Southern Cross Media Group Limited (SXL.AX) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the Annual General Meeting of Southern Cross Media Group Limited. My name is Heith MacKay-Cruise, Chair of SCA. I joined the Board in October 2020 and became Chair of SCA in March 2024. I'm joining you today from Sydney and would like to begin by acknowledging the traditional custodians of the land on which we meet today, the Gadigal people of the Eora Nation. I pay my respects to their Elders past, present and extend that respect to all Aboriginal and Torres Strait Islander people joining us here in Sydney or elsewhere as part of our virtual meeting. I've been informed that a quorum is present, and I'm pleased to officially declare the meeting open. Thank you for joining us today. Today's meeting is being held in person at 52 Goulburn Street, Sydney and virtually using an online platform provided by Computershare. This platform allows shareholders, proxies, corporate representatives and guests to attend the meeting remotely by watching a live webcast of the meeting. In addition, shareholders, proxies and corporate representatives can ask questions and submit votes in real time. To allow sufficient time for those participating online to ask questions or vote, I now declare voting open on all items of business. I will provide an opportunity for those in the room and online to ask questions and vote later in the meeting. Before moving to housekeeping matters, I would like to ask my fellow directors to introduce themselves to you. Ido?

Thanks, Heith. Hi, everyone. I'm Ido Leffler. Like Heith, I joined the Board in 2020 and was most recently reelected by shareholders at the 2023 AGM. I'm a member of the Board's Audit and Risk Committee and the People and Culture Committee. I look forward to telling you more about what I will be bringing to SCA when I submit myself for reelection later in the meeting.

Hello, everyone. I'm Marina Go. I chair the People and Remuneration Committee for Southern Cross Australia. I joined the Board in October last year and was elected last year, and I thank you for your support.

Good morning, everyone. I'm John Kelly, SCA's CEO and Managing Director. I've been with the company since 2016 and been Managing Director since July 2023. I look forward to giving an overview of our trading performance and strategy later in the meeting.

Thank you, everyone. We're also joined today by -- on my far left, Sarah Tinsley, our Company Secretary; as well as members of SCA's senior leadership team. I'll shortly ask Sarah to run through some administrative matters and will assist with online questions from shareholders later in the meeting. I'd also like to welcome Amanda Campbell and Tom Keary from the company's auditor, PricewaterhouseCoopers, who are available today to answer any questions in relation to the audit for our most recent financial year. Finally, Chris Dedrick from Computershare is also with us today. Chris will act as the returning officer for the purpose of conducting and determining the results of the poll on today's resolutions. Before we move to the formal agenda of the meeting, I'd now like to ask Sarah to outline the processes for shareholders to vote and ask questions during today's meeting.

Thank you, Heith, and welcome, everyone. Voting today will be conducted by poll on all items of business. As Heith has mentioned to you earlier, we've opened voting on all items for those participating online and those who are eligible to vote. For those online, you will see a voting icon is available on your screen. Selecting this icon will bring up a list of resolutions and present you with voting options. For those voting online, you're free to submit your votes at any time. To cast your vote, you should select for, against or abstain for each resolution. Your vote on each resolution will be automatically recorded. There's no need to hit the submit or enter button. Please ensure you cast a vote on all resolutions. Once you've voted, you'll receive a vote confirmation notification on your screen. You can change your vote at any time before the Chair declares the meeting and the voting closed. To change or cancel your vote, click the link labeled Click Here to change your vote at any time before the poll closes. The shareholders, proxies and corporate representatives present here in person will ask you to vote once we've gone through all the items of business for today. You will be able to do so by completing the green voting card provided to you when you registered. White cards are for visitors who cannot vote or ask questions today. Shareholders who do not have a green card are not entitled to vote on any items of business. The Chair will provide a warning before we close the voting at the end of the meeting. And as Heith also mentioned earlier, Chris Dedrick from Computershare will act as our returning officer for the purpose of conducting and determining the results of today's poll. We'll be announcing the results of the poll to the ASX later today. As the Chair, Heith will ensure that shareholders have a reasonable opportunity to ask questions and discuss the items of business during today's meeting. Because this is a hybrid meeting, we'll first take questions from those physically present in the room, followed by written questions from participants who have joined us online and finally, any audio questions from online participants. If you're attending the meeting here in person, only shareholders and validly appointed proxies and corporate representatives who were given a green or yellow card upon registration are entitled to ask questions. For those attending in person, when the Chair calls for questions, please raise your green or yellow card and state your name and the organization you represent before asking your question. If you're attending the meeting online, you can submit a question at any time during the meeting via the speech bubble icon on your screen. Type your question in the chat box on the right of the screen and then select send. Confirmation that your message has been received will appear on your screen. The Computershare platform also provides a facility for audio questions, which is appropriate considering our company. To use this service, please follow the instructions below the broadcast window. The Chair will address your questions after each resolution. Your questions may be moderated. And if we receive several questions on one topic, we may amalgamate those questions. While time constraints may prevent us from answering all questions, we'll do our best to address all of your questions during the meeting today. If we do run out of time, we'll answer your questions via e-mail or by posting responses on our website. Where appropriate, the Chair will ask Amanda Campbell from PwC to respond to any questions received about the conduct of the audit. I'll now hand you back to the Chair to get into the substance of the meeting.

Thank you, Sarah. I will now provide a brief overview of SCA's fiscal year '25 focus and achievements and our plans with respect to our proposed merger with Seven West Media Limited. I will then ask our CEO, John Kelly, to update the meeting on the company's operating performance, key financial metrics and strategic milestones achieved through fiscal year 2025. We'll then move on to the other business to be considered and vote on the resolutions. It is a true honor to be here addressing you today at my second AGM as your Chair, with the first full financial year completed since I assumed the role in March of 2024. It's been a year where strategy and strong financial discipline have delivered tangible outcomes, results and opportunities for your company. Our results for the financial year showed revenue growth of 5% to $421.9 million and underlying group EBITDA of $71.1 million, up 34.4% on fiscal year '24. This performance was led by the growth in digital revenue, which was up 28.8% on fiscal year '24, with LiSTNR's EBITDA contributing increasing by $12.9 million. As of fiscal '25, LiSTNR is now EBITDA and cash flow positive. Importantly, our growth in both net cash from operations and strong cash conversion for fiscal year '25 resulted in a significant reduction in net debt of $40 million to $67.6 million with the leverage ratio down to 1.10x as at 30 June 2025. Given the proven results delivered by this effective financial discipline, alongside the sustained operational momentum, the Board was in a position to pay a dividend of $0.04 per share fully franked for fiscal year '25. I'd like to thank our shareholders for their continued support throughout the company's period of transformation. We have had confidence in the company's All about Audio strategy and fiscal year '25 marked the realization of our divestment in all regional television assets. Assets that challenged our monetization, given the lack of content control and advertising disintegration. And our ability to transition to a single-minded focus on our leading radio and digital audio assets led by LiSTNR, the Hit Network and Triple M. Our market-leading position with The Audience That Matters being 25- to 54-year-old age group and the continued strength of LiSTNR in the digital audio sector drove increased commercial returns for our advertisers and our digital revenue along with it. We have been long-standing advocates of the strategic benefits and necessity of media consolidation in the Australian market for some time now. The Board believes that consolidation is the best way to achieve the economies of scale for audiences and advertisers to enable media companies to genuinely compete against the global tech giants. In contrast to previous recent years, which have been impacted by engagement with various proposals put forward by other media companies and consortiums, fiscal '25 has been a year where the Board and management have had the benefit of sole focus on business activities. As a result of the disciplined execution of our company strategy, we have built a business with a market position that presents a compelling and competitive proposition for a prospective merger. We are pleased to share with you the detail of this proposed merger on 30th of September this year, being a merger with Seven West Media to create a leading integrated total TV, Audio and Digital platform, combining SCA and Seven West Media's brands, broadcast and digital channels. This would create the largest broadcaster in Australia with revenues of $1.8 billion and assets reaching 100% of the Australian population. Most critically, both SCA and Seven West Media have market leadership across The Audience That Matters 25- to 54-year-old age group, which means that the merged entity would be positioned to offer advertisers, clients and shareholders the integration, synergy benefits and growth prospects of our combined strength across both platforms. In terms of the opportunity for our shareholders, the proposed merger and combination of complementary assets will deliver significant revenue upside with a further diversified revenue base of 65% TV, 25% radio and 10% print. The exchange ratio represents a good outcome for our shareholders, especially as Seven West Media contributes approximately 75% of revenue and 69% of EBITDA, and our shareholders will own 50.1% of the merged company. We were pleased to welcome the findings of the independent expert report commissioned by your Board earlier this month, which reinforced the Board's belief and found that the scheme is in the best interest of Southern Cross shareholders. Though it is Seven West Media shareholders who will vote on the deal and therefore, no report for SCA shareholders is required, the Board was committed to commissioning this independent expert report for our shareholders to provide objective analysis of the benefits and the risks of the proposed transaction and to give shareholders comfort. This proposed merger would mark one of the largest and most impactful media activities in recent Australian corporate history. And in the Board's view, is supported by compelling underlying fundamentals, a clear strategic path forward and demonstrable benefits to shareholders, which represent the strongest strategic fit of any consolidation proposal we have so far considered. We look forward to bringing you an update on its progress in the coming months. I'd like to acknowledge the continued delivery on the company's transformation strategy, evident in the further momentum of our Q1 Fiscal '26 results announced on the 16th of October. These results show that strong sales performance continued to deliver commercial share gains in both broadcast and digital with quarterly revenue up 4.7% and underlying EBITDA up 129% on prior year. I know John Kelly will talk more about these results and our momentum in short course. These results and the proposed merger with Seven West Media are testament to the success of SCA's transformation with cost out, disciplined financial management and a successful focus on growing and monetizing The Audience That Matters. The Board and executive team remain committed to continuing the company's positive performance and returns for shareholders. I would now like to make some comments on the resolutions, which are being put to shareholders today and set out in the Notice of Meeting. Resolution 2 relates to the reelection of Ido Leffler as a director. Ido is retiring by rotation and being eligible, offers himself for reelection. Ido has a long and successful experience in developing digital brands and extensive networks in the start-up communities of Silicon Valley and Australasia and has long-standing Board experience. We will hear from Ido later in the meeting. Following the strike on the remuneration report last year, the Board undertook a comprehensive review of the company's remuneration framework and engaged with major shareholders and remuneration consultants to develop a new executive incentive scheme. The new scheme shifts the focus to absolute shareholder returns, ensuring incentives of senior executives of SCA are aligned with shareholder outcomes. As such, we ask you support to support both the adoption of the remuneration report and the grant of the performance rights to the CEO. Moving to the shareholder requisition resolutions put forward by Sandon Capital. These resolutions are not supported by the Board. The effect of these resolutions, if passed, will be that all but John Kelly would cease to be directors of the company. This would require John to appoint additional directors to ensure compliance with this Corporations Act. Sandon has not nominated any directors and the removal of directors without replacements would cause significant disruption to the ongoing management of the company. The Board strongly believes that the proposed resolutions are not in the best interest of the company, and we ask that you vote against Resolutions 5A to 5D. In regard to Resolution 6 to amend the constitution, this has also been put forward by Sandon Capital and is not supported by the Board. This proposed amendment has the effect of restricting the ability of SCA to issue more than 25% of its shares without shareholder approval. If the amendment were made, it would be inconsistent with the recently announced proposed merger with Seven West Media and may result in the deal not proceeding. Therefore, the Board asks you to vote against this resolution. Finally, on behalf of the Board, I would like to thank our many stakeholders, including our leadership team and SCA's people, along with our advertisers, partners and the communities we serve around Australia for your ongoing support of SCA. In particular, I extend my thanks to you, our shareholders, for your patience and trust through our transformation period. And I'm very pleased that we are now able to deliver returns and compelling growth prospects via the execution of this strategy. I now invite our CEO and Managing Director, John Kelly, to say a few words.

Thank you, Heith, and good morning again. It's a privilege to be here as Chief Executive Officer of Southern Cross Austereo. When I spoke to you last year, I said SCA was a company in transformation. 12 months on, we are now a business with renewed confidence, clear momentum and a sharp focus on the audience that matters across the Hit and Triple M networks and LiSTNR. As you know, we are also actively and collaboratively working towards the merger with Seven West Media and more on that shortly. I'm proud to say that FY '25 was a year of delivery. We achieved group revenue of $421.9 million, up 5% on the prior year, with underlying EBITDA up 34% to $71.1 million. Net debt was reduced by almost $40 million to $67.6 million, and the Board reinstated a fully franked dividend of $0.04 per share, a clear signal of the strength of our balance sheet and the confidence we have in our business model. We've also recently released a market update on our results for the first quarter of FY '26, which demonstrated our positive operating momentum has continued. Our Audio revenues for the 3 months ended 30 September 2025 were $105.1 million, up 4.7% on the prior year. Our Q1 Metro Radio share was 29.8%, which is up 1.8 points on the previous year with SCA achieving 12 consecutive months of share improvement. LiSTNR digital audio revenues also continued to outpace the market, with Q1 share increasing to 49%, up 5 percentage points on the prior period. Cost discipline remains a key focus with total cost for Q1 down 3.4% on the prior year and non-revenue-related costs down 5.8%. Our underlying Q1 EBITDA of $14 million was up 129% on the prior year. In Q2, SCA has continued to gain revenue market share in a challenging advertising market, and we've also made further refinements to the operating cost base. Today, we can reaffirm that we are on track to meet our FY '26 underlying EBITDA guidance of $78 million to $83 million. Our success rests on one simple proposition, serving the audience that matters. For advertisers, that means connecting with the people that drive consumption and conversation around the country. For audiences, it means content that entertains, informs and inspires every day, everywhere and across every platform. In FY '25, SCA maintained its leadership in the 25 to 54 demographic, the most commercially valuable audience in Australia and has done so for 34 consecutive surveys. Across the Hit and Triple M networks, alongside our DAB+ and LiSTNR brands, we now reach 9.9 million Australians each and every week. In regional Australia, we connect with 70% of all commercial radio listeners, more than double the reach of our nearest competitor. This audience leadership is the foundation of our company, and it continues to underpin our financial performance. Broadcast radio remains a resilient and profitable part of our business. Our Metro radio revenue grew 4% in a flat market, while our regional network held steady in a market declined 2%. Strong local relationships, compelling brand-safe national content and consistent execution continues to differentiate SCA. Digital audio is also driving growth. LiSTNR, our owned and operated digital ecosystem, now has more than 2.5 million signed-in users and delivered year-on-year revenue growth of 29% to $45.1 million. LiSTNR is now EBITDA cash flow positive just 4 years since launch. Our proprietary advertising technology, the LiSTNR AdTech Hub has best-in-class ad tech features, enabling advertisers to achieve greater targeting precision and measurable returns. More than 1/3 of LiSTNR campaigns now use these AdTech features and the average value of digital campaigns has increased by almost 80%. Together, our broadcast and digital platform give SCA unmatched reach, data and integration across Australian audio. Our brands are built on great people and great storytelling. With a significant amount of change happening in other networks, our focus has been on developing new talent and consistency for audiences and for clients with local talent that our listeners and business partners know, love and trust. In 2026, that focus pays off. We will enter the new calendar year with both the Hit and Triple M networks full metro lineups locked in and unchanged, a sign of strength, stability and an unwavering commitment to live and local content. That stability is a real competitive advantage. In an environment of constant movement across the industry, SCA's programming teams, talent and producers are heading into next year's confident and connected, delivering shows that cut through, drive engagement and integrate seamlessly for advertisers. 2025 has been a year of great success for SCA with record growth and total domination of The Audience That Matters, adults 25 to 54. We've been the #1 network in this, the money demographic across all six surveys this year with the seventh and final survey results the year out tomorrow. The Hit network continues to lead among women 25 to 54, while the Triple M network leads among men 25 to 54. Building on that strength, both networks will continue to deliver 10 locally produced breakfast shows across the metro markets, the most of any broadcast network in Australia. This combination of established and emerging stars delivers entertaining, trusted, brand-safe local programming that drives audience connection and client integration across every city. On Triple M, our tailored AFL and NRL Rush Hour shows will keep sports fans across the country entertained, while after an outstanding debut, Lu & Jarch return in early drive from 2 p.m. to 4 p.m. The network's lineup of Mick in the Morning with Roo, Titus & Rosie in Melbourne, Beau, Cat & Woodsy in Sydney, Marto, Margaux & Dan in Brisbane, Roo, Ditts & Loz in Adelaide, and Xav & Katie in Perth provides a powerhouse foundation of local, loyal and laughter-filled shows. On the Hit network, audiences will continue to connect with Fifi, Fev & Nick in Melbourne, Jimmy & Nath with Emma in Sydney, Stav, Abby & Matt in Brisbane, Bernie & Emma G in Adelaide, and Pete & Kymba with Ben Cousins in Perth complemented by Carrie & Tommy in Drive, and The Hot Hits With Nic & Loren in nights, and Lucy & Nikki in late nights and weekends. This balance of trusted familiar voices with fresh energy ensures SCA continues to grow the next generation of stars while maintaining the audience relationships that underpin our market leadership. We've also welcomed several stars to LiSTNR lineup, including Life Uncut, The Imperfects and Vain-ish, among our steady staple of favourites like Hamish & Andy, The Howie Games, It s a Lot with Abbie Chatfield, Darling, Shine! and KICPOD to name just a few. Our people are the heart of SCA and their creativity, professionalism and commitment have been central to this turnaround. We continue to invest in leadership and capability through programs such as SCA Leads and the LiSTNR Academy and through initiatives to promote inclusion, flexibility and well-being. Women now represent more than half of our workforce, and we are on track to achieve gender balance at every level of the business by 2027. Our gender pay gap is now significantly below the industry average, and we remain committed to further improving this key metric. Through SCA Embrace, our national charity initiative, we provided more than $55 million in media value to the e Cancer Council and Endometriosis Australia, supporting causes that matter to our audiences and our teams. Strong culture drives strong performance and results of the past year are proof of that connection. We also continued to strengthen our environmental, social and governance practices. In FY '25 we reduced greenhouse-gas emissions by 21%, largely through energy efficiency initiatives and the divestment of our regional television operations. We enhanced our cybersecurity posture and introduced mandatory data-privacy training for all employees. Good governance and responsible operations are integral to building a sustainable business and protecting shareholder value. Before I close, I d like to address the proposed merger between Southern Cross Austereo and Seven West Media, which was announced in September. This proposed combination is an important and logical next step for both companies, bringing together two complementary businesses to create Australia 's leading cross-platform media network with national scale across television, radio, print and digital assets. Our goal remains to deliver greater value to audiences, advertisers and shareholders through enhanced reach, data and innovation. Until this process is complete, our focus remains on maintaining our operational momentum and delivering on our FY '26 plan. So looking ahead, the priorities for the year ahead are clear: continue to grow audio revenues across both broadcast and digital, maintain cost discipline and strengthen profit margins, deepen our relationships with advertisers through data-led solutions, invest in people, technology and culture to sustain performance. The fundamentals of our business are strong, leading brands, growing audiences, a robust balance sheet and a talented team that knows how to execute. In closing, I want to acknowledge and thank our Chair, Heith MacKay-Cruise and the Board for their ongoing guidance and support to myself and the broader SCA team. I'd also like to thank our executive team and the 1,200 people who make up SCA. Their energy, creativity and commitment continue to inspire me each and every day. To our advertisers and partners, thank you for your support and confidence in our platforms and your collaboration in helping us reach The Audience That Matters. And to you, our shareholders, thank you for your continued trust as we navigate this exciting next phase of growth and change. I'm energized about our future and the next chapter of growth for SCA. FY '25 was a year of delivery. FY '26 will be a year of evolution, one that positions SCA and potentially the combined group, for long-term growth in an ever-changing media landscape. Thank you.

Thank you, John. We will now move to discussion of the formal items of business set out in the Notice of Meeting. The Notice of Meeting has been made available to all shareholders and is also available on SCA's website. The explanatory notes in the Notice of Meeting explain the background to each of the items of business. Shareholders have had an opportunity to consider those matters, and I will take the notice of meeting as read. Let's now turn to the items of business on the agenda. I will step through each item of business and accept questions after each item. The online platform is still open, so you still have some time to submit a question if you haven't already done so. As I mentioned earlier, the poll is open on all items. If you haven't yet voted, I encourage you to do so now. The number and percentage of valid proxies received before the meeting are now shown on the screen. These proxies have been reviewed in accordance with the Corporations Act and the ASX listing rules and any proxy votes required to be excluded by those requirements have been excluded from the numbers on the screen. Moving now to item 1, to receive and consider the financial report of SCA and the directors' report and auditor's report for the financial year ended 30th of June 2025. As shareholders are aware, there is no requirement for a vote in relation to adoption of the financial report, although we, of course, would welcome any questions. Are there any questions from shareholders in the room today in relation to this item or either mine or John's speeches? There's a microphone coming.

Charlie Kingston. Just a quick question around the merger and I suppose, the capital allocation of the merged group going forward because SCA recently started paying out some significant and very healthy dividends, which was, I suppose, appreciated by the market, hence, the big rerating in the company, but Seven West, conversely, I forget how long it's been since they've paid a dividend. But clearly, you're inheriting SCA or SXL is inheriting a fair bit more debt post the merger. So how do you think about the ongoing ability of this group to return money to shareholders, given there will be a fair bit more debt. And I suppose, I don't know, TV seems to be shrinking a fair bit faster than some of the other media divisions. The news that the West seems to be holding up okay. But yes, just how do you think about capital allocation post this merger going ahead, please?

Yes. Thanks, Charlie, for your question. Firstly, I would say that the proposed merger with Seven West Media brings 3 substantial benefits. Firstly, to the advertising community by actually having similarities with The Audience That Matters, 25- to 54-year-olds across a brand -- a portfolio of brand suites. Secondly, with regards to the opportunity to leverage those assets with our talent and our staff and the marketing opportunities. But thirdly, to the heart of your question, what it does for our shareholders. While the matter of capital strategy is a matter for the potential once the merge is actually approved, should it be approved, then it is a matter for the MergeCo Board. But the operating principle that we have applied here at Southern Cross Austereo has been to make sure we have very robust operating leverage. We've cleaned up our balance sheet, and we've been able to actually pay down the debt and in so doing, been able to apply a dividend policy being 65% to 95% of NPAT paid. So on that basis, that would be the principles we would apply. To the heart of your question, though, that is a matter for the MergeCo Board.

I understand that, but surely, you must have had some sort of forward-looking forecast. We are the buyer in this transaction. So do you have a view on the -- because that was one of the big appeals for SXL was the distributions. It was a very healthy yield prior to this. So I understand it's a decision for the new MergeCo Board, but you making this transaction, I presume you did the work to understand if you would be able to continue returning surely it's accretive and if it is accretive or enhancing for the value of MergeCo surely you must have some thoughts on if this should strengthen the group and enable it to continue paying healthy dividends going forward. So just appreciate some more color, please.

Sure. Sure. Thanks again for your question, Charlie. And you are quite right to call out, it is EPS accretive, quite substantially to the tune of more than 100%. And we have had and should the deal continue and be approved by the shareholders and the regulators, then we would look to -- I think one of the great appeals of the scale platform is a potential rerating and the target to get into the ASX 300, which supports liquidity. To your heart of your question around due diligence, yes, we applied considerable due diligence to the asset that brought us to the proposed merger that's in front of both our shareholder groups. And the truth is that we see a significant opportunity to pay down the debt, and we want to be in a position where we will be paying dividends, but that is a matter for the MergeCo Board.

Gabriel Radzyminski, Sandon Capital. Just following on from, I think, was some good questions from Charlie. You just cited 100% accretion on EPS. Can you just clarify for everyone listening in that that's on the basis that you will have cost savings over 18 to 24 months? Is that correct?

Yes. So that is pre-synergies. But the synergies, you're right, it's $25 million to $30 million of cost out 18 to 24 months from completion.

So basically, shareholders won't really know what's happening. And hopefully, from the company's perspective, they'll have forgotten the promises that were made 18 months or 2 years prior. I don't -- I just think Charlie's questions were pretty simple and straightforward, and I think you've been evasive in terms of answering them. It's a bit of a cop out to say that merged Board will deal with this. Shareholders are being not given an opportunity to vote on this, but you're just not answering the questions.

So can you clarify what is your question.

Charlie's question, he asked a simple straightforward answer about the dividend outlook. And there's a very evasive response saying that will be a question for the merged entity Board.

Well, it is a question for the merged entity Board. Should the deal not proceed, then we're very clear around our current position on dividend payment. And the CEO has already made -- confirmed the outlook guidance, and we remain committed to that outlook guidance.

Very excited of the prospect that you mentioned the deal might not proceed, on what circumstances could that happen?

So when we went into this deal, there were 2 things, Gabriel, that you would -- and thank you for giving me the opportunity to remind shareholders. There were two specific things that we did to make sure that shareholders had protected their rights. The first was the independent expert report, which was just a couple of weeks ago released to the marketplace, that confirm that this deal is in the best interest of those shareholders. The second was a fiduciary carve-out. Normally, those carve-outs are done on the target, but in this case, it was on the acquirer. That fiduciary carve-out allows -- which expires, I might add, at close of business on Wednesday, the 26th of November this week, allows for any interloping bid for the Board to give due consideration to that bid.

On that one, in the remote possibility, does -- with the deadline expiring on Wednesday, does that mean if some -- if the Board receives something beforehand, it then has to decide by Wednesday? Or does Wednesday set a clock for it to consider whether the bid is superior or not?

I'll take that on notice. But my understanding is that it's close of business Wednesday, the 26 is when that time line and window closes.

That's correct.

Are there any other questions in the room? If not, Sarah, do we have any questions online? We don't. Anyone on the phone for questions?

No, not at this stage. Thank you.

All right.

Rather than leave things on a sour note, I think I'd also just make the point that frustratingly, the results that you've delivered as a Board, the comments that John made while positive, further from our perspective, just reinforce the frustration of the idiocy of the transaction that you've entered into. But I do think it's worth saying that you've done a fantastic job. And as I said to John when he came to discuss the results at the full year, he didn't make our job any easier by delivering such a good result. So I'd just like to say congratulations.

Thank you, Gabriel. If there were no -- just another check online?

There are no questions.

No. All right. So then if that's the case, I'm going to suggest that we now move to Resolution 2 and the reelection of Ido Leffler. As Ido mentioned earlier, Ido joined the Board in 2020 and was also most recently reelected by shareholders at the '23 AGM. Ido's digital and online experience have been integral to the development of SCA's LiSTNR platform and digital transformation over the past 5 years. I will now invite Ido to speak on his experience and continued commitment to SCA.

Thanks, Heith. I should have you record that for my mother. So good morning, everyone. It is a privilege to seek reelection for the Board of Southern Cross Austereo. Over the past term, I've been proud to contribute to SCA's transformation, strengthening our leadership in audio, accelerating our digital growth and continuing to deliver value for our shareholders, audiences and partners. As we look to the future, the possibility of a merger with Seven West Media represents an important moment in SCA's journey. It's an opportunity to build an even stronger, more integrated media organization that can deliver scale, innovation and enhanced reach across all platforms. This potential step demands a Board with a deep understanding of media, consumer behavior, digital transformation and governance. So our Board skills matrix is designed to ensure precisely that balance. And I believe my experience aligns closely with those priorities. My background in brand and consumer engagement, commercial strategy, digital innovation positions me to contribute constructively as we evaluate strategic options with the rigor, creativity and most importantly, accountability. Throughout this process, I remain focused on safeguarding shareholder value, supporting our people and maintaining the trust of our audiences and partners. If reelected, I'll continue to bring a collaborative and future-focused perspective to the Board deliberations, ensuring that our decisions reflect both the opportunities of a changing media landscape and the enduring values that define SCA. Thank you for your continued trust and support.

Thank you, Ido. The proxy results for Resolution 2 are now displayed on the screen. Are there any questions from shareholders in the room today in relation to this item of business? There's one at the front, Roger, and then I'll go to you, Gabriel.

Roger Coleman, shareholder. I'm voting against this resolution and also for Marina Go's resolution on the basis of raising a flag post merger. If you look at the 9Network Board and now you'll have some scale with the merger, it's very important that the Board quality is both up to and exceeds that 9Network has got. They've got people like Peter Tonagh, they've got Mickie Rosen from Disney as a corporate adviser right through the American Media landscape. And they've got Stan, Matt Stanton as the CEO, whereas the current CEO of Seven West Media is essentially a CFO, and that's where he's come from. It's very important for the Board post the merger to get a scale, a team with a breadth of history on this Board. You can't rely on people like Ryan Stokes and so forth to make substantial positive contribution to media decisions.

I take that comment as noted. Thank you, Roger.

Sorry, my question was actually, Chair, could you read out the resolutions and all the voting because I am struggling to read the fine print. For this one and all others. And while I've got the microphone, just a question for Mr. Leffler. Given your comments, why are you only going to be on the Board until June next year? What are we wasting our time for? I mean if the prospects are so good, why wouldn't you start? I'm asking you the question. I'm not deferring this question to the Chair.

Thanks, Gabriel. This was a decision made in the construct of the current deal that's being proposed with Seven West Media. And while I love this business, this is something that until June of next year is where I've given my commitment.

And to what I might do, if you're struggling to read them, I might just ask Sarah to read the resolution.

Yes, of course. So reelection of Ido Leffler. The votes for, there's 139,024,029 votes, which represents 78.34% votes against 37,405,730 votes, representing 21.07%. Abstentions are not recorded because of their low value and the proxy's discretion is 1,062,573 votes, representing 0.59%.

Sarah, are there any questions online or an audio?

We have one question here. And this question is asked by Mr. Stephen Mayne. Why didn't you disclose the proxy position to the ASX along with the formal addresses to allow for a more fully informed debate on Ido's reelection and all other items up for debate today? Which proxy advisers covered this meeting? And did they recommend in favor of Ido's reelection?

Well, for clarity, the Chair and CEO addresses have been submitted well before this meeting started this morning. And as is good practice, the proxy results and in fact, the final poll results from today will be submitted to the ASX by the end of today. There were 2 proxy reports that were produced on the company. And specifically to Resolution 2, they were supportive of Ido's reelection. And is there any more online?

No further questions.

And I think there was one more.

Just a question for Mr. Leffler. It sounds like you're the digital guru on the Board. But with all the rise of podcasting and the pivot towards that, could you just give us your thoughts, please, on clearly that the losses are shrinking. I think we might be breakeven on the -- the digital front, but just in terms of actually making that a highly profitable part of the business, do you think radio margins are very healthy? Do you think the digital side, podcasting, everything else will be able to get to a similar level of profitability or margins and how we're going in that front? And then two, post the merger with TV, do you think that gives us a better position to increase the margin from the digital side? Or does it make it harder? I'm not sure about digital TV, but just would be great to hear your thoughts, please.

Great question. And it's a question that we talk about at the Board quite frequently. And I'll defer to John in a minute. I'm sure he's got some perspective here, too. But digital is clearly the future. In general, more and more advertisers are looking for digital as a pathway to get to new audiences. And as digital penetration continues to grow in this market, particularly, it's going to be significantly more interesting, I think, for advertisers as we move forward, creating a significant opportunity for profitability and growth both in audio and in future businesses to come. So I think that there is a -- I think it's clearly going to be an ever-growing presence for this business and any media business in this country as it's representative in other markets as well. John, do you have anything to add there?

Just 2 things. One is that we are profitable after only 4 years of having a digital business with almost $50 million of revenue. Our aspiration is to get that to a 20% margin in QIP stock with 20% growth. That's 2020 is sort of a new mantra for the LiSTNR part of our business. We believe that's highly achievable. I think the second part in relation to the Seven West Media merger, we are incredibly excited about combining the digital assets of both companies. They have 15 million signed-in users on LiSTNR Plus. We have 2.5 million on LiSTNR. Combining those two with the data that, that provides and almost getting 16 million, 17 million Australians is an extraordinary advantage for both properties, but particularly LiSTNR. So we're very excited and we're talking about what that could deliver for both companies. So that is a huge advantage of the merger coming forward.

If there are no further questions on the reelection of Ido, I now move to Resolution 3. Resolution 3 is the remuneration report. We will now share the details of proxies lodged prior to the AGM in relation to this resolution. I will ask Sarah to talk to this in a minute. But as you can see from the proxies, we have strong support for the remuneration report. And subject to the results of the poll today, we anticipate this resolution will pass, in which case any votes cast with respect to resolution 7 will be declared null and void. Sarah, can we talk through the proxies?

Of course. So this is resolution 3, the remuneration report. Votes for, we have 142,238,600 votes, representing 80.73%; votes against 32,901,655 votes, representing 18.67%; abstentions, 1,321,415; and then proxy's discretion, 1,067,181, representing 0.6% votes.

Thanks, Sarah. Are there any questions from shareholders in the room today in relation to this item of business, Resolution 3, is the remuneration report. Are there any questions online?

There are no questions online.

Then the next item of business is to seek shareholder approval for the grant of 1,426,154 performance rights to SCA's Chief Executive Officer and Managing Director, John Kelly, under SCA's long-term incentive for fiscal year '26 on the terms summarized in the notice of meeting. The proxy results are displayed on the screen. And again, Sarah, I'll ask you to read them out, please.