in person, you would have been given an attendance card. If you have a yellow card, you're entitled to vote and ask questions. If you have a blue card, you are not entitled to vote, but you are entitled to ask questions. If you have a red card, you're a nonvoting shareholder, you're entitled to ask questions and make comments but you're not entitled to vote at the meeting. For those viewing online, the procedures for voting and asking questions are set out in the online guide attached to the notice of meeting, but I will summarize again just now. To register to vote, click on Get a Voting Card, enter your shareholder or proxy number, then click Submit Details and Vote. If you wish to change your vote while voting is still open, click the Edit Card button. At the end of the AGM, a bar will appear counting down the remaining voting time. Please make any changes to your votes and submit before voting closes. To ask a question online, you must first register to vote as just described. Then click Ask a Question. And if you have the option of submitting an online question or you ask a verbal question by clicking on the web phone option. If your question has been answered and you would like to exercise your right of reply, you can do so by submitting another question. Questions can be submitted up to 5 minutes as the poll closes. My duty as chair is to ensure everyone has a fair chance to ask a question. We ask that shareholders limit themselves to 2 questions per item and that the questions be asked at the same time. Please keep your questions relevant to the items of the business at hand, we will hold the meeting with a degree of discipline to make sure that this happens. And finally, after the AGM is finished, a recording will be uploaded on to ARM's Investor Relations page, and the voting poll will be published on the ASX later today. We now move on to the matters set out in the notice of meeting. First, Item 1, the financial statements. A table before the meeting -- the financial -- table before the meeting the financial report, director's report and independent auditors' report for the year ended 31 December 2024 for consideration and invite any questions or comments that you may have on those reports on the company management. The company's auditor Eliza Penny at PwC, is in attendance and can answer any questions you may have about the conduct of the audit, the preparation and the content of the independent auditor's report. The accounting policies adopted by the company and the independence of the auditor. Are there any questions or comments either in the room or online?

We have one question.

Thanks, Chairman, and thank you very much for a very interesting address you gave and to Ciaran for a very interesting and informative presentation. I have 2 questions. You asked that they'd be both asked at the same time. The first one is on Page 39 of the annual report in Paragraph 7 is a reference to likely developments and then there's a caveat that the director is not going to disclose anything because it may prejudice the company. I just wanted to ask whether shareholders should be concerned about the use of the word prejudice there? That's the first question. The second question, Ciaran addressed it in his presentation, he said that there have been a full examination of costs, and he referred to the costs of the SCA. Could you tell us what it cost for the company to engage in that foray and whether it was money well spent?

Thank you. So I'll partly pass to Brent, who is the Audit and Risk Chair, but I think as an organization over the years, we've been responsible, prudent and we've been transparent really, we're looking to just ensure that shareholders understand exactly where we're coming from. So there's, in my opinion, nothing to be worried about with your first question at all. It's just we're being overly transparent from a governance perspective. But I might just pass to Brent, who can address that issue as well, and then we'll go to Ciaran afterwards.

Sure. Thanks, Hamish. In terms of -- I mean, it's normal commercial practice that you don't disclose too much information around what you might be doing, it's a very small industry, the media industry. And if you disclose too much, it's pretty easy to put 1 and 1 together about what's going to impact the -- your company against the competition, if you like. So we were -- I think the main thing we've focused on here is the cost savings and things like that. And I think that's the most important thing for investors to get their head around. And I don't think that we need to disclose any more than that because it would prejudice as it says against our competition. It's a very competitive market out there. You don't want to disclose too much. In terms of the Southern Cross, are you going to talk to that, Ciaran?

Thank you, yes. The overall cost of the transaction was about $5 million. And in relation to the bid itself, like as you may have heard this morning, we firmly believe in the future of audio and radio in this country. We also believe that in a world of global tech the ability to compete as aggressively as we'd like to limit and is limiting and is reducing. And the ability, we believe, in the consortium that was put together was going to create a powerful national audio business, one that was capable of delivering really good content to the whole of Australia with our live and local performance, one that was capable of delivering for advertisers in Australia and Australian advertisers, which is really important. But also one that could look to the future with confidence around competing with global tech like Apple Music, Spotify that we're increasingly facing. The digital market today takes about 50% to 55% of total advertising in Australia. That's leading this country. And what we believe we were building was a long-term profitable valuable business for shareholders that was going to serve Australians well and was going to serve Australian advertisers well. It's a pity it fell apart. We still firmly believe in the industrial logic.

Any questions?

[ David Kingston, K Capital ]. I'd like to make a few comments for context. And I then have some questions, please, I'll limit them to 2. We look at the glory days, ARN Media was once a large ASX company known as Australian Provincial Newspapers, controlled by the charismatic Irishman Tony O'Reilly. O'Reilly Contemplated privatizing APN at over $3 billion. Its adjusted share price peaked above $30 in 2007. And with the GFC belted the share price and O'Reilly sold out. Since then, APN, when it changed its name to Here, There and Everywhere, thankfully, that name has been sin binned and now ARN media has had multiple restructurings and asset deals, but the stock has continued its decline. Let's focus on recent years. Concerningly, the ARN share price has continued to decline. Start of 2022 was around $2. Start of 2024 was around $1. Start of 2025, it was around $0.70. It's now $0.55. If we look at Page 4 of the 2024 Annual Report, it states evocatively in bold purple letters, long-term value for shareholders, which is an excellent ambition. Sadly, the opposite has occurred. For 18 years, there has been an inexorable decline in shareholder value. ARN's balance sheet shows accumulated losses of $1.2 billion. ARN's market cap is now a low $165 million, which is indeed 35% below its parent company net asset value. Adding net debt of $82 million the enterprise value is around $250 million. The CEO's addressed states underlying EBITDA, underlying at $93 million. So the market is rating ARN at a feeble enterprise value to EBITDA multiple of 2.7x. What we need is some of the Chair's share price magic at realestate.com. It's been a fantastic stock. Can you repeat it, Hamish?

So your historical -- sorry, is the question finished?

No, no, no. Okay. I've got a couple of questions, but this is just contextual background, Hamish. If we look at the checkered -- and it's all relevant to the questions. If we look at ARN's checkered recent deal history, some complements, some brickbats. Fantastic 2018, terrific sale of Adshel to oOh!media at $570 million, well done. But the proceeds have been dissipated. Debt repayment, dividends, buybacks, some tax, some business investment without sufficient return and some poor deals. The cash is gone, and now ARN has gross debt of $100 million, gross debt, net debt $82 million. In 2021, the purchase of Grant Radio for over $300 million, mainly for cash was a poor deal. Grant had just $100 million of revenue. The grant deal price is more than the enterprise value for the whole of ARN today. Give credit where it's due, congratulations to Alison Cameron, brilliant deal, as CEO of Grant, you sure won that negotiation. 2022, $250 million write-down of goodwill and radio licenses. Intangibles still at $331 million. Maybe there will be more write-downs to follow. 2023 exit from 25% interest in Soprano for $66 million, solid outcome, albeit higher price deal fell over. 2024 purchase of 15% of Southern Cross at over $1 a share was expensive, and the complex bid with Anchorage for Southern Cross was aborted. Let's look at the share register. You've got a challenging role, Mr. Chairman, herding cats arguably. Nearly 75% of the register is held by a very eclectic group. Samuel Terry, Seven, News, Grant Broadcasters, Spheria and Moelis. The investments are rounding errors for Seven and news groups. Grant has already won the lottery but Sam, Spheria and Moelis are focused only on shareholder value. I accept the traditional media continues to be under major pressure. But ARN still has a fantastic opportunity to go forward well. It has substantial revenue of $390 million. Its Australian operating cash flow, free cash flow was $27 million according to the February '25 results presentation. Sadly, Cody lost free cash flow, around about $20 million loss of free cash flow from Cody. So the combined free cash flow was just $6 million. But it's pleasing to hear today that there is potential to improve with further cost reduction. I'm nearly at my questions, Chair, but I just wanted to make a couple of comments on Southern Cross rationale and Cody rationale, and then I will ask a couple of questions. Clearly, there is synergy in combining ARN and Southern Cross, albeit there is currently the 2 station per market area. Also, a takeover of Southern Cross today would be challenging as it has a significantly larger enterprise value than ARN, after adjusting for debt the Southern Cross stake that ARN holds and importantly, adjusting for the GTN liability that Southern Cross bears. In relation to Cody rationale, I love visiting Hong Kong, but it's a smallish business and an 8-hour flight away. There is no synergy, and it seems illogical to keep pouring money into it. I note that 2024 was impacted by 2 new contracts, but Cody delivered an EBIT loss of $4.8 million of $47 million in revenue, and it contributed a net cash flow loss of $20 million. Now my questions, Chair, just 2, and there's a couple of aspects of them. Given the checkered history of ARN deal making, our shareholders better off, if you just run the radio audio business to maximize profits and return dollars with large franked dividends to shareholders, noting that you have $95 million of available franking credits? The second question, Chair, except there is pressure on traditional media but why is the ARN future going to be any different from the very large shareholder value loss over the last 18 years. Why is the stock market rating ARN at such a low 2.7x multiple of what the CEO describes as underlying EBITDA and such a large 35% discount to parent company NAV. And in calculating that, I have eliminated the minority interest. Are the intangible assets overvalued? Thank you, Chair.

So firstly, thank you for your intelligent, thorough and well-thought through contextual overview and questions, and they are all fair and legitimate. In my long years in the media industry and you referenced realestate.com. I've seen it all. And so there are some companies and some industries that are just challenged by technology and market forces. And so you referenced the O'Reillys and I'm very familiar with their history and you look at INM, that company is a shadow of it for myself. And so there are some structural changes that are happening in the market that it's very difficult to deal with, which is why certainly, when we talk about regulatory change, the government has to get their head around how they help Australian businesses that pay tax in this country. I challenge you on a couple of your points. I think Soprano was a very good deal for us. I think if you look at the history of this company over the last 7 years, certainly since I've been on the board. We have sold over $700 million. We've divested ourselves of more than a dozen companies and that equates to over $700 million. And that was primarily focused around getting debt down and focusing in on a sector and an industry that we believe in. So I don't think we can escape the fact that social platforms are having a diabolical impact on a lot of Australian media companies. Having said that, when you look at ARN, I would argue that our restructuring was probably a little bit overdue to be totally frank with you, but that was mainly because we were looking to consolidate with Southern Cross and to see whether we could deliver even more efficiencies. Having said that, as a total percentage of ad spend, we're sitting at about 8%. And we've always been at that level. So a major focus will be, as you suggest on focusing on driving EPS growth, our dividend staying focused on the core of this business. And if you just look at what we've done over the last 7 years, we're getting rid of everything. So we really want to be an audio business and be the best in the market in that regard. The point about Southern Cross was to say in light of, I think, really poor regulation from the government. But this -- I've been on this hobby horse for more than 15 years, it is killing Australian media companies. And so when you look at audio and you look at what we have to offer, we originate and own our own content, when you look at regional areas, and I'll address the ground acquisition in a second, we're really the last live and local. So if you look at newspapers, they've been completely disintermediated, they're under incredible pressure. And it's becoming increasingly difficult for those companies to deliver local content. A lot of television now has been syndicated. So they don't have any local presence. But we think it's a competitive advantage we have a lot to offer in that regard. And so culturally, we think it's really important that we stay active and committed to those markets, but also at markets, but also commercially, we believe that with our advertiser base over the long term, we'll be able to drive more profit in that regard. So our singular focus is on getting cost out of the business, and that would just be an ongoing program forever for as long as we're all here together and making our content as good as it can be. And Ciaran referenced Kyle & Jackie O, the likes of Christian O'Connell in Melbourne. That was a massive pump for our company to pull broadcaster out of the U.K. And within 2 years, he was #1 in Melbourne. And if you look at Amanda & Jonesy in Sydney, I back ourselves over the long term to do that better than any other media company and to drive profit off the back of it. So you've got to invest in content while taking cost out. So that very simply is the plan for us. If I turn to the Grant family acquisition, Alison and her family did a good deal. Let's not forget that, that was at a time in place when markets were up. And that company, which we were very familiar with, has been in the family for 70 years. And that's an example of why you need to get scale. We're a better company for having Grant as a part of this company. We would have been picked off or destroyed or lost share had we not done that deal. So with the benefit of hindsight, and you run a very successful company, but we've all had good and bad deals. I think, yes, in hindsight, it looks like a high price, but it was a deal that I'm glad that we did because further extended our reach into Australia and the same logic prevails for why we like Southern Cross. And we just think bulking up and having one company that can syndicate content, get efficiencies and drive cost out of the business is really important. I will also say that we were very disappointed in the engagement we got from Southern Cross and it kills us that we had to pay that money. To that gentleman's previous question, $5 million is a lot of money. We wear that, we own it, and it's really painful for us. But what you've got here with us is highly focused company that is got to focus on driving EPS growth and delivering the dividend. We will still look for opportunities sensibly if there's an opportunity to consolidate. And I guess, finally, if you look at businesses over the last 50 or 100 years, structural change happens everywhere across a lot of different industries. And quite often, there's not a lot that you can do about it. So we are facing headwinds from the likes of Spotify but we've got a plan to deal with it. So in terms of relative value and what's happened to market caps, you're deadly accurate with everything that you say. But you've got to adapt and deal with those structural changes as you see fit. We're never going to return to $30 in the near future. But what we've got to do is ensure that we run a really profitable focused business and we're absolutely determined to do that. But your point highlights the fact that we need regulatory change. Your points highlight the fact that we've got an intensely competitive environment. But the good news with ARN and with radio, advertising dollars are static at about 7% to 8%. We think that's a great opportunity if we continue to cut costs out. I mean, don't think that we're not prepared to make tough decisions. We've let over 200 people go in the last 6 months. That is massive for our business of our size. We need relief on the regulatory environment side, and we are investing in new technologies, any company that doesn't innovate, that stand still will get killed. So hopefully, you'll give us a bit of a pass on the fact that we have divested ourselves of over $700 million worth of noncore assets that we don't think are relevant. We think our plan is good, there are structural changes, a highly competitive environment and some things that happened along the way that perhaps are not for this meeting. But in terms of activist bodies that have sort of suppressed our numbers a little bit, but we believe in the business. Finally, what I would also say is that even though you talk about an eclectic group of shareholders, Seven, News Corp, the Grant family, Samuel Terry, Spheria and others that I'll leave off today, they might be eclectic, but they're all smart and they all believe in radio. So I think when you group those people together, those companies together, they have faith in this business. We know that we've got to deliver for them, but they believe that we're undervalued. And what I would just say as a final comment, and you know this better than anyone, the liquidity of the stock is ridiculously low. So we might have 20,000 shares sold in a day or none at all, and it affects the market cap. I personally don't think it's a true reflection of the company's value. We've got 7 shareholders that have -- 8 shareholders that have more than 70% of the company. So there's not a lot of liquidity out there. So if you've got any bright ideas in terms of how to sort of fix that, I'm all ears, but thank you for your very insightful overview and your questions, and I hope those answers satisfy your questions. Are there any other questions?

[ Charlie Kingston ]. Just 2 questions as well, please. But the first one, just on the trading update. If you could just provide some more detail there. I'm not sure if it's an apples-for-apples comparison, but SXL yesterday reported 9% revenue growth on PCP, whereas today, we've reported minus 2%. So I don't know if it's -- they're cycling different numbers, but they've also reduced their cost base or which they've guided to, we're guiding to flat. And again, I don't know if Cody's within those comparisons, but just appreciate your commentary on if we're losing share, why the discrepancy between us and our key competitor. That's the first question, please. And then the second question, just I suppose following on from some of those issues around consolidation. Clearly, you're still in favor of consolidating with Southern Cross or others, but just bearing in mind that track record that was raised, I think when we bought Grants, it was 8x EBITDA. Today, we're trading sub 3 times and when we bought the SXL stake, it was $1.08, I think, which is a 40% odd premium to their share price at the time. And again, yes, things have changed. I think we were trading a lot higher. But how should we think about consolidation going forward? We, as a company, do have a reasonable amount of net debt. I know that most recent proposal was heavily script based, but I think our share price was higher than theirs at the time. And we've got a similar market cap today. So again, that seems like an awkward proposition if you were to pursue something script based. But yes, how should we think about potential consolidation. How would you pay for that, noting that $1.08 price for SXL for the initial stake? And again, where we trade at today, clearly, a buyback seems pretty appealing or with our $95 million of franking credits, that's going to be stranded regardless? So I was just hoping to get some reassurance that we won't be overpaying and how do we fund any potential acquisition going forward given our balance sheet, I suppose Southern Cross balance sheet, they've got a lot of debt as well and GTN liabilities. So I would just appreciate your reinsurance that we won't be overpaying for a competitor, please.

The trading update and then...

Thank you for the question. On the trading update, every media business goes through ups and downs in terms of ratings. And last year was not a great year for us from a ratings perspective, having had 4 or 5 very successful years. Now immediately, people will jump to Kyle & Jackie O failing. Actually, that wasn't the driver of ratings decline. We've had ratings decline across our GOLD Network, which we highlighted at the February presentation of the full year results, that's been going off for about 18 months. So we entered this year with ratings below where we would want it to be, and we're starting to see those ratings improve. The knock-on effect of that is that when you're dealing with advertisers, you're comparing yourselves against the previous year. So the disparity between ourselves and our competitors in terms of the revenue that we've generated on the ups and downs is mostly driven by our ratings. And we're focused -- very focused on getting those back, which -- we have a long history of being very competitive, very successful in doing, and we're confident that we will get that coming back. We also have gone through a period of a new commercial team being established. We've been very successful driving commercial share over a number of years, but we also felt that the time was right to look at where audio is going, to look at, actually, as I spoke about in the presentation today around the Audiosphere and the integration of radio buying with more digital audio buying. And that required a new team to come through. It required new capability to come through. And in a transition like that, then yes, there is some loss of commercial focus. But again, as I said, in the trading update, we do see share coming back in the second half. So that's primarily the disparity in ratings. From a cost perspective, we were very aggressive, as you know, this year. I think we're being very aggressive compared to a lot of our competitors. And it's unfortunate on the people impacted. But what we are doing is fundamentally reshaping the business to make sure that we enter '26 cost base, P&L a lot healthier than we are today. And when you go through a period of transformation like that and uncertainty for staff, that also causes some issues with internally that you've got to deal with, which is very, very natural. But we're dealing with it very well. I'm happy to say that after a number of weeks of uncertainty, we're coming through that, and we entered the second half looking more positive.

Just adding to that, our primary focus is on ensuring our business is as robust as possible, cutting cost. We hope that if you look at over the last 5 to 7 years, we've done everything to eradicate any that we have. Our plan largely, which remains confidential through the consolidation play was to deliver scale and more profit growth, obviously. And we think that we were able to present to the market if it was to happen, a pretty compelling proposition that would drive even more share of the company. So it didn't happen. That's been well publicized. So the focus is on the core. But I just urge you -- and again, realestate.com is a great case in point in terms of the constant need to innovate. So here's a company 14 years ago that had a market cap of $1.3 billion. It's far higher now. And that's through innovation. So I'm not suggesting in any way that, one, will be able to replicate that success. But we have to be agile and open to opportunities, but the focus is on the core if something happens, we will not do anything silly, and it's got to make sense. Another question?

Hamish, approximately 2 years ago, you mentioned that you were interested in Seven West Media. And you made the comment the ball is in their court. I noticed that after that Seven West Media invested in our company, quite a substantial amount. My question is, are you still interested in Seven West Media? Or certain assets of this company who hasn't paid a dividend for 7 years, whose share price is absolutely tanked? And to me, it should be a good business, you should be able to make money out of that. So I don't know whether you could answer this or not, but are we still interested? Or have you had talks with them or because it hasn't been publicized if you have?

Yes, yes. I'm not sure that's the exact recollection of what I said at the time. But that's fine. Free-to-air, the free-to-air business is under an enormous amount of pressure. Seven West primarily overseen by the Stokes and led by Jeff Howard, we rate very highly. And Jeff is a terrific operator. He was the CFO here. So they have all up about 19% of the company, so if there are partnership opportunities to drive revenue, we will look at that. Again, there are, I'm sure, are opportunities for us to do more. And there are partners outside of Seven that we're looking at the moment to drive revenue. So that is the real key but that's as far as the discussions go at the moment. So Ciaran and Jeff have a great relationship. It's very productive, very professional, and we're glad to have them as a shareholder.

Any other questions? Okay. We'll keep moving. Item 2 is for the reelection of Alison Cameron. We ask shareholders to consider and if thought fit, pass the following as an ordinary resolution. That Alison Cameron, who retires as a director by rotation under the constitution and the ASX listing rules and being eligible for reelection, be reelected as a Director of the company. By way of background, Alison was appointed in January 2022 as a director. Alison is an experienced media executive and has a 34-year career. She has a deep understanding of media and regional communities. Alison's most recent role of CEO of Grant Broadcasters where she was responsible for the sale of 47 regional stations to ARN in 2021. The Board supports Alison's reelection. I now invite Alison to say a few words about her experience and the skills she brings to the Board.

Thank you, Hamish. As Hamish has said, I've had 34 years experience in media. That's pretty much the only job I've ever had. And I've worked in finance, sales and marketing, and then, of course, management. I've also held a director role with the National Film and Sound Archive, which is a government body. So I've got some experience in governance there as well, not only from when I was CEO of Grant Broadcasters. I have a very, very deep understanding of radio, regional radio and in particular, the stations that ARN have acquired. I regularly provide commentary whether it be history or advice or knowledge on those stations to management and to staff and to Ciaran and the Board, of course, when they ask. And I believe that, that has a positive contribution to the company. I believe my skills and knowledge is a complementary to the other directors. We have a small board. We all have various skills and I believe I complement their skills. And I just -- I also believe I make a positive contribution in all Board meetings.

I can see there's a question from Stephen Mayne. Do you want to read it out, please, Jeremy?

Yes. Certainly, Hamish. Yes, this question from Stephen Mayne. As one of the most powerful directors of ARN Media and a major shareholder in the company, could Alison Cameron, please comment on how she personally rationalizes defending some of the sexist and misogynous commentary by Kyle Sandilands using the platforms of the company, which he directs? What do you think of the most recent critiques on the ABC's Media Watch program? And what is she doing to ensure better standards are followed in the future? Does Alison ever feel embarrassed by some of the comments?

Okay. I personally believe that Kyle is not a misogynist or sexist. Some of the content is not necessarily to my taste. I unfortunately fit outside of the target demographic of 25-54, I'm a bit older than that. But there are clearly millions of listeners who do like what Kyle & Jackie O and the team put to air. We, as a Board, have discussed and now, I as a director, of course, I've added my comments to that, the standards that with which we wish to uphold I'm not quite sure that -- I haven't seen the ABCs Media Watch program, I don't watch that. In fact, I don't watch TV. But it is something of commentary to the Board, particularly as the ACMA do undertake some inquiries. So it is a focus of ours.

Any other questions? David.

Congratulations again, Alison, you're obviously very capable. Just a quick one. The related party transaction, $762,000 seems to be paid to -- for rent of properties that your family own, I assume they're just studios around the regional areas. Is that right?

We own the radio stations, we decided that we want to purchase, own all of our properties. Some of those properties ended up being in company family trust. So when the company was sold. Many of the properties were actually sold with the companies, which ARN is divesting on, that's for them. However, there were some legacy leases on premises that we owned as a family, we're actually now divesting of those properties. So they will no longer be related party.

And they're all independent valuations as well. So we're happy with the market rent that's been paid on those.

Another question?

Alison, just a quick question on your preference for capital management going forward given you're a large shareholder. And clearly, you did very well out of being consolidated previously, so well done. But going forward, what as a significant shareholder in the company, what are you seeing around the boardroom, preference to consolidate further peers or given our $95 million of franking credits are you hoping significant dividends to release some of that value going forward or buybacks given we're trading at 3x EBITDA. I forget the price at which -- when the deal was struck to acquire Grant, I think ARN was trading at closer to $2, from memory. But yes, noting that context, what is your preference going forward as a director and what are you pushing for capital management?

Okay. If I can just say my preferences as a director not as a representative of a shareholder. My duty is to this company as a director, and I never in a Board meeting actually state what the shareholder that my family has -- my mother has, what they want. In fact, I don't even discuss anything about ARN with them. So any comments I'll make will be more as my role as a director rather than anything that Grant Broadcasters might think. I agree with low debt. I've always had the trouble sleeping at night with debt. And I also believe the consolidation is definitely something that needs to happen in the industry, but it needs to be done properly, not willy-nilly and not overpaying. In relation to the couple of comments about the sale of the stations that Grant Broadcasters did in the deal that I negotiated. I thought at the time it was -- yes, of course, it was good value for us, but I also thought -- we also thought it was good value for ARN, which is one of the reasons why we took close to 20% -- a little more than 20% of the deal in script because we honestly believe in the consolidation of the 2 was more powerful than to 2 individual. We still believe that. Yes, we're very disappointed with the share price. In fact, that would bring our -- the multiple that was paid of around 8, down significantly because the share price has dropped about 65% from them on 20% of the mill. However, we still firmly believe in it, the transformation cost out program is that we absolutely need to rebase our -- redo our cost base and increase our profitability from there. It will just depend on what transactions are available and what shape they may take. But yes, I'm probably -- I could -- I might even be more conservative than some of the other directors on that. But it will all depend on the deal.

I don't want to embarrass Alison, but I can say she's one of the most honorable, ethical, tough people I've come -- I've ever dealt with, and her contribution is second to none on the board. So proxy advisers and shareholders want directors to have shares in the company. Alison is well and truly invested in making it a success. And Again, thank you for every contribution you make to the company, Alison. You're a legend. Okay. If there are no further questions in relation to this resolution, we'll move to voting on this resolution. The proxies received on this resolution are shown on the screen. Please make your vote online for Resolution 2A. Okay. Item 2B is for the reelection of Paul Connolly. We ask shareholders to consider and if thought fit, pass the following as an ordinary resolution. The Paul Connolly, he retires as a director by rotation under the constitution and the ASX listing rules and being eligible for reelection be reelected as a Director of the company. By way of background, Paul was appointed as a director in October 2012, and Paul has 12 years experience at ARN and over 30 years experience in corporate finance, media and telecommunications. The Board supports Paul's reelection. I now invite Paul to say a few words about his experience and the skills he brings to the Board. Paul?

Thank you, Hamish. I have over 30 years' experience in the radio audio industry, not alone just here in Australia, but further afield. And I've also had experience in other aspects of media, particularly in the case of newspapers and having witnessed the particular challenges that they have. I remain very excited about the potential for audio, newspapers in particular have through the -- and I just don't talk about Australia, but elsewhere have been defenseless in one way in dealing with the challenges of newer media. But radio to me, has a wonderful -- an audio is a wonderful opportunity still -- the aspect that particularly excites me is the as mentioned earlier in the presentation, where over 40% of our access now is digital, but yet the amount of advertising pie that we take from that is only a quarter of those. So I think there's a great opportunity because of the actual product itself, the consumption of audio remains very, very strong, not just here in Australia but elsewhere. My background is in broader finance, particularly around M&A and international capital markets. So -- and I would reiterate Alison's comments around any M&A whatever has to be extremely disciplined, but the market is crying out for consolidation. And in terms of my just broader governance experience, I've involved in a number of public company boards in Europe, in the U.S. and obviously here, and I chair UNICEF in Ireland for a number of years.

Are there any questions?

Thanks, Chairman, through you to Paul. Your signing off on the remuneration report, very informative, great report. Thank you, with very concise and precise details, particularly in relation to the manner in which the remuneration of the KPMs -- KMPs have been assessed. But the question relates to the comment in there that the company's policy is to reward for outstanding performance against stretch and set stretch targets. I was just curious as to whether you regard budget as a stretch target. In particular, did the rem committee considered that the FY '24 budget was a stretch target and is the FY '25 budget a stretch target. And then the remuneration report and the commentary in relation to the benefits to be payable to or to be voted on today in relation to Ciaran refer to a review undertaken by the Board in February 2025, which has been completed and been adopted, and it says that, that will be reported in FY '25 annual report. My question there is, were the stretch targets for the FY '25 budget changed as a result of that report? And if so, what changes were made?

Yes. In respect of the overall approach to remuneration, the current, as in through December '24, the current structure is based around effectively TIP scheme, which has been short-term focused. The reality is that 4 out of the last 5 years have not been hit in terms of the key 75% of the TIP scheme, which is based around financial metrics. So you could argue that the budget has been set at a fairly high level, and it hasn't been hit and consequently, KMP then have not hit 75% of -- or had a chance to hit 75% of their TIP scheme. We've -- the support of that rem approach -- LTI approach was universal, it was very strongly supported over many, many years. But we felt having examined that it needed to have more balance between -- because from an STI focus and an LTI focus and hence, we looked at it earlier on this year, calendar year '25 and splitting it now into a mix of STI and then the LTI, which will be measured off EPS. Those measures have yet to be set, but will be effectively from the first of January this year, and it will be a 3-year program of the LTI. The STI will change slightly in terms of, again, very financially focused where the STI will be focused on a measurement on the financial side, 80% of that will be measured on financial metrics. So it's a sort of a do or die and 20% in personal KPIs. So trying to get more and more retention is obviously a key part of the -- of any TIP scheme, and that has been something clearly in mind, but also to make sure that any scheme that we have is closely aligned to what shareholders, the outcome for shareholders. So hence, EPS and on a short-term basis, hitting particularly financial targets, which we certainly -- I don't think it'll be accused of them of having soft targets given that 4 over the last 5 years have been missed.

Thank you. Paul, just given you've been -- I think you are the longest-standing director on the board since 2012, I believe. So you've clearly seen the most of some of the good deals and the bad deals over your history with the company, but seems like everyone today is saying that we want to get debt down and we're going to be selective. But I think you just said the industry is crying out for consolidation. So just given your history with the company, you've seen all the deals, just appreciate your thoughts on, I suppose, how do we get debt down whilst potentially consolidating others, which you think is required and how do you balance that with dividends, et cetera? Because it does seem like we're in a bit of a bind, whereby we don't really have the currency to do any deals today if we want to pay down debt. But sort of in contrast to, say, buy SXL when they've got a lot of debt themselves. So yes, it would just be great to hear your thoughts on going forward, capital allocation, M&A, et cetera, given all those competing interests.

Well, as the official historian on the Board, I can say and even it predates me when I think what it used to be called APN Newspapers. I got involved through my newspaper background and the ownership of almost 40% by Independent News & Media out of Ireland. And I think back to even then the regional newspapers were ARN owned in Queensland over 60 titles at its peak, before my involvement, that business alone was contributing over $100 million in EBITDA for newspapers. Now thankfully, we sold those probably 7 or 8 years ago at this stage, but EBITDA had, at that stage, come down to less than $10 million. So you're witnessing the challenge on that particular aspect of traditional media has been withering, I guess, across the globe. Going back again to the history here, ARN was made up of a lot of joint ventures, particularly with Clear Channel out of the U.S., which had its own challenges, but there's a lot of JVs, not including radio, I might add. And we decided over a number of years, including more recently to, for want of better word, tidy up the strategy and become a outside of the Hong Kong investment, 100% focused on audio. And if you -- some of those divestments, particularly around the outdoor business, I think were pretty good transactions and resulting in capital back to shareholders. Also, the focus around we divested out of New Zealand, which is NZME. Again, I think making a pure-play focus on Australia has been in audio is very important. In terms of just the overall strategy and when you look and you speak about consolidation and so on, I think the traditional media is effectively in the same -- in the broader valuation boat, if I could describe it as that. But it doesn't take away from the fact that it's crying out for consolidation. I think the disciplines in many ways will drive themselves because no one party seems to have notwithstanding some of the shareholders that sit with the various local media companies here, no one company has -- or maybe one perhaps coming down the line this year, but I suspect that they will have to hand the -- I'm referring to domain, but if that comes to pass, I'd expect the cash will have to go back directly to shareholders. So I think there's going to be -- the consolidation has been sought. But I think sort of a natural discipline that's going to have to be around that. And as you say, some of the currency to actually go and do the deals is obviously actually pretty limited. So it's going to drive some of the constraints and disciplines in any consolidation strategy.

Quick follow-up. Globally, given where you are based in, Ireland, I think, maybe not where you're based, but clearly, you've got a lot of experience in the sector. But globally, is there any -- you just mentioned domain, but the possibility that some global parties may look to the Australian market, and so we've got pretty healthy EBITDA margins and we're maintaining the 8% of the ad markets revenue, et cetera. So do you think there's any sort of global M&A that we could be the beneficiary of...

As an inbound.

Yes, as an inbound?

Well, first of all, I'd say the Australian media owners have been pretty good at defending their patch in terms of maintaining local ownership over many years. And in fact, David referenced earlier there about I think it's 2007 or a little earlier when there was actually these moves made -- predated me, but to take APN ARN private. And that was -- I hate to tell but it was at a price of about $6.90 and it was spurned by the market. But I think investment coming in on the media side, again, goes to some of the regulatory elements. I think the FIRB element around ownership by foreigners of media is one blocker. In the case of Ireland, in effect, we have very little ownership of domestic traditional media across newspapers and radio. And that is when you've got a very open European union-driven landscape. And I witnessed what happens then when your local media is then tends to get dominated by international who have arguably just a thorough financial focus, but for editorially, it can be a bit -- it can bounce around a lot, put it that way. So I'd love to say that the international market could drive, whether it's private equity or international media companies would drive appetite here and i.e., drive prices higher. I just don't see for a host of reasons that dollars landing here for chasing more traditional media companies.

Chairman, there's just one online question. This comes from Mr. Stephen Mayne. As a respected independent director, could Paul Connolly comment on whether the Board is assessing the heavy workload of our chair and whether it is appropriate to describe Hamish as an independent chair when he is associated with News Corp, one of our substantial shareholders as its nominee to Chair REA Group and when News Corp is controlled by its Executive Chair, Lachlan Murdoch, the owner of Nova, which is one of our largest competitors. Does Paul agree we need a new generally independent chair and is he available for the role?

Well, first of all, I can comment to say that I genuinely believe that Hamish is an independent chair. I've worked with some very interesting Chairs across the world. And I have to say, Hamish's sectoral knowledge, independence and overall counsel and direction of the Board is absolutely top class. And I have no concerns as to the independence and indeed the availability and to handle the workload in ARN for Hamish.

Adding to that, in the spirit of divestment, I've divested myself of a few boards. So Stephen, I really only have 3 primary boards that I work on at the moment. And I'm not paid for by News Corp. Yes, I'm a nominee Chair of REA, but I'm paid for by REA, and I totally respect and understand my fiduciary duties. So News Corp doesn't get treated any differently from any other shareholder in this company. So if there are no further questions in relation to this resolution, we will move to voting on this resolution. The proxies received on this resolution are shown on the screen. Please make your vote online for Resolution 2B. Thank you. We move on to Item 2C. It's for the reelection of Belinda Rowe. We ask shareholders to consider and if thought fit, pass the following as an ordinary resolution that Belinda Rowe, who retires as a director by rotation under the constitution and the ASX listing rules and being eligible for reelection, be reelected as a director of the company. By way of background, Belinda was appointed a Director of ARN in February 2019. She has extensive experience across marketing, communications, digital and media. The Board supports Belinda's reelection. I now invite Belinda to say a few words about her experience and the skills she brings to the Board.

Yes. Thanks, Hamish. As Hamish just alluded to, I do have an extensive experience in marketing, media and digital, I've worked extensively globally in Australia led companies here. U.K. and work with global businesses such as Publicis Media and also Telefonica. In my extensive career, I had a big role at Telefonica U.K., my last executive role, leading brand and marketing communications and particularly at that time, working on a customer transformation program, I was 1 of 5 leading executives in that business working with the Board on, obviously, the transformation there, which was very successful. Prior to that, I also worked -- I was there on the Board of -- Management Board of Publicis Media for 6 years and also led Zenith globally out of the U.K. In that time, I worked with a lot of large advertisers and marketers globally. So dealing with CMOs, CEOs, particularly around customer transformation, which is my expertise and advising them, particularly on digital transformation to unlock growth. So there were a number of big companies like Reckitt Benckiser, Nestle, L'Oreal. I worked with Oracle on a global basis to completely change their customer journeys to unlock new pipeline of growth, as well as a number of finance businesses like UBS and also NatWest just as a few examples. I also worked with News Corp and particularly 21st Century Fox at the time and worked on how they could actually grow their audience, and we transform the way that they worked and how they built audiences on a global basis. amongst their content distribution of their businesses. I also launched a unique content marketing program -- sorry, business, I was involved in a number of content acquisitions, which then integrated that into the company. We built a content marketing business, which involve really bringing together data content technology moving into the dynamic creative space, and that business was scaled across 32 markets. I really believe in -- as a result of my extensive experience in the audio business, I'm very passionate about that and the transformation that we're going through, very committed to, obviously, ensuring that we have a continued and engaged in growth in audience across the country. I think audio is one of the most sustainable media businesses that exist today and believe in what we're doing strategically and becoming a more digital based company to compete in the market against the likes of Spotify. So I believe I've got the experience to obviously fulfill our goals and objectives over the next 3 years and really actively commit to, obviously, improving the performance of ARN Media.

Thank you. Just a question for Belinda, but I suppose it more applies to the rest of the Board, apart from you, Alison, but just the lack of skin in the game, Belinda, I don't think you own any shares in the company. You've been here since 2019, great CV, but here we are today trading at sub-3x EBITDA. I would have thought that's pretty enticing. Chair, I think you said today, you personally think that the shares are very undervalued or something to that effect. But I think you owned 73,000 shares, $40,000 worth which relative to your $300,000 plus annual remuneration does seem a bit misaligned and I appreciate we all talk about creating shareholder value. But yes, it does appear that there is a significant lack of skin in the game from the Board and share ownership. So maybe if, Belinda, any comments on that, please, or broadly, any of the other directors, Paul, I think you've got 60-odd thousand shares. You've been here since 2012, so yes, I would appreciate some comments on that, please?

I might start, if that's okay, Hamish. So I joined at a time when we were divesting a lot of companies and perhaps I should have bought straight away, but I unfortunately didn't. And I have felt that I've had information, held information, and I didn't feel like I could transact while we're going through each of those discussions and transactions. I would like to invest, and we have talked about that in our Board meeting, and we will obviously interrogate that further as we move forward. But we need to obviously be in a position to be able to do that.

Third question independent of your question. It's something that I'm looking at addressing personally. I do believe from a personal perspective, the shares represent value. But we also say to our directors, it's entirely a personal decision ultimately. But I appreciate your question. If there are no further questions in relation to this resolution, we will move to voting on this resolution -- sorry, there is another one. Sorry, my apologies.

Further question to you, Belinda. Congratulations on your expertise. It was very impressive, and you clearly bring a great deal to the Board in terms of the contribution you can make. The question is possibly a little unfair in the same way that Charlie's question was a minute ago. But you are a member of the audit committee. And in the papers that the annual report and the other papers, there's a reference to the share buyback scheme being put on hold. I was just wonder why that hasn't been terminated or whether you and the Board are contemplating further share buybacks, which would not be in the interest of shareholders where you're seeking to perhaps reduce debt but pay out the dividends?

Well, we haven't been in a position because of, we believe we've -- couple of things, so obviously, been looking at different M&A situation. So we felt like we could not do the buyback at this stage. It's something that we're always reassessing and I'll get Hamish to add to that, and we do consider that as part of our decision-making around capital management.

Better buyback is not a priority at the moment for us. So I think we've been clear in terms of what the focus is of the company.

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Look, I think that's a technical question. It's not a priority for the company at the moment. Yes. Okay. If there are no further questions in relation to this resolution, we'll move to voting on this resolution. The proxies received on this resolution are shown on the screen. Please make your vote online for Resolution 2C. We'll move on now move on to the adoption of the remuneration report available on Page 44 of the annual report. Item 3 is to consider and if thought fit, pass the following as an ordinary resolution that the company's remuneration report for the year ended 31 December 2024 be adopted. I note that this resolution is advisory only and does not bind the Board -- does not bind the directors of -- or the company. Voting exclusion applies to this resolution. I now invite questions or comments on Resolution 3. Okay. As there are no questions in relation to this resolution, we will move to voting on this resolution. In accordance with the Corporations Act, no persons nominated as key management personnel in the 2024 annual report or the closely related parties will vote on this resolution. The proxies received on this resolution are shown on the screen. Please make your vote online for Resolution 3. The next item is Item 4 to consider and if thought fit, pass the following as an ordinary resolution. That for the purposes of ASX Listing Rule 10.14, Section 200B and 200E of the Corporations Act and for all other purposes approval be given for the issue to Mr. Ciaran Davis, CEO and Managing Director of 106,247 deferred rights in relation to the company's FY '24 total incentive plan award on those terms summarized in the explanatory notes. A voting exclusion applies to this resolution. I now invite questions or comments on this Resolution 4.

One online question from Stephen Mayne as follows. Could the CEO summarize his past LTI grants as to whether they have vested or lapse? And to what extent the performance of Kyle & Jackie O impacts his incentive arrangements. Also, has he ever sold any ordinary shares in the company or bought any on market without relying on an incentive scheme to build his equity position in the company? Please don't say look it up in the annual report and through ASX announcements. It's complicated, and the CEO could factually summarize the situation in 60 seconds.

Challenge accepted. In relation to the LTI grants, as Paul mentioned earlier on, 4 of the last 5 years have not paid out on the LTI. There have been a small number made in terms of personal KPIs. So the extent of the performance of Kyle & Jackie O is not a sole contributor, it is a part contributor because that is ratings related, then it drives into revenue, then it drives into cost management, then it drives into EBITDA, then it drives into shareholder returns. So it's fair to say the last number of years haven't delivered, but is not necessarily solely due to Kyle & Jackie O. I've never sold a single share since I've become CEO, which was 10 years ago. And yes, I have bought shares on my own. I haven't relied on the dividends or the contribution of those shares. I've got about 70,000 rights on my own, myself. So not that complicated and maybe a little less than 60 seconds.

Thank you, Ciaran. Are there any other questions? David?

Thank you. Look, mine is probably a little bit more specific. But in the February results, Ciaran, and you're the best person to answer this being a CEO and look, widely acknowledged as a very capable guy, one of the leading people in the industry, if not the best. So it's great to have you on board. But there's a lot of numbers for this company. We can forget about the cash flow analysis in the annual report. It's a little bit misleading with pre-AASB and all those things. But perhaps the most powerful number, Ciaran, in the company's result is in February, you have declared that you've delivered $27.5 million of free cash flow, which is after all of these payments after tax, and that's before we take into account the cash flow loser in Hong Kong, which is either going to turn around pretty quickly or alternatively presumably won't be a part of the company if it doesn't turn around. So let's look at Australia. $27.5 million of free cash flow is what's delivered, a little bit concerned about the fact that there's minimal tax there because that perhaps indicates Ciaran that there are a few one-offs, but maybe not. But could you just take the shareholders through that? Because if every number in the entire documents issued by the company, in my opinion, that is the most powerful number, $27.5 million of real cash -- free cash flow based on an enterprise value of around about $250 million or a market cap of $165 million, that's an encouraging position to be in, particularly as the Chair and the CEO, you've indicated there's cost out. You've indicated that Radio's market share is going to hold okay. But we all accept that traditional media is under pressure. Maybe TV is the worst of them all. Outdoors holding up pretty well. Radio is somewhere in the middle and Print is terrible, magazines are a dead and buried. But if you could give a little bit of guidance to the shareholders here today, Ciaran, you're an excellent guy, hardly experienced. But the stock keeps falling, and I accept the Chairman's remark that on very small volume, so it can turn around pretty quickly. But the stock keeps falling. Superficially, you read the reports, and they sound encouraging, et cetera, et cetera. But the number that's going to really deliver shareholder support is that free cash flow, which enables the company to either repay debt, pay dividends. But if you could give us a little bit of guidance on that? The competing priorities, Ciaran, of revenue is not going to be easy, but costs are coming out a little bit. Certainly, Hong Kong is not going to be a loss maker for much longer at a free cash flow line or at an EBIT line. I think everyone would appreciate a little bit of guidance.

I'm a simple man. And at the end of the day, you get revenue and you hold your costs and you try and get as much cash out of the business as you can. I think the enduring value of radio and audio around the world and having worked in 22 countries in radio is the ability of radio to generate extremely good cash when revenue was there. The cut-through is very, very strong. What most radio business around the world have had to do over the last 4 or 5 years is invest to stay relevant, both from a consumption perspective and from an advertiser perspective and invest in digital audio. We have been quite prudent in how we've done that and that we've taken on a license with iHeartRadio, which is a global platform with global tech, cost us about $1 million a year rather than building our own because we have a view that when you enter into that world, you've got to keep spending and keep spending to maintain that particular level of applications. We targeted very aggressively digital audio profitability so that we are not just investing in a product that consumers can listen to that we can't monetize, and we made digital audio profitable last year. It will also be profitable this year. But as you saw from the presentation today, it isn't any more separate from the business. It's part of our business. We believe we've made the investments in that. We've also made the investments in talent, which many people have spoken about. But talent is the differentiator in radio. If you don't have live and local talent in regional markets, particularly we're seeing it, if you don't have the best talent in metro markets, then your ratings are going to suffer, and you won't be able to drive the revenue coming through. In terms of the how we look at the broad business. talent would be mostly our biggest contributor. But we've also had to scale up and look at our commercial team and look at the ability of the commercial team, not just to sell radio, but to sell digital audio. So I'm delighted that Michael Stephenson has joined us from Nine, a proven expert in the selling of total communications and total platforms. Also delighted that I'm strengthened by Alexis Poole as our new CFO, who has a lot of experience in both private equity and also family businesses through Mars for over 20 years. So the skills that we're bringing at a management level also gives me great comfort that we've got the ability, not just to monetize, not just to drive ratings because we have a very good commercial content team as well, but also the financial resources to help me make sure that the cash return is what we want. And at the end of the day, we do believe in the strong cash returns. We do believe this is a business that can deliver more cash. We're taking more cash out. And subject to all the discussions that we've had around M&A, the focus would be on dividends and would be on paying down debt.

And Chair, you may not be prepared to do this, and that's perfectly understandable. In a volatile times, a lot of companies are not prepared to give an indicator as to the future. But Ciaran, the $27.5 million, I think the critical issue for shareholders as to whether the shares go up or down or sideways is whether that number stays the same, it goes up or goes down. Certainly, I totally agree with the chair that free-to-air is under massive pressure. Print is under monumental pressure, magazines are dead, radio is sort of maybe not the best media, digital and the Googles of the world are, but still making a lot of money, Ciaran, $27 million from the Australian free cash flow. That's after interest, after lease payments. So forget about all this rubbish of accounting reporting, sorry to the auditors of AASB and whatever, that's real hard numbers in your February announcement. But based on $165 million market cap, the company is cheap if you can keep on delivering that. But are you prepared to give any view just a rough guidance as to whether you're confident that will be higher in a couple of years' time or lower?

You've nailed the key issue. We believe and agree with you in that regard. So that is the focus of the Board and management going forward. What I would say, just as extra color on Hong Kong is that if you believe the narrative that we're prepared to divest ourselves of business and be bloody ruthless at doing it, we will. We've been in Hong Kong for a long time. But we have been committed to the staff in that business and being in a tricky position through all that's happened over the last 5 years there, including more recently, tariffs, and the effect that, that may have on that business. It has been a drain. But as we -- as Ciaran said in his presentation, we're reviewing our strategic options there. So we want to optimize that business if we can deal with that in whatever way, we will. And I think that will only enhance our local operations going forward. So -- but we are focused on exactly your point.

Hong Kong is either going to perform or not be there. So I accept that, and it takes a while, and it's gratifying to hear you're considering the strategic options. So well done. I take a dissimilar approach. But it comes back to Australia. That's where most of the revenue is and that's where the free cash flow is coming from. And I totally respect if you're not prepared to give any guidance as to whether your confidence is going to go up or stabilize or whether you're concerned it might decline as free to air is, I respect that. But the single biggest issue for shareholders and shareholder value is where that number goes to. And it's sitting there at 27.5%, forget about Hong Kong. It's a little bit of a marginal play. But is there any guidance over the next 2, 3 years?

I don't think Hong Kong is a marginal play to the operations as we see here at the moment. We don't like giving guidance certainly at this point. What I would say, though, is that we are focused on exactly the issues that you've outlined. We've gone through a massive restructuring at the minute. We've got some content issues that we're dealing with around Kyle & Jackie O in Melbourne, but we think that we've got the right strategy for that. We've got an experienced Board. We've got the best CEO in the market. We've got new commercial managers, new CFO. And I think cash flow conversion and driving profit and EPS growth is critical. So I guess the market ebbs and flows, we've just been through an election. There's been a bit of a bump there. I don't really want to give any forward guidance at the moment. Yes, to some extent, our competitors are saying the market short at the moment. But I think over the long term, we're very committed to this business. And because we've divested ourselves of so many businesses our priority and our focus is Australia. And we believe, just as a narrative, we believe that this is a business that can survive and do very well. Any other questions?

Just as we're talking about sort of strategy and Ciaran, just I never really understood but the digital strategy, podcasts, et cetera, like personally, I listen to lots of podcasts, and they're great, but somebody mentioned before, we're competing against the Spotifys of the world, et cetera. And I mean, their ability to pay for talent, Joe Rogan at $100 million or whatever it was is a massive number, and clearly, we can't compete with that. But I think Ciaran, you said you're a simple man, but I'm just trying to -- I've never really understood -- I know you've got the iHeart platform, you're renting as opposed to Southern Cross has built their listener. But could you just explain how we actually benefit from the growth in podcast? Because it does seem like the only beneficiary to date is the talent because they're extracting a huge amount for some of these deals. But maybe Kyle & Jackie O, I think they've got their podcast, how much of our digital revenue comes from that? And why do I listen on the iHeart platform as like all my podcast, again, it's just Apple or Spotify. So just trying to very simply how we, as a company, we've got some talent, but how do we actually compete going forward in podcasting and monetize that, please?

Very good question around podcasting and the monetization of it in that it's -- if you're creating a podcast, you have to have well over probably 2 million downloads a month to make any sort of money, and I'm talking about maybe 10,000 or 20,000 per month on that. So as a strategy, we have never invested heavily in terms of original content creation because essentially, you start each podcast with an audience of 0, which is hard to monetize. Our strategy has been around partnering with global distributors and publishers. iHeartMedia being one, BBC being another and New York Times being another, Audioboom being another, where we do represent their content here and sell it at a revenue share basis. So from our perspective, there's no upfront investment on it. The margin is obviously not as good, which is why margins in digital audio are a bit lower. And what we try to do is make sure that when we bundle podcasting, podcast products, is that we actually make sure that the products that we develop and we own 100%, like the Kyle & Jackie O or Christian or whatever else we have on ourselves that they are very much part of that bundle because the margin cut through is very strong. I think trying to compete in a world where you're creating podcast content is going to be very difficult because anybody really, the barriers to entry are nonexistent. So for us, what we do is we focus on the excellent content that we do represent and that we do own. And as we saw in the Audiosphere, we make sure that we promote that content on the airways. And then when we sell it, we bundle it as part of a package because advertisers increasingly are not just looking for radio. They do need digital audio products in there as part of the response that we provide to briefs. So we maintain a low investment in terms of development of new podcasts. We will do some, but not many. We look to partner where we can. And there's been a number of podcast business that have been up for sale over the last 12, 18 months, that are small, have reached a certain size, but they need scale to really grow. And we've walked away from them because they're just not part of what we want to try and do. But radio is core. Having a podcast suite is really important as you sell to advertisers. And then as we've done with the likes of, say, 3:00 p.m. pickup, which is a program on in the Sunday, and mid-weekdays on the KIIS network, there are 2 individuals who have created a great podcast. We represent them but they're also on a radio show. So we're able to cross promote between the 2. And that's the real benefit of having an audio sphere working where you can cross-promote.

As there are no further questions in relation to this resolution, we will move to voting on this resolution. Proxies received on this resolution are shown on the screen. Please make your vote online for Resolution 4. Okay. Item 5, regards to the new long-term incentive plan for FY '25, please consider and if thought fit pass the following as an ordinary resolution that for the purposes of ASX Listing Rule 10.14, Section 200B and 200 of the Corporations Act and for all other purposes, approval be given to the issue to Mr. Ciaran Davis, CEO and Managing Director of 1.2 million-odd performance rights with a face value of $863,067 in relation to the company's FY '25 long-term incentive award on the terms summarized in the explanatory notes. A voting exclusion applies to this resolution. I now invite questions or comments on Resolution 5. As there are no questions in relation to this resolution, we will move to voting on this resolution. Proxies received on this resolution are shown on the screen. Please make your vote online for Resolution 5. Finally, Item 6 regarding the change of auditor. Please consider and if thought fit pass the following as an ordinary resolution, that for the purposes of section 327B of the Corporations Act and for all other purposes, Ernst & Young, having been nominated by a shareholder and having consented in writing to act in the capacity of auditor be appointed as auditor of the company with effect from the date when ASIC consent is granted. I note that as of the date of the meeting, ASIC consent has not yet been granted, but we expect ASIC consent should be forthcoming. And so this change should take effect from the date of ASIC consent. I now invite questions or comments on this final resolution. Okay. If there are no questions in relation to this resolution, we will move to voting on this resolution. Proxies received on this resolution are shown on the screen. Please make your vote online for this final resolution 6. Ladies and gentlemen, that concludes the business of the meeting. On behalf of the Board, I'd like to thank you for your support. Shareholders are reminded that they can submit their vote online until 5 minutes after the meeting closes. The results of the poll will be announced to the ASX later today and I will be available -- and will be available on the company website. Thank you for your attendance and participation. I now declare the meeting closed. Thank you, everyone.