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

Good day, and thank you for standing by. Welcome to the Southern Cross Australia Full Year Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, SCA's CEO, John Kelly. Please go ahead.

Good morning, and welcome to Southern Cross Australia results presentation for the year ended 30 June 2024. I would like to acknowledge the Gadigal of the Eora Nation, traditional custodies of the land on which we meet today and pay my respects to their elders, past and present. I extend that respect to Aboriginal and Torres Strait Islander peoples here today. I'm John Kelly. I'm joined today by our Chief Financial Officer, Tim Young. You will hear from Tim shortly for a detailed overview of our financial performance. At the end of our presentation, Tim and I, as always, will be happy to answer your questions. I'll first give you an overview of our results and achievements for the year. And in doing so, I draw your attention to the usual disclaimer at the end of the presentation. FY 2024 has been a watershed year for SCA as we encounter the significant headwinds of challenged advertising markets, coupled with the business disruption brought on by corporate activity, yet, we still have managed to deliver improving earnings with positive momentum into FY 2025. We at SCA, we are all about audio, and our focus is on being the most profitable and successful audio company in Australia. As you'll see from our results, our uncritical focus on the audience that matter across broadcast and digital audio is now delivering for our listeners and our business partners. We continue to focus on reducing our operating cost base, and we have progressively identified and actioned cost-out initiatives so that we can reset our cost base and improve our margins and cash flow returns. Our all about audio strategy is led by the listener ecosystem, which is powered by the broadcast content of the Hip and Triple M networks, along with Australia's largest podcast sales representation network. Most importantly, our last 12-month trailing digital audio revenues are now $35 million. Our second half digital audio revenues grew by 57% with the introduction of the listener at Tech Hub. Having achieved EBITDA profitability in Q4 of FY '24, we forecast listener will be cash flow positive for FY 2025. Turning now to Slide 3, which sets out the key financial aspects of today's results. In summary, you will see our FY '24 revenue was $499.4 million. Our strong focus on cost management capped nonrevenue-related or NRR costs below guidance at $308.4 million. Our EBITDA, excluding significant and nonrecurring items was $66.2 million, Ongoing capital discipline led to a further reduction in CapEx for FY '24 to $15.8 million, with net debt at $107.5 million, and the Board has decided to not declare a final dividend for FY '24 as the group prioritizes deleveraging. For FY '24, we recorded a statutory noncash impairment charge relating to licenses for broadcast radio, and Tim will cover this in the presentation shortly. Turning to Slide 4. This slide sets out some key high-level operating and financial highlights from our FY '24 results, particularly focused on our improved second half performance. The headlines on this slide reflects the benefits of the hard work and focus from the entire SCA team. The stronger operating momentum within SCA that was first evident in late calendar 2023, has translated to stronger financial performance for H2 with year-on-year underlying EBITDA growth of 8% in audio and 6% at a group level. We have achieved substantial growth and continued domination of the metro radio audiences that matter, leading the audience share of the critical and lucrative 25 to 54 demographic, the 24, and as of Tuesday, 25 consecutive national metro radio surveys. We have grown metro radio revenue share each and every month since December 2023. Continued cost and capital discipline meant that we achieved NRR costs of $308.4 million, below our guidance of $310 million. We have reduced CapEx in line with guidance to $15 million with a further reduction to $10 million forecast for FY '25. And finally, as we previously forecast, LiSTNR, Australia's best digital audio business in the fastest-growing segment of the media industry achieved EBITDA profitability in the fourth quarter of FY '24. Moving to Slide 5. The team at SCA is committed to building shareholder value. The next section of my presentation will focus on and demonstrate tangible progress of how we are driving improved financial performance and building value for SCA shareholders. Importantly, as I mentioned earlier, the stronger operating momentum within SCA that was first evident late in H1 carried into H2 of FY '24, leading to a meaningful improvement in H2 EBITDA. Let me now share with you the composition of this improved H2 EBITDA in more detail. At a group level, FY '24 underlying EBITDA was $66.2 million, which was down $11 million or 14% year-on-year. However, H2 was up $2 million or 6% year-on-year. Total audio underlying EBITDA was $76.3 million, which was down $3.9 million year-on-year, how the H2 was up $3 million or 8% year-on-year. Finally, the rate of loss in television EBITDA reduced in H2, down $1 million versus down $4.4 million in H1. Moving to Slide 6. There was an increase in our revenue momentum in H2 with H2 sales up 1% versus a decline of 3% in H1. And Total FY '24 sales were $499.4 million, down 1%. For Broadcast audio and H2, metro was up 1% and regional was flat year-on-year. In H2, Broadcast audio advertising revenue was down 1%, outperforming the overall market, which was down 3%. For digital, revenue growth continued its strong acceleration path with a 57% increase in H2. Importantly, our H2 growth was significantly higher than the overall market, which grew by 31%. Slide 7 highlights our metro radio national leadership in the core buying demographics of women, men and total people aged 25 to 54, which covers more than 70% of all agency briefs received. In particular, it shows that our lead grew in the second half with average share growing 3.5% points year-on-year. Hit is the #1 metro network for women aged 25 to 54, with average share growing 1.2% year-on-year. Triple M is the #1 metro network for men aged 25-54, with average share growing 3.8% year-on-year. This strong market position provides our sales teams with a point of focus and differentiation and a compelling platform of continued share growth into FY '25 and beyond. Moving to Slide 8. The left-hand side of this slide further highlights our strong and growing metro audience position in an important 25 to 54 demographic. However, the right-hand side highlights how this audience here is increasingly being converted during second half FY '24 to metro market revenue share, outstripping seasonal growth over the half and well positioned for the future. This improvement in metro market revenue share is in part due to the growing dominance of our audience share and in part due to a new and reinvigorated approach to our commercial structures and strategies implemented by a newly appointed sales executives in the first half of FY '24. The challenge and opportunity for our sales teams is to now close the gap between our share of listing and our fair share of revenues. SCA regional radio has unrivaled scale and reach. Boomtown represents the 9.8 million Australians living in regional Australia and the SCA owned and represent a broadcast network accounts for over 70% of the Boomtown regional radio audience. Scale is the audience that matters in regional Australia, and we have the largest and most comprehensive network of regional stations accessing 3.6 million listeners with an increase in audience of 25% over the past 5 years. Slide 10 shows the listener addressable signed up users since June 2021. We now have over 2 million signed up users with over half of them actively engaged on a monthly basis. A reminder that this has been achieved in a little over 3 years, and we continue to grow this base each and every week. We have split digital audio revenue between podcast and instream which refers to our linear radio shows and music streams. Both enjoyed robust growth in H2, but in-stream advertising was down outperformer supported by year-on-year growth of 17% in stream starts and 7% in constant listening. Importantly, our LiSTNR AdTech Hub is driving premium commercialization of digital audio and empowering our sales teams to generate improved returns from programmatic advertising. This allows us to better target advertising to relevant audiences on listener and other platforms through inclusion over 20% of digital audio advertising campaigns. The chart on Slide 11 shows the consistent impressive growth trajectory of SCA's digital audio revenues since the launch of listener only 3.5 years ago, achieving a growth trajectory of 34% CAGR since FY '20. We Pleasingly, FY '24 has seen our revenue growth accelerate further with 42% year-on-year growth and 57% growth in H2 setting up important operating momentum into FY '25. Moving to Slide 12. As I mentioned earlier and as forecast, the digital segment achieved EBITDA profitability in Q4 of FY '24. This reflects both the continued strong growth in Signed Up Users, engagement and revenue and active cost management together with disciplined capital investment in deployment of AdTech. This growth means that after just 3.5 years in market, our revenues this year are almost twice the absolute level of our nearest local competitor, and our rate of growth is also double. Put simply, SCA's listener is Australia's best digital audio business. It's the largest and fastest-growing local operator in the fastest-growing segment in Australian media and is already profitable. Moving to Slide 13. Over the last 4.5 years, we've committed to an extensive CapEx program to digitize the business. This program has included building the flexibility and resilience of our networks, enabling us to broadcast our radio content from and to any of our locations, cover live sport from anywhere in the country and to distribute our Triple M and Hit network shows to our regional and partner stations. With investment in ad tech, digitization and centralization of SCA's audio operations largely complete, our CapEx program has continued to reduce with CapEx in FY '24 or $15.8 million, down 18% from FY '23. We know that advertisers will pay a premium for the dramatically improved ROI delivered by campaigns that utilize our listener customer data platform, data analytics and dynamic delivery. With a major investment program now complete, CapEx in FY '25 will reduce further to approximately $10 million with that CapEx relating to the investment in delivering further monetizable improvements to listener, advertiser and ad tech capabilities and service infrastructure. Turning to Slide 14. Against the backdrop of significant cost pressures in FY '24, driven by high inflation and rising employment costs, I am pleased to confirm that our ongoing cost-out reset program is to continue to deliver cash savings. In H2, despite an annualized inflation rate of 3.8%, our nonrevenue-related cost growth was only 0.4% to finish FY '24 at plus 2.5% at $308.4 million, lower than our guidance of $310 million. For FY '25, NRR costs will be below FY '24. We are activating initiatives across all parts of our business to realize savings to fully offset FY '25 employment and contracted cost increases. I'll now hand you over to our CFO, Tim Young, to take you through our financial results for the year.

Thank you, John, and good morning, everyone. The next few slides set out our results for FY '24, excluding significant and other nonrecurring items. We've provided a reconciliation to reported results in an appendix to today's presentation. If you have any questions about those items, I'd be pleased to deal with those at the end of the presentation. Let's now move to Slide 16. Group revenues declined by 1% on the prior year. Strong growth in digital audio or 42%, partially mitigated falls of 1.7% in broadcast radio and 8.6% in TV. Despite inflationary pressures, strong cost disciplines limited the increase in total expenses to only 1.4% and in non-revenue-related costs to 2.5% or $7.4 million to $308.4 million. This is below our guidance of $310 million for the year. Depreciation and amortization increased by $1.9 million in FY '24, driven by accelerated depreciation of listener development investments, which were balanced by lower CapEx. Underlying FY '24 EBITDA of $66.2 million and net profit after tax of $11.2 million were both down on the prior year by $11 million and $10.8 million, respectively. However, as John noted previously, the operating and financial performance of the group improved considerably in the second half of FY '24, with the second half EBITDA up 6.1% on the prior comparable period. In FY '24, we've also recognized the statutory noncash impairment charge related to the licenses of the broadcast radio CGU of approximately $228 million after tax. This noncash charge to broadcast radio reflects the lower growth estimates for the segment and the separation of digital audio into its own operating segment for the first time in the second half of FY '24. Broadcast radio and digital audio will be separate segments and CGUs for FY '24 and beyond. Looking at our segment results, let's first turn to broadcast radio on Slide 17. Overall radio revenue decreased by 1.6% in FY '24 with the rate of decline slowing in the second half, during which revenue was down 1.1%. Metro Radio revenues declined by 2.7%. The primary driver of this decline was an industry-wide downturn in broadcast advertising revenues with the metro radio market down by over 3% for the year. The impact on SCA was reduced by the resilience of region radio and local advertisers in particular. Total cost growth was contained to 1.7%, with revenue-related costs up $2.7 million or 4%, reflecting increases in music licensing and the cost of sales. Nonrevenue-related cost growth was contained at $2 million or 1%, resulting in EBITDA of $87.2 million and a margin of 23.8% for the broadcast radio unit, 2.3 percentage points up on FY '23. Moving now to Digital on Slide 18. LiSTNR continued its strong momentum in all revenue lines. Digital revenue of $35 million was up 42% from the prior year. Total expense growth of 8.8% was due mostly to costs related to higher revenues achieved in FY '24. Nonrevenue-related costs rose by $2.6 million, largely reflecting the strategic investments in revenue-driving technology, namely the implementation of the LiSTNR customer data platform, which offset declines in marketing and other cost areas. The full year EBITDA loss has continued to narrow by 38% to $10.9 million. The second half EBITDA loss was reduced to $2.3 million, which reflects a profitable Q4 and an EBITDA improvement of $5 million compared to the second half of FY '23. The results of our television business are outlined on Slide 19. Regional television revenues continue to contract, driven especially by weakness in the national advertising market. Overall TV revenue declined by 8.7% to $97.5 million, reflecting an 11.5% drop in national revenue and a 9% decline in local revenue. The decline in overall TV revenue slowed in the second half, down 5.6% versus the prior comparable period. At the same time, tight cost controls led to total costs being reduced by 4.4% to $84.2 million, with revenue-related costs lower as a result of lower affiliation fees payable on the lower revenues. Nonrevenue-related costs increased by $1.5 million or 4% to $38.2 million, driven by the CPI linkage for our broadcast contract costs. Our TV EBITDA for FY '24 decreased by $5.4 million to $13.3 million, with the decline in EBITDA slowing in the second half, down $1 million versus the prior comparable period. We'll now move to SCA's cash flow on Slide 20. Operating cash conversion reduced to 67.2%, reflecting the reduction in net cash from operations, largely a result of the timing of customer receipts. Net CapEx was down $12.4 million to $8.9 million. The significant reduction was driven by both lower CapEx and noncore asset sales. Free cash conversion in FY '24 increased slightly to 86%, largely reflecting the reduction in net CapEx and lower dividends paid. Total dividends paid in FY '24 were $7.7 million, with the Board deciding to not declare a final dividend for FY '24 as the group prioritized reducing leverage. Net debt of $107.5 million was up slightly on the prior year, although net financing costs increased by $2.7 million due to the high-interest rate environment. Our leverage ratio of 1.87x remains well within debt covenants, and we're focusing on improving this position in FY '21. I'll now hand back to John and look forward to your questions after he's wrapped up our presentation.

Thanks, Tim. Our core strategic focus is All About Audio and to be the preeminent Audio company in Australia, led by LiSTNR, Hit and Triple M. Given this core focus and with the conclusion of recent corporate activity, we have recommenced our Strategic Review of our regional television assets. We are currently in active negotiations with several parties for the sale of our regional television licenses, and we will update the market further with material developments as and when they eventuate. Moving to Slide 23. This is an important slide as it highlights the resilience and growth of audio since 2021 with not any broadcast audience continue to hold and grow in the past year, but highlighting that digital audiences are growing at the same time. Digital audiences are complementary to broadcast audiences, which is a unique and compelling strength of audio. The result is that audio audiences are strong and growing. Radio audiences are at an all-time high with 12.2 million people listening each week to metro radio and 5.2 million people listening each week to regional radio. Time spent listening to Radio and Podcast is now approximately 16 hours per week, which is the same time spent on social media. The key takeaway here is that audio accounts for 34% of total media consumption, but only 8% of advertising spend. So, as an industry, we have the opportunity to capture the revenue share that our audiences suggest is appropriate. Slide 24 sets out expectations for FY '25. Audio revenues for Q1 are pacing ahead of the prior year, although the market remains short. Our focus on resetting our operating model cost base has and will continue to deliver meaningful cash savings, which provides us with the confidence to commit to delivering FY '25's non-revenue-related costs below FY '24 levels. Our forecast CapEx in FY '25 at approximately $10 million, combined with forecast improved cash from operations and stronger cash conversion will drive deleveraging by the end of FY '25 to below 1.5x. Digital audio momentum continues, and LiSTNR is expected to be cash flow positive in FY '25. Divestment of TV assets will be actively progressed in the coming months. Dividends to remain within policy, but towards the lower end of the target payout range in FY '25 as we prioritize deleveraging. In summary and in closing, an improvement in operating momentum in H2 makes us both excited and confident as the opportunity to improve the financial performance of the group in FY '25. The team at SCA remains focused on accelerating shareholder value through monetizing the benefits of our digitized all about audio strategy and by delivering operational efficiency through meaningful and permanent cost reductions. That concludes our presentation. As Tim mentioned earlier, the presentation includes an appendix with additional details for you to consider, including a reconciliation to our reported statutory results. Tim and I will be happy to now take any questions you may have. I'll hand back to the operator to facilitate the Q&A. Thank you. Thank you.

[Operator Instructions] And our first question will come from Darren Leung from Macquarie.

Thanks for the opportunity and your absolute results. I'd just add 2 for me, please. The first one is just on the non-revenue-related costs on the 25%. So obviously, good that you're expecting it to be lower versus 24%. But if you just kind of work through the drivers in the 25, there's obviously inflation still in the business like simplistically, I kind of assume that's about 30%. And then is it as simple as there's about $30 million of the cost out that comes out in FY '25? Or is there anything else I should be thinking about that might move to cost base in FY '25, please?

Yes, as you think you're aware, we identified cost out in '24 of about $30 million. But we've also identified further cost out down in terms of this particular year, FY '25, and we're activating them as we speak. We haven't identified the full amount. But you're right. I think cost inflation now view is about 4%. We've got a lot of contracts which have CPI-related inflators associated with that. So, what we've been able to do is particularly offset both those costs and the people costs in order to deliver below $309 million we achieved or recognized this year. So yes, more cost out is happening as we speak.

Okay. But as a start point, if your inflation is 4%, let's call it, roughly $12 million, so plus $12 million, minus $30 million and then something else throughout the rest of this year, is that kind of the major building box?

Yes. Look, I think, look, obviously, depending on what you assume for inflation, but those are the main building blocks. I mean I think the key point which I want to make here is that real costs will be down year-on-year.

Now, I understand. And just a second one because I just want to make sure I heard a comment just in relation to the sales team being added in the last few months. There's obviously been some pretty good success in terms of your revenue share that we can see on the chart. Can you talk to the sort of objectives and thought process for that team? And more specifically, how long do you think it'll take for them to bring the radio business back to a power ratio of one?

Yes, I think there's a few things there. I mean, clearly, as we outlined, we changed our sales team and our key executives led by said ready and also lent heading up our radio and metro radio team and broader teams. And we changed some of the approaches in relation to regional radio. So, I think in relation to Metro radio, as we've indicated, we put those changes in place in late December. And then since December, each and every month, the shares increased, and we continue to see those share improvements into FY '25. How long will it take in order to get a parity ratio? I'm hoping months. We expect to see a continued improvement, particularly with this new and unequivocal focus on this key audience than that is buying demographic, being that 25 to 54 demographic. I think up until probably July last year, we weren't focusing on as much as in terms of an equitable focus as we have in recent times. And we believe that the fact that 70% plus of all briefs are driven into that 25-54 demographic. We're going to see continued growth in share in the months and years to come. So, we're quite excited about share improvement.

Our next question will come from Lucy Huang from UBS.

I've just got one question on CapEx. Given that guidance comes down in FY '25, I guess how do we get comfort on future investment levels given the competitive landscape and continued investment in other digital platforms?

Yes. Thank you for the question. We have spent considerable CapEx probably in the previous 3 years, and we've highlighted the CapEx journey we've been on. I think the advantage we've got is that we are now completely centralized and digitized across our network. So that spend is complete. And we've also spent considerable dollars in recent times on building out our ad tech capability for our listener platform. That is also substantially complete. So not only have we reduced our CapEx considerably over time in line with guidance, $15 million in FY '24. FY '25, $10 million, and we expect a similar level for future years beyond that, given that we are now a fully digitized network.

And our next question will come from Brian Han from Morningstar.

John, are most of the work you're doing on cost reduction focused on the Radio division? Or is cost reduction also happening in TV?

No, most of the work is happening in radio. We did highlight -- it's almost absent TV at the moment given the announcement we've made emulation of TV today in terms of the divestment process. So yes, look, I think we're different to other companies who talk about headcount and costs being removed over time and putting targets in the market. We're just giving you an unequivocal commitment to deliver costs below FY '24, which absolutely means we continue to activate changes. And these are not things that we have to ideate and implement these are things we're activating here and now.

Okay. The strategic view you're undertaking or Regional TV, is that related to Just TV? Or are the discussions pretty fluid and could involve some parts of the water company in some form?

No, Brian, just to be clear, just involving today. Really, it's about the divestment of the key television licenses, which are currently under the auspices of both 10 and 7. We're reviewing those licenses. As you would appreciate, we were in discussions to sell some of those licenses in October before the corporate activity started last year, and we've recommenced those discussions with various parties as we've highlighted today.

Okay, great. Perhaps a question for Tim. On the radio license impairment, of the $320 million odd in carrying value of these radio licenses, how much relates to digital audio, or is there no license value attached to those digital?

No, there's -- no, it's all pertains to the broadcast assets.

[Operator Instructions] Our next question will come from Roger Colman from Pax Pasha.

I just got a few questions. One, the variable on revenue growth in the radio market in fiscal '25, what's the drop-through rate of any revenue change increase in regional versus metro and also the total package, obviously, because the revenue-related items that you disclosed are running at around about 22% and 16%. I couldn't imagine sales reps take that at larger proportion of the money, especially in the agency market.

Roger, are you talking about the commissions paid to our sales staff there.

Tons a total costs are ramping. If we got a surprise revenue rise, radio market in regional Australia and Metro Australia, bots a drop-through rate.

Look, Roger, I mean, clearly agency commissions, 5% to 6% would be sort of the general drop in terms of the additional element, that's what I'd imagine. Yes, it's clearly in regional, slightly different, but metro, I would say 5%.

Right. So, revenue rises should drop through at well over 90% rate in the metro market. Yes. Just on the sale of the TV interest, is this thing going to be negative to EPS in terms of the EBITDA multiple you sell at?

Look, clearly, we're mindful of doing the best economic deal we can, Roger, given the circumstances and given the TV market. We're not going to go into details of what it looks like, and we're still yet to finalize those negotiations with active negotiations and all I can say is we'll come back and give you the full story and the full announcement if and when we sell those assets.

Yes. The third and fourth quick ones are with respect to the restructuring costs, significant items, what's your expectation for fiscal year '24?

Yes. Look, clearly, we're doing cost activations at the moment, and we'll continue to do so throughout the year as I've mentioned previously, in order to deliver our cost below that $309 million mark. I'd say $2 million to $3 million in terms of NRI is what we anticipate at the moment in terms of those restructuring style costs.

Right. In respect to the big problem in Sydney, lots of plan to catch up with the 52-year old and the 49-year-old, the Donald Trump.

Sorry, in what regard? Sorry, could you clarify?

To find some talent to get past Carl and Jackie. They're heading towards over 50 each one of them. And you've got to be growing some sort of talent that's going to be there when they get to 55 years.

Yes. Look, clearly, we've made some changes in relation to our Sydney breakfast team in recent weeks. And we thank Hughes, Ed and Erin for the 3.5 years of both commitment and passion for the business. We're currently going through our approach simulation to what we'll put into Sydney breakfast for 2Day FM next year. Fair to say, as we've stated today, we're really focused on profitability. We're really focused on the audience as the matter being 2024 in the case of 2Day FM of them, predominantly a female audience. I think you'll see us make some changes in that regard in alignment with those thoughts and those objectives in the coming weeks and months.

Right. It affected the dividend payout ratio policy. Would it be better to move to a free cash flow percentage policy. It's not clear in the account, the $31.1 million pre-IFRS 16, I'm sorry, post-IFRS 16 give you fair buffer against the $10 CapEx projection, free cash flow.

It's actually an interesting point, Roger, which we have been discussing as a board in recent times. I think the one thing that's hopefully coming through in the results today is our focus is not so, well, it's on profits, but it's on cash flow return. With a reduction in CapEx, reduction of nonrecurring items in a negative way, focus on the realization of the drop-through as you would put it of operating cash flow and getting the highest conversion we can. That's our focus. If we can deliver cash for the business, deleverage our business and return most importantly, dividends to our shareholders, that's absolutely our absolute goal at the moment.

Right. I have one last statement, but I presume the 4 directors are listening into this. I know the company has got any that met or experience other than one that is running ACP New Zealand, and it will be handy for the executive team that's you and would have experienced directors in the field supporting when your endeavors to turn those companies at a much better performer. That's for any of those guys and women listening. Okay. Thank you.

And our next question will come from David Ambler, private investor.

I've noted with some concern that in 2020, there was a share issue made at $0.09, around about the time the market was $0.11. Now that would represent on current price yesterday, $0.53, a drop of 50% in share price at the moment. It's probably at the lowest it's been for many a long year. Why do you think the market is appraising your company so poorly?

Yes, thank you for your question, and I do appreciate your concern and why similarly and concerned. Look, in terms of our company, we, like most traditional media companies have been challenged by a very difficult market, particularly over the last 3 to 4 years. Radio in particular, was impacted by COVID, more than most media. We're seeing a return to better times. I think being a predominantly audio business, we make the point in our presentation, in our earning release today that we think that particularly broadcast radio and audio is underrepresented in relation to our share of ad spend. We make the point that we currently garner 34% of audiences in terms of attention, but only received 9% of revenue. I think everyone in the audio business believes that our CF revenue should increase, and then we'll fight for that seat. At the moment, we're underrepresented and I think we have a very collaborative audio sector, where we're all working very hard to try and improve that dynamic and trying to get a better return, and therefore, high growth rates in revenue, which should assist our company and other companies who have a focus on audio. I think all we can do now is focus on the future and hopefully, the results and the momentum we've got building into FY '25 that we've highlighted today, our control on costs, a reduction on CapEx, our focus and one critical focus on the audience that matter in terms of acquiring audiences and monetizing those, we'll provide a recipe for success in terms of improving our shareholder return and in this case, our share price.

Okay, fine. Have you considered any expense reduction by trimming your staff back?

Well, yes, we have reduced our staff significantly over the last -- like most media companies in the last 18 months in particular. And we continue to make opportunities to reduce our staff, both through churn, but we're required also, unfortunately, through redundancies. So yes, we continue to do that. And as we've made the commitment today that our costs will be below last year. And the only way they can achieve that is in part by making changes to our staff and our people in terms of the roles.

I think on the due diligence with regard to the offer, how much of that cost, please?

Around $3 million for us and alone, but I think the difficulty here is that, that's the absolute cash cost. What it's hard to sign is destruction value that it caused, particularly in the first half and our revenue shares. So, $3 million in absolute dollar terms, but I can't quantify the impact on the first half, in particular in relation to revenue loss.

Well, what concerns me about the due diligence. I feel that the advice you had was flawed. When I look at the share price reduction from the nice little lift it got when the offer was announced to where it is now. I expect that would represent a loss in value of perhaps 75%. I feel that the advice you got was flawed.

I would remind you, we didn't actually -- the consortium ended their bid anchorage, pulled out of that consortium. So, that's exactly what happened in that circumstance.

Well, I expect with the current share price, there may be a few more interested parties. Look, thanks for giving me the opportunity to share. I lost the bucket bag investing. But this is my fault, I should have bailed out that I could have but now I'm locked in, and I'm going to wait for a miracle to happen, I think. Okay. Look, thanks and best regards. And thanks for having me to chime in. Thank you.

And our next question will come from Jack Bulfin from Deep River Group.

Question is about the television business and the $1.5 million CPI broadcast infrastructure contracts. $1.5 million CPI puts the value of those infrastructure contracts around the $40 million, $42 million mark. What is that? And what is in that category? There's a second question, too, to follow. But could we deal with that one first?

Sorry, I'm not quite sure what you're referring to the television contracts that -- where are you winning this from in terms of the question? I'm just not sure I understand.

Let's go to Page 19, and there is a reference or nonrevenue-related expense.

Yes. I've just seen the note. So that's a series of contracts that's not just -- that's both transmission and playout of our TV. So, we have approximately 105 signals going across regional Australia and is the playout and transmission costs associated with those contracts.

So, if I could be sort of specific, that's the transmission is from the BAI company and the playout from another firm, is it?

Yes, from NPC. Yes, correct.

The second question is, obviously, regional television has got 2 franchises in the Southern Cross Group, the 7 which is Tas, and 10 which is regional pretty much everywhere else. Can you give us a bit of an idea of the performance of those separate franchises? In other words, which is soft, which one is providing bulk of the revenue? Is there any information you can give us there?

We don't normally break up. You're right. There are 2 main franchises. Look, I think we pretty much run in alignment with the performance of the various networks. So, the main asset we have for 7 is in Tasmania, where it's, in fact, probably the highest rating station in Australia, we do about 60% share, both in terms of revenue and audience. And the vast majority of other areas, we have the 10 network, and we pretty much run in alignment with both their revenue share and their rating shares. So, that's obviously a sub-20 sort of commercial revenue share in a sub-20 audience share. So, that's probably as best guidelines I can provide you with at this point in time.

Just to continue on that. There's one subset the other. Is that sort of how it works?

No. They're both profitable. It's just the mix of the assets combined to give the results we've provided today.

And I am showing no further questions from our phone lines. I'd now like to turn the conference back over to CEO, John Kelly for any closing remarks.

Thank you, Crystal, and thank you for everyone who's joined the call today, and thank you for all the questions we've had in the last 20 minutes. We appreciate everyone joining. We're excited about the momentum we've got going into FY '25. I look forward to speaking with many of you over the next few days. Thank you very much.

Thank you. This does conclude today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.