Full Year 2026 Southern Cross Media Group Ltd Earnings Call

August 10, 2026

Speaker #2: Thank you for standing by, and welcome to the Southern Cross Media full-year results call. All participants are in listen-only mode. There will be a presentation, followed by a question-and-answer session.

Operator 2: Thank you for standing by, and welcome to the Southern Cross Media full year results call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Rohan Lund, Managing Director and Chief Executive Officer. Please go ahead.

Operator: Thank you for standing by, and welcome to the Southern Cross Media full year results call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Rohan Lund, Managing Director and Chief Executive Officer. Please go ahead.

Speaker #2: If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Rowan Lund, Managing Director and Chief Executive Officer.

Speaker #2: Please go ahead.

Speaker #3: Good morning, everyone, and welcome to Southern Cross Media Limited's results for the 12 months to 30 June 2026. My name is Rowan Lund. I'm the MD and CEO of Southern Cross Media Group.

Rohan Lund: Good morning, everyone, and welcome to Southern Cross Media Limited's results for the 12 months to 30 June 2026. My name is Rohan Lund. I am the MD and CEO of Southern Cross Media Group. Joining me this morning is our Chief Financial Officer, Scott Butterworth. Today, we will give you an update on the full financial results of Southern Cross Media Group, provide an update on the merger of Southern Cross and Seven West Media, and give an update on current trading conditions as well as market outlook. After the presentation, we will take questions from investors and analysts. If I could take you to slide 3, which is headed Investment Overview. Southern Cross Media is Australia's leading multi-platform media business. We have unmatched reach. More than 20 million Australians every month. No other Australian media company connects with more people than us across broadcast, streaming, digital, audio, and publishing.

Speaker #3: Joining me this morning is our Chief Financial Officer, Scott Butterworth. Today, we'll give you an update on the full financial results of Southern Cross Media Group, provide an update on the merger of Southern Cross and Southern West Media, and give an update on current trading conditions as well as the market outlook.

Speaker #3: After the presentation, we'll take questions from investors and analysts. I could take you to slide 3, which is headed 'Investment Overview.' Southern Cross Media is Australia's leading multi-platform media business.

Speaker #3: We have unmatched reach—more than 20 million Australians every month. No other Australian media company connects with more people than us, across broadcast, streaming, digital, audio, and publishing.

Rohan Lund: No other Australian media company connects with more people than us across broadcast, streaming, digital, audio, and publishing. We create the content advertisers trust and audiences choose. We are the number one TV network, number one in audio for people aged 25 to 54, and the leading publisher in WA. We offer trusted live and local sport, news, and entertainment, content that resists fragmentation and AI substitution. We also carry strong social trust with initiatives such as the Channel 7 Telethon in Perth and the Good Friday Appeal for The Royal Children's Hospital Melbourne. No media company contributes more to charitable causes in this country. We have high-impact digital assets. 7plus audiences are up more than 50% and are now Australia's largest and fastest-growing BVOD service. LiSTNR revenue is now growing faster than audio broadcast revenue is declining, which is a first for us.

Speaker #3: We create the content, advertise as trusted, and audiences choose. We're the number one TV network, number one in audio for people aged 25 to 54, and the leading publisher in WA.

Rohan Lund: We create the content advertisers trust and audiences choose. We are the number one TV network, number one in audio for people aged 25 to 54, and the leading publisher in WA. We offer trusted live and local sport, news, and entertainment, content that resists fragmentation and AI substitution. We also carry strong social trust with initiatives such as the Channel 7 Telethon in Perth and the Good Friday Appeal for The Royal Children's Hospital Melbourne. No media company contributes more to charitable causes in this country. We have high-impact digital assets. 7plus audiences are up more than 50% and are now Australia's largest and fastest-growing BVOD service. LiSTNR revenue is now growing faster than audio broadcast revenue is declining, which is a first for us. The Nightly has about 3 million readers. Our group digital revenue grew 11% in FY26, which we will accelerate this year.

Speaker #3: We offer trusted, live, and local sport, news, and entertainment—content that resists fragmentation and AI substitution. We also carry strong social trust. With initiatives such as the Channel 7 Telethon in Perth and the Good Friday Appeal for the Royal Children's Hospital Melbourne, no media company contributes more to charitable causes in this country.

Speaker #3: We have high-impact digital assets. 7plus audiences are up more than 50% and are now Australia’s largest and fastest-growing BVOD service. LiSTNR’s revenue is now growing faster than audio broadcast revenue has declined, which is a first for us.

Speaker #3: The Nightly has about 3 million readers. Our group digital revenue grew 11% in FY26, which we will accelerate this year. The market opportunity is attractive.

Rohan Lund: The Nightly has about 3 million readers. Our group digital revenue grew 11% in FY26, which we will accelerate this year. The market opportunity is attractive. The Australian digital ad market is worth around AUD 25 billion, and broadcasters are still under-penetrated in it. Advertiser demand for our product is increasing, underpinned by more than 17 million first-party data records. As you will hear more about later, our financial base has been reset. We delivered AUD 30 million in synergies from the Southern Cross and Seven West Media merger earlier than expected, AUD 145 million to AUD 150 million cost our program is underway, and we now have a AUD 569 million refinance bank facility in place. If I can take you to slide 5 just to talk through key messages.

Rohan Lund: The market opportunity is attractive. The Australian digital ad market is worth around AUD 25 billion, and broadcasters are still under-penetrated in it. Advertiser demand for our product is increasing, underpinned by more than 17 million first-party data records. As you will hear more about later, our financial base has been reset. We delivered AUD 30 million in synergies from the Southern Cross and Seven West Media merger earlier than expected, AUD 145 million to AUD 150 million cost our program is underway, and we now have a AUD 569 million refinance bank facility in place. If I can take you to slide 5 just to talk through key messages. I want to cover three themes here. Number one, the business has been reset financially. Number two, we are building for growth and value. Number three, our strategy is underpinned by culture and trust. First, our results. Revenue was AUD 1.87 billion.

Speaker #3: The Australian digital ad market is worth around $25 billion, and broadcasters are still under-penetrated in it. Advertiser demand for our product has been increasing, underpinned by more than 17 million first-party data records.

Speaker #3: As you'll hear more about later, our financial base has been reset. We delivered $30 million in synergies from the Southern Cross and Southern West Media merger earlier than expected.

Speaker #3: A $145 million to $150 million cost-out program is underway, and we now have a $569 million refinanced bank facility in place. If I can take you to slide 5, just to talk through the key messages.

Speaker #3: I want to cover three themes here. Number one, the business has been reset financially. Number two, we're building for growth and value. And number three, our strategy is underpinned by culture and trust.

Rohan Lund: I want to cover three themes here. Number one, the business has been reset financially. Number two, we are building for growth and value. Number three, our strategy is underpinned by culture and trust. First, our results. Revenue was AUD 1.87 billion. EBITDA, including onerous contracts, was AUD 200 million, which was ahead of the revised guidance of AUD 185 to AUD 190 million that we provided on 11 June. We have been resetting the group's cost base to sharpen segment accountability by reducing middle management and lowering corporate overheads. We have consolidated our banking arrangements into a single facility, and we are exiting the majority of our Seven West venture businesses. Together, these steps let us stay focused on our core business.

Speaker #3: First, our results. Revenue was $1.87 billion. EBITDA, including onerous contracts, was $200 million, which was ahead of the revised guidance of $185 to $190 million.

Rohan Lund: EBITDA, including onerous contracts, was AUD 200 million, which was ahead of the revised guidance of AUD 185 to AUD 190 million that we provided on 11 June. We have been resetting the group's cost base to sharpen segment accountability by reducing middle management and lowering corporate overheads. We have consolidated our banking arrangements into a single facility, and we are exiting the majority of our Seven West venture businesses. Together, these steps let us stay focused on our core business. We have strengthened our business position across TV, audio, and publishing, and we have a clear strategy to create value by investing in trusted live and local content, by building audiences on and off our network, by connecting advertisers with audiences where they are, leveraging the scale of our combined portfolio, and rebasing our culture to increase trust. Take you to slide 6 of the presentation. Our financial results reflect difficult trading conditions but disciplined management.

Speaker #3: That we provided on 11 June. We've been resetting the group's cost base to sharpen segment accountability by reducing middle management and lowering corporate overheads. We've consolidated our banking arrangements into a single facility.

Speaker #3: And we're exiting the majority of our Southern West venture businesses. Together, these steps let us stay focused on our core business. We've strengthened our business position across TV, audio, and publishing.

Rohan Lund: We have strengthened our business position across TV, audio, and publishing, and we have a clear strategy to create value by investing in trusted live and local content, by building audiences on and off our network, by connecting advertisers with audiences where they are, leveraging the scale of our combined portfolio, and rebasing our culture to increase trust. Take you to slide 6 of the presentation. Our financial results reflect difficult trading conditions but disciplined management. Revenue was AUD 1.87 billion, down 4.4%. That reflects a AUD 125 million market contraction, which has been partly offset by AUD 41 million from share growth.

Speaker #3: And we have a clear strategy to create value: by investing in trusted, live, and local content; by building audiences on and off our network; by connecting advertisers with audiences where they are; leveraging the scale of our combined portfolio; and rebasing our culture to increase trust.

Speaker #3: Take it to slide 6 of the presentation. Our financial results reflect difficult trading conditions, but disciplined management. Revenue was $1.87 billion, down 4.4%. That reflects a $125 million market contraction.

Rohan Lund: Revenue was AUD 1.87 billion, down 4.4%. That reflects a AUD 125 million market contraction, which has been partly offset by AUD 41 million from share growth. Total expenses were AUD 1.678 billion, down 51 million or 3% due to disciplined cost management and the acceleration of the synergy savings, which we were able to deliver earlier than expected. EBITDA, including onerous contracts, was AUD 200 million, which is down 12.8%. NPAT was AUD 9.9 million, down 58%. This reflects lower operating earnings and AUD 33 million in significant items related to the merger and restructuring. Net debt was AUD 363 million, up 1.6%. We now have a new AUD 569 million cross-group syndicated facility in place, and cash flow available for debt servicing was AUD 41 million. Reported leverage was 1.8 times, up 3.3 times, but mainly reflecting lower earnings. If I can take you to slide 7, business outcomes.

Speaker #3: This has been partly offset by $41 million from share growth. Total expenses were $1.678 billion, down $51 million, or 3%, due to disciplined cost management and the acceleration of the synergy savings, which we were able to deliver earlier than expected.

Rohan Lund: Total expenses were AUD 1.678 billion, down 51 million or 3% due to disciplined cost management and the acceleration of the synergy savings, which we were able to deliver earlier than expected. EBITDA, including onerous contracts, was AUD 200 million, which is down 12.8%. NPAT was AUD 9.9 million, down 58%. This reflects lower operating earnings and AUD 33 million in significant items related to the merger and restructuring. Net debt was AUD 363 million, up 1.6%. We now have a new AUD 569 million cross-group syndicated facility in place, and cash flow available for debt servicing was AUD 41 million. Reported leverage was 1.8 times, up 3.3 times, but mainly reflecting lower earnings. If I can take you to slide 7, business outcomes.

Speaker #3: EBITDA, including onerous contracts, was $200 million, which is down 12.8%. NPAT was $9.9 million, down 58%. This reflects lower operating earnings and $33 million in significant items related to the merger and restructuring.

Speaker #3: Net debt was $363 million, up 1.6%. We now have a new $569 million cross-group syndicated facility in place. Cash flow available for debt servicing was $41 million.

Speaker #3: Reported leverage was 1.8 times, up from 1.3 times, but mainly reflecting lower earnings. If I can take you to slide 7, business outcomes. Across FY26, we held our leading positions in TV, audio, and WA publishing.

Rohan Lund: Across FY26, we held our leading positions in TV, audio, and WA publishing, and we grew share where it matters. In TV, our national audience share grew from 41.2% to 42.5%. TV ad revenue share grew from 40.4% to 41.6%. 7plus had 16.7 million registered users, up from 15.8 million in FY25. We are the number one rated TV network and the fastest-growing BVOD service. In audio, our metro 25 to 54 audience share increased from 35.2% to 36.8%. Audio ad revenue share grew from 28.3% to 30%. The number of LiSTNR registered users grew from 2.4 million to 2.7 million. Triple M is the number one for men aged 25 to 54. Hit is the number one for women aged 25 to 54. Weekly listening is 6 hours and 27 minutes, up 15 minutes.

Speaker #3: And we grew share where it matters. In TV, our national audience share grew from 41.2% to 42.5%. TV ad revenue share grew from 40.4% to 41.6%.

Speaker #3: 7plus had 16.7 million registered users, up from 15.8 million in FY25. We're the number-one rated TV network and the fastest-growing BVOD service. In Audio, our metro 25 to 54 audience share increased from 35.2% to 36.8%.

Speaker #3: Audio ad revenue share grew from 28.3% to 30%. The number of LiSTNR registered users grew from 2.4 million to 2.7 million. Triple M is the number one for men aged 25 to 54.

Speaker #3: It is the number one for women aged 25 to 54, and weekly listening is 6 hours and 27 minutes, up 15 minutes. In publishing, the West monthly audience grew from 3.2 million to 3.5 million.

Rohan Lund: In publishing, The West monthly audience grew from 3.2 million to 3.5 million, while The Nightly's digital edition opens increased from 1 million to 1.2 million. The Game Changer ad revenue grew its registered users 16% to 123,000. Take you to slide 8, combined platform. Our combined platform is powerful, and it is resonating with audiences and advertisers alike. The chart here shows our national cumulative reach by time of day, combining Southern Cross Radio and 7TV. Together, we reach more people across the day than either platform alone, with reach building strongly into the evening. Only 38% of our total audience watches Seven and listens to Southern Cross Audio. Why is this relevant? Well, here is what our advertisers tell us. 90% are likely to plan campaigns using both audio and TV in the next 6 months.

Speaker #3: While the Nightly's digital edition opens, increased from 1 million to 1.2 million. The game tipping ad revenue grew and grew its registered users 16% to 123,000.

Speaker #3: Take it to slide 8, combined platform. Our combined platform is powerful, and it's resonating with audiences and advertisers alike. The chart here shows our national cumulative reach by time of day.

Speaker #3: Combining Southern Cross Radio and Seven TV, together we reach more people across the day than either platform alone, with reach building strongly into the evening.

Speaker #3: And only 38% of our total audience watches Seven and listens to Southern Cross audio. Why is this relevant? Well, here's what our advertisers tell us.

Speaker #3: Ninety percent are likely to plan campaigns using both audio and TV in the next six months. However, 25% don't feel confident planning, running, or measuring cross-media campaigns.

Rohan Lund: 25% don't feel confident planning, running, or measuring cross-media campaigns, and 40% feel overwhelmed by the number of platforms available. Right now, only 14% of advertisers buy from both Seven and Southern Cross. That is the opportunity ahead of us. We have already had some early wins. A health insurer ran cross-promotion across Triple M and Seven's AFL properties, an AUD 1.2 million campaign. A direct bank extended its customer outreach with a joint Sunrise and LiSTNR campaign, which was an AUD 1.4 million campaign. Our combined portfolio is delivering high intent, high-value audiences for advertisers, backed by rich first-party data and digital sales technology. On slide 9, I will just talk to our strategy. Our strategy is simple. We connect Australians with what matters to them. That means playing to our strengths in appointment viewing. We create moments that capture maximum attention and rituals that keep audiences coming back.

Speaker #3: And 40% feel overwhelmed by the number of platforms available. Right now, only 14% of advertisers buy from both Seven and Southern Cross. That's the opportunity ahead of us.

Speaker #3: We've already had some early wins. A health insurer ran cross-promotion across Triple M and Seven's AFL properties—a $1.2 million campaign. A direct bank extended its customer outreach with a joint Sunrise and listener campaign.

Speaker #3: Which was a $1.4 million campaign. Our combined portfolio is delivering high-intent, high-value audiences for advertisers, backed by rich first-party data and digital sales technology.

Speaker #3: On slide 9, I'll just talk to our strategy. Our strategy is simple: we connect Australians with what matters to them. That means playing to our strengths in appointment viewing.

Speaker #3: We create moments that capture maximum attention, and rituals that keep audiences coming back. I talk internally about keeping the fire burning, and the importance of news, sport, and local content for all three businesses.

Rohan Lund: I talk internally about keeping the fire burning and the importance of news, sport, and local in our content for all three businesses. We also talk about turning headwinds into tailwinds, which we see in three steps. We meet our audiences where they are, we meet our advertisers where they are, and we reimagine the way we work to be more efficient in how we do that. Our brands are trusted, live, and local. In television, they are Seven and 7plus. In audio, Hit, LiSTNR, and Triple M. In publishing, it is The West, PerthNow, and The Nightly. All our brands are underpinned by a culture of trust. Slide 10, creating value from strategy. This slide shows how we create value from our strategy, which in part boils down to strengthening Australia through trusted media.

Speaker #3: We also talk about turning headwinds into tailwinds, which we see in three steps. We meet our audiences where they are. We meet our advertisers where they are.

Speaker #3: And we reimagine the way we work to be more efficient in how we do that. Our brands are trusted, live, and local. In television, they're Seven and 7plus.

Speaker #3: In audio, Hit, LiSTNR, and Triple M. In publishing, it's The West, Perth News, and The Nightly. All our brands are underpinned by a culture of trust.

Speaker #3: Slide 10: Creating value from strategy. This slide shows how we create value from our strategy, which in part boils down to strengthening Australia through trusted media.

Speaker #3: We bring Australians together through content they love and trust, and we turn that connection into audiences that work for advertisers. That happens in five steps.

Rohan Lund: We bring Australians together through content they love and trust, and we turn that connection into audiences that work for advertisers. That happens in five steps. We deliver the content people love, content that is trusted, live, and local: sport, news, and entertainment. We create audiences at scale across metro and regional markets on and off our networks. First-party insights or knowing who our audiences are and what they want, and advertiser solutions, one for the audience lead with proven outcomes. Every brief, be it agency or direct, will be answered with our legacy and digital assets. This is underpinned by three things: multi-platform capability and cross-promotion across Seven and 7plus, Hit, Triple M, and LiSTNR, The West and The Nightly, and using our Phoenix trading platforms and our leading data platforms, REDiQ.

Speaker #3: We deliver the content people love—content that's trusted, live, and local. Sport, news, and entertainment. We create audiences at scale across metro and regional markets, on and off our networks.

Speaker #3: First-party insights, or knowing who our audiences are and what they want. And advertiser solutions—one for the audience, lead with proven outcomes. And every brief, be it agency or direct, will be answered with our legacy and digital assets.

Speaker #3: This is underpinned by three things: multi-platform capability and cross-promotion across Seven and 7plus; Hit, Triple M, and LiSTNR; The West and The Nightly; and using our Phoenix trading platforms and our leading data platform, Red IQ.

Speaker #3: Our people, culture, and values of: do what you say, go together, put your heart into it, and get stuff done. And our financial discipline.

Rohan Lund: Our people, culture, and values of do what you say, go together, put your heart into it, and get stuff done, and our financial discipline. On slide 11, I describe the new refreshed team. Since May this year, we have changed our executive leadership team, which now consists of a highly experienced team with strong leaders who have the skills and knowledge to help us achieve our ambition. We have welcomed Angus Ross back to the business. He leads television and streaming. He has 27 years in media behind him. Before this, he was Group Managing Director of Television at Seven. John Kelly does an outstanding job leading audio. John has been in media for 28 years, and he was previously CEO of Southern Cross. Maryna Fewster does an outstanding job leading the publishing business. She brings more than 10 years in media, having joined the group from COO at iiNet.

Speaker #3: On slide 11, I describe the new refresh team. Since May this year, we've changed our executive leadership team, which now consists of a highly experienced group with strong leaders who have the skills and knowledge to help us achieve our ambitions.

Speaker #3: We've welcomed Angus Ross back to the business, who leads television and streaming. He has 27 years in media behind him. Before this, he was Group Managing Director of Television at Seven.

Speaker #3: John Kelly does an outstanding job leading Audio. John has been in media for 28 years, and he was previously CEO of Southern Cross. Raina Fuster does an outstanding job leading the Publishing business.

Rohan Lund: Maryna Fewster does an outstanding job leading the publishing business. She brings more than 10 years in media, having joined the group from COO at iiNet. On the enablement side, we have Rebecca Ackland, our Chief People and Culture Officer, who has eight years in media, all previously in that role at Southern Cross. Stephen Haddad is Chief Technology Officer with 14 years in media and previously COO at Southern Cross. Natalie Harvey, I am excited to say, will be joining us next month as Chief Revenue Officer. Natalie has had a 20-year media career, including senior sales roles at Seven, and joins us from Mamamia, where she was the CEO. Scott Butterworth, sitting next to me, is our CFO with 17 years in finance, most recently as CFO at PepsiCo.

Speaker #3: She brings more than 10 years in media, having joined the group from COO at iiNet. On the enablement side, we have Rebecca Ackland, our Chief People and Culture Officer.

Rohan Lund: On the enablement side, we have Rebecca Ackland, our Chief People and Culture Officer, who has eight years in media, all previously in that role at Southern Cross. Stephen Haddad is Chief Technology Officer with 14 years in media and previously COO at Southern Cross. Natalie Harvey, I am excited to say, will be joining us next month as Chief Revenue Officer. Natalie has had a 20-year media career, including senior sales roles at Seven, and joins us from Mamamia, where she was the CEO. Scott Butterworth, sitting next to me, is our CFO with 17 years in finance, most recently as CFO at PepsiCo. I lead the group as Managing Director and CEO. I had spent 12 years leading media businesses up to a decade ago, and most recently, I was the CEO of NRA before joining Southern Cross Media Group.

Speaker #3: Steven Haddad is Chief Technology Officer, with 14 years in media and previously COO at Southern Cross. Another team member has 8 years in media, all previously in that role at Southern Cross.

Speaker #3: Natalie Harvey, I'm excited to say, will be joining us next month as Chief Revenue Officer. Natalie has had a 20-year media career, including senior sales roles at Seven.

Speaker #3: And joins us from Mamma Mia, where she was the CEO. And Scott Butterworth, sitting next to me, is our CFO with 17 years in finance, most recently as CFO at PEXA.

Speaker #3: I lead the group as Managing Director and CEO. I had spent 12 years leading media businesses up to a decade ago, and most recently, I was the CEO of NRMA before joining Southern Cross Media Group.

Rohan Lund: I lead the group as Managing Director and CEO. I had spent 12 years leading media businesses up to a decade ago, and most recently, I was the CEO of NRA before joining Southern Cross Media Group. I will now hand over to Scott to take you through the financial results in more detail.

Speaker #3: I'll now hand over to Scott to take you through the financial results in more detail.

Rohan Lund: I will now hand over to Scott to take you through the financial results in more detail.

Speaker #2: Thanks, Rowan. I'll now take you through the results in three parts: the group earnings and what moved them, and an overview of how each of the three businesses performed.

Scott Butterworth: Thanks, Rohan. I will now take you through the results in three parts: the group earnings and what moved them, an overview of how each of the three businesses performed, and then separately, the balance sheet, cash flow, and debt position. One note on the basis of presentation before I start. Everything in this section is shown on a pro forma basis, as though SCA and Seven West Media had been combined for the whole of FY26 and the whole of FY25. The statutory result and the reconciliation between that and the pro forma view are contained in the appendix. I will start with slide 13, which sets out the group result. As Rohan has already noted, FY26 was a difficult year for advertising markets, with total TV advertising down 9.9% and total metro audio advertising down 6.8% on fiscal 2025.

Speaker #2: And then separately, the balance sheet, cash flow, and debt position. One note on the basis of presentation before I start: everything in this section is shown on a pro forma basis.

Speaker #2: As though SCA and Seven West Media had been combined for the whole of FY26 and the whole of FY25. The statutory result and the reconciliation between that and the pro forma view are contained in the appendix.

Speaker #2: I'll start with slide 13, which sets out the group result. As Rowan has already noted, FY26 was a difficult year for advertising markets, with total TV advertising down 9.9% and total Metro audio advertising down 6.8% on fiscal 25.

Speaker #2: Given this backdrop, group revenue was $1.87 billion, down 4.4% on fiscal '25. This largely reflects the tough markets in TV and audio advertising, particularly in the legacy segments.

Scott Butterworth: Given this backdrop, group revenue was AUD 1.87 billion, down 4.4% on FY25. This largely reflects the tough markets in TV and audio advertising, particularly in the legacy segments, partly offset by share gains and supported by digital revenue growth. Revenue-related expenses fell by 5%. That is slightly faster than the 4.8% decline in advertising revenue, mainly reflecting tight commission management in the TV segment. Operating costs fell by 2.6%, helped by merger synergies, general spend control, and commercial broadcasting tax relief. Reflecting the impact of subdued market conditions on our operating leverage, EBITDA before the onerous contract provision release was AUD 191.9 million, down 15.8% at a margin of 10.3%. Including the positive impact of onerous provision releases, EBITDA was AUD 200 million. Below EBITDA, three items are worth calling out. Depreciation and amortization expense rose AUD 15.7 million to AUD 88.3 million.

Speaker #2: Partly offset by share gains and supported by digital revenue growth. Revenue-related expenses fell by 5%, which is slightly faster than the 4.8% decline in advertising revenue, mainly reflecting tight commission management in the TV segment.

Speaker #2: Operating costs fell by 2.6%, helped by our merger synergies, general spend control, and commercial broadcasting tax relief. This reflects the impact of subdued market conditions on our operating leverage.

Speaker #2: EBITDA before the owner's contract provision release was $191.9 million, down 15.8%, at a margin of 10.3%. Including the positive impact of owner's provision releases, EBITDA was $200 million.

Speaker #2: Below EBITDA, three items are worth calling out. Depreciation and amortization expense rose $15.7 million to $88.3 million. About $24 million of the movement is due to the resetting of asset values upon the acquisition of SWM by SCA.

Scott Butterworth: About AUD 24 million of the movement is due to the resetting of asset values upon the acquisition of SWM by SCA. This was partly offset by changes to the estimated useful life of the LiSTNR assets and lower CapEx. Notwithstanding these dynamics, we expect D&A to trend down in FY27 as the effects of acquisition accounting wash through. The effective tax rate fell from 26.7% in FY25 to 22.6% in FY26. This is primarily due to the impact of Home and Away-related producer offset rebates recognized during the year. Significant items are AUD 32.9 million after tax, were down by about a third on the prior year. The prior year included investment revaluations. This year, the main items relate to merger transaction fees and restructuring costs.

Speaker #2: This was partly offset by changes to the estimated useful life of the LiSTNR assets and lower capex. Notwithstanding these dynamics, we expect DNA to trend down in FY27 as the effects of acquisition accounting wash through.

Speaker #2: The effective tax rate fell from 26.7% in FY25 to 22.6% in FY26. This was primarily due to the impact of Home and Away related producer offset rebates recognized during the year.

Speaker #2: Significant items at $32.9 million after tax were down by about a third on the prior year. The prior year included investment revaluations. This year, the main items relate to merger transaction fees and restructuring costs.

Speaker #2: The overall effect of these movements is that NPAT for the year was $9.9 million, compared to $23.3 million in the prior year.

Scott Butterworth: The overall effect of these movements is that NPAT for the year was AUD 9.9 million, compared to AUD 23.3 million in the prior year. I will turn now to slide 14 to explain the revenue movements for the year. This chart is the whole revenue story on one page. We started the year at AUD 1.956 billion and finished at AUD 1.87 billion. I will take you through the major movements. Declines in the advertising market took about AUD 125 million out of the top line. AUD 116 million of that in television, where the market was down 9.9%, with the balance across audio, where the metro market was down 6.8%. Publishing was also impacted by the soft conditions. Overall, the market outcome reflects economic weakness and the runoff in prior year federal election activity. Against that, share growth gave us back AUD 41 million.

Speaker #2: I'll turn now to slide 14 to explain the revenue movements for the year. This chart is the whole revenue story on one page. We started the year at $1.956 billion.

Speaker #2: And finished at $1.87 billion. I'll take you through the major movements. Declines in the advertising market took about $125 million out of the top line.

Speaker #2: $116 million of that was in television, where the market was down 9.9%, with the balance across audio, where the Metro market was down 6.8%.

Speaker #2: Publishing was also impacted by the soft conditions. Overall, the market outcome reflects economic weakness and the runoff in prior-year federal election activity. Against that, share growth gave us back $41 million.

Speaker #2: Total TV revenue shares were up 1.2 percentage points to 41.6%, driven by our strong ratings performance in sport, morning, news, and our 10 pole programs.

Scott Butterworth: Total TV revenue share was up 1.2 percentage points to 41.6%, driven by our strong ratings performance in sport, morning, news, and our tentpole programs. Metro audio revenue share was up 1.7 percentage points to 30%, reflecting ongoing improvements to our programming mix and talent roster. Underneath all of this, digital revenue grew 10.7% to AUD 320.3 million. That growth is what is progressively changing the shape of our top line. I will turn now to a discussion of operating expenses on slide 15. Group operating costs came down 2.6% to AUD 1.423 billion. Two things pulled costs down and two pushed them up. First down, cost improvements. Merger synergies delivered AUD 22 million in the year. The full AUD 30 million annualized benefit is now in place, a year ahead of the schedule we set at the time of the merger.

Speaker #2: Metro audience metro audio revenue share was up 1.7 percentage points to 30%, reflecting ongoing improvements to our programming mix and talent roster. Underneath all of this, digital revenue grew 10.7% to $320.3 million.

Speaker #2: That growth is what is progressively changing the shape of our top line. I'll turn now to discussion of operating expenses on slide 15. Group operating costs came down 2.6% to $1.423 billion.

Speaker #2: Two things pulled costs down, and two pushed them up. First, down: cost improvements. Merger synergies delivered $22 million in the year. The full $30 million annualized benefit is now in place.

Speaker #2: A year ahead of the schedule we set at the time of the merger. Separately, other cost actions delivered $50 million, driven by content cost reductions, removing duplication, and operating model changes.

Scott Butterworth: Separately, other cost actions delivered AUD 50 million, driven by content cost reductions, removing duplication, and operating model changes. Second, we also benefited by AUD 15 million relative to FY25 due to relief from commercial broadcasting tax payments. Working the other way, contracted cost growth added AUD 21 million. Most of that is due to a step-up in AFL fees with the growth. Lastly, AUD 30 million of cost increases was due to the impacts of inflation on personnel, content, and other operating costs. Given these dynamics in the cost base, our ongoing expense reduction work remains of significant importance to the company. I want to say more about that as I turn to slide 16.

Speaker #2: Second, we also benefited by $15 million relative to fiscal '25 due to relief from commercial broadcasting tax payments. Working the other way, contracted cost growth added $21 million.

Speaker #2: Most of that is due to a step-up in AFL fees, with the growth in future payments to be in line with inflation. Lastly, $30 million of cost increases was due to the impacts of inflation on personnel, content, and other operating costs.

Speaker #2: Given these dynamics in the cost base, our ongoing expense reduction work remains of significant importance to the company. I want to say more about that as I turn to slide 16.

Speaker #2: Our cost reduction program redesigns the group around three businesses, with clearer accountabilities and less middle management and corporate overhead. We are using group-wide scale and procurement to remove duplication.

Scott Butterworth: Our cost reduction program redesigns the group around three businesses with clearer accountabilities, with less middle management and corporate overhead, using group-wide scale and procurement, and to remove duplication, and redesigning the work itself through process change, automation, and the like. It will be substantially delivered by the end of FY27, and progress to date is in line with our expectations. Around 250 people, roughly 88% of the workforce, left the business during FY26, and we are already making headway with important non-labor savings in areas such as content and corporate costs, such as insurance. As previously announced, we expect the program, when complete, to deliver AUD 145 to AUD 150 million of annualized savings. That figure includes AUD 30 million of merger synergies already delivered. I will turn now to slide 17 to summarize the performance of our three operating businesses.

Speaker #2: And redesigning the work itself through process change, automation, and the like. It will be substantially delivered by the end of fiscal ’27, and progress to date is in line with our expectations.

Speaker #2: Around 250 people, roughly 8% of the workforce, left the business during FY26. We are also making headway with important non-labor savings in areas such as content and corporate costs, including insurance.

Speaker #2: As previously announced, we expect the program, when complete, to deliver $145 to $150 million of annualized savings. That figure includes the $30 million of merger synergies already delivered.

Speaker #2: I'll turn now to slide 17 to summarize the performance of our three operating businesses. If you want further information, you will be able to find it in the appendix to these slides.

Scott Butterworth: If you want further information, you will be able to find it in the appendix to these slides. Television suffered the most from the decline in the market during the year. However, while the market was down 9.9%, TV's revenue decline was restricted to 6.6%, reflecting a record 42.5% audience share in a non-Olympics year, and revenue share up 1.2 percentage points to 41.6%. Additional support was provided to the revenue line by digital, which grew at 10.6%. Pleasingly, 7plus became Australia's fastest-growing BVOD service during the year, reflecting a full-year benefit of AFL programming on the platform. Partly offsetting the revenue decline was strong expense management, with revenue-related costs down 8.4% and operating costs coming in 2.2% lower. Audio had a very strong year, notwithstanding the metro advertising market being down 6.8%.

Speaker #2: Television suffered the most from the decline in the market during the year. However, while the market was down 9.9%, TV's revenue decline was restricted to 6.6%.

Speaker #2: Reflecting a record 42.5% audience share in a non-Olympics year. And revenue share up 1.2 percentage points to 41.6%. Additional support was provided to the revenue line by digital, which grew at 10.6%.

Speaker #2: Pleasingly, 7plus became Australia's fastest-growing BVOD service during the year, reflecting a full year benefit of AFL programming on the platform. Partly offsetting the revenue decline was strong expense management, with revenue-related costs down 8.4%.

Speaker #2: And operating costs coming in 2.2% lower. Audio had a very strong year, notwithstanding the metro advertising market being down 6.8%.

Speaker #2: Overall, revenue was up 1.9%, with Metro share up 1.7 percentage points, and local revenue growing 3.2%. Albeit, the national/regional segment did decline sharply, as national advertisers pulled back on spend in the regions.

Scott Butterworth: Overall revenue was up 1.9%, with metro share up 1.7 percentage points and local revenue growing 3.2%, albeit the national regional segment did decline sharply as national advertisers pulled back on spend in the regions. The number I draw your attention to is digital. Audio digital revenue grew 14.3%, and for the first time, its growth has more than offset the decline in broadcast. That crossover is the thing we have been building LiSTNR for. From an expense point of view, revenue-related expenses grew, representing increased ad sales and revised contract arrangements. Good operating expense discipline continued as the business drove a wide range of labor and discretionary expense reduction initiatives. Publishing EBITDA was held to a decline of 2.4% despite soft conditions. Revenue of AUD 187 million was down 3.1% due to lower advertising, with circulation and subscription revenue held flat.

Speaker #2: The number I draw your attention to is digital. Audio digital revenue grew 14.3%, and for the first time, its growth has more than offset the decline in broadcast.

Speaker #2: That crossover is the thing we have been building listener for. From an expense point of view, revenue-related expenses grew, representing increased ad sales.

Speaker #2: And revised contract arrangements. Good operating expense discipline continued as the business drove a wide range of labor and discretionary expense reduction initiatives. Publishing EBITDA was held to a decline of 2.4%, despite soft conditions.

Speaker #2: Revenue of $187 million was down 3.1% due to lower advertising, with circulation and subscription revenue held flat. Included in the revenue line are digital revenues, which increased 5.7% to $27.9 million.

Scott Butterworth: Included in the revenue line are digital revenues, which increased 5.7% to AUD 27.9 million. Operating costs were down 3.2% through efficiency initiatives targeting personnel and printing costs. I will turn now to cash and debt. Moving to slide 19, cash generation was down this year, with several reasons for this movement. First, cash flow available for debt servicing fell to AUD 41 million, against AUD 86.8 million last year. This was due to lower EBITDA and a cash conversion ratio of 71%, which was down from 85% in FY25. That decline partly reflected non-cash items such as the owner's contract provision release included in the reported EBITDA number. Working capital usage was also higher than in the previous year's period, with most of the increase representing the unwind of leave provisions as people left the business.

Speaker #2: Operating costs were down 3.2% through efficiency initiatives targeting personnel and printing costs. I'll turn now to cash and debt. Moving to slide 19, cash generation was down this year, with several reasons for this movement.

Speaker #2: First, cash flow available for debt servicing fell to $41 million, down from $86.8 million last year. This was due to lower EBITDA and a cash conversion ratio of 71.7%, which was down from 85% in FY25.

Speaker #2: That decline partly reflected non-cash items, such as the onerous contract provision release, included in the reported EBITDA number. Working capital usage was also higher than in the previous period, with most of the increase representing the unwind of leave provisions as people left the business.

Speaker #2: Partly offsetting this, CapEx fell 22.5% due to the runoff in prior-year property and technology projects. Lease payments also fell 11.3% as we compressed property usage.

Scott Butterworth: Partly offsetting this, CapEx fell 22.5% due to the runoff in prior year property and technology projects. Lease payments also fell 11.3% as we compressed property usage. Second, whilst financing costs were down in the year because of lower interest rates, we did incur AUD 22 million of merger-related transaction fees. SCA also paid a dividend during the H1 of 2026, but this was largely offset by the effect of the sale of ventures assets by SWM. Overall, the cash movement, excluding debt drawdowns, was negative AUD 5.7 million during the year, and net debt finished at AUD 362.8 million. Given the year we have had, a merger completed, a restructuring underway, and AUD 22 million of transaction costs paid, holding net debt broadly flat represents a not unreasonable outcome, albeit one that we are keen to turn around. Let me now turn to slide 20, which provides information on the group's debt structure.

Speaker #2: Second, whilst financing costs were down in the year because of lower interest rates, we did incur $22 million of merger-related transaction fees.

Speaker #2: SCA also paid a dividend during the first half of '26, but this was largely offset by the effect of the sale of Ventures assets by SWM.

Speaker #2: Overall, the cash movement excluding debt drawdowns was negative 5.7 million dollars during the year. And net debt finished at 362.8 million dollars. Given the year we've had, a merger completed, a restructuring underway, and 22 million dollars of transaction costs paid, holding net debt broadly flat represents a not unreasonable outcome, albeit one that we are keen to turn around.

Speaker #2: Let me now turn to slide 20, which provides information on the Group's debt structure. The Group ended the year at a reported leverage of 1.8 times.

Scott Butterworth: Let me now turn to slide 20, which provides information on the group's debt structure. Group ended the year at a reported leverage of 1.8 times and interest cover at 7.1 times. Both movements relative to fiscal 2025 are earnings-driven rather than debt-driven. The more important development on this page is the refinancing. We have replaced the separate SCA and Seven West Media facilities with a single group-wide syndicated facility of AUD 569 million, arranged by ANZ, Commonwealth Bank, and Westpac. Doing that, we reduced total syndicated commitments by AUD 116 million and increased short-term facilities by AUD 15 million to AUD 60 million. We have taken cost out while improving day-to-day flexibility. The facility is split across three and four-year tranches. Existing FY28 maturities have been pushed out, and there are now no syndicated maturities until the end of July 2029.

Scott Butterworth: Group ended the year at a reported leverage of 1.8 times and interest cover at 7.1 times. Both movements relative to fiscal 2025 are earnings-driven rather than debt-driven. The more important development on this page is the refinancing. We have replaced the separate SCA and Seven West Media facilities with a single group-wide syndicated facility of AUD 569 million, arranged by ANZ, Commonwealth Bank, and Westpac. Doing that, we reduced total syndicated commitments by AUD 116 million and increased short-term facilities by AUD 15 million to AUD 60 million. We have taken cost out while improving day-to-day flexibility. The facility is split across three and four-year tranches. Existing FY28 maturities have been pushed out, and there are now no syndicated maturities until the end of July 2029. Covenants are unchanged from previous Seven West Media facilities. Net leverage below 3.25 times, and interest cover above three times.

Speaker #2: And interest cover at 7.1 times. Both movements relative to fiscal '25 are earnings-driven rather than debt-driven. The more important development on this page is the refinancing.

Speaker #2: We've replaced the separate SCA and Seven West Media facilities with a single group-wide syndicated facility of $569 million, arranged by ANZ, Commonwealth Bank, and Westpac.

Speaker #2: In doing that, we reduced total syndicated commitments by $116 million and increased short-term facilities by $15 million to $60 million. So we've taken costs out while improving day-to-day flexibility.

Speaker #2: The facility is split across three- and four-year tranches. Existing FY28 maturities have been pushed out, and there are now no syndicated maturities until the end of July '29.

Speaker #2: Covenants are unchanged from the previous Seven West Media facilities: net leverage below 3.25 times and interest cover above three times. At 1.8 times and 7.1 times, we have good headroom against both.

Scott Butterworth: Covenants are unchanged from previous Seven West Media facilities. Net leverage below 3.25 times, and interest cover above three times. At 1.8 times and 7.1 times, we have good headroom against both. That completes the financial section. Fiscal 2026 was defined by market declines in legacy channels, partly offset by share gains and digital growth and cost discipline. That sets the frame for FY27. I will now hand back to Rohan to review our priorities for next year and to summarize the outlook.

Scott Butterworth: At 1.8 times and 7.1 times, we have good headroom against both. That completes the financial section. Fiscal 2026 was defined by market declines in legacy channels, partly offset by share gains and digital growth and cost discipline. That sets the frame for FY27. I will now hand back to Rohan to review our priorities for next year and to summarize the outlook.

Speaker #2: That completes the financial section. Fiscal '26 was defined by market declines in legacy channels, partly offset by share gains and digital growth, and cost discipline.

Speaker #2: That sets the frame for FY27. I'll now hand back to Rowan to review our priorities for next year and to summarize the outlook.

Speaker #1: Thanks, Scott. I'll now talk through the FY27 priorities, and I'll provide a trading update. We have five clear priorities for FY27, and they're completely in line with the strategy I described earlier.

Rohan Lund: Thanks, Scott. I will now talk through the FY27 priorities, and I will provide a trading update. We have five clear priorities for FY27, and they are completely in line with the strategy I described earlier. The first is playing to our strengths in trusted, live, and local content. Second, we want to meet our audiences where they are. We want to maintain and build on the gains we made in FY26 and push our engagement further, off-platform into different formats and across brands. Thirdly, for our advertisers. We are embedding our total TV and total audio propositions with digital at the core and building on our digital publishing offers, turning our first-party data into a real product and converting advertisers who work with just one of our platforms today into multi-platform partners. This also means capturing the full value of our content from platforms that take advantage of it without appropriate compensation.

Speaker #1: The first is playing to our strengths in trusted live and local content. Second, we want to meet our audiences where they are. We want to maintain and build on the gains we made in FY26, and push our engagement further—off-platform, into different formats and across brands.

Speaker #1: Thirdly, for our advertisers, we're embedding our Total TV and Total Audio propositions, with digital at the core and building on our digital publishing offers.

Speaker #1: Turning our first-party data into a real product and converting advertisers who work with just one of our platforms today into multi-platform partners. This also means capturing the full value of our content from platforms that take advantage of it without appropriate compensation.

Rohan Lund: This also means capturing the full value of our content from platforms that take advantage of it without appropriate compensation. Fourth, is reimagining our ways of working. That means delivering on the AUD 150 million cost reduction program we have already set out and changing the way we work across all of our businesses so we can be leaner and more agile. And fifth, reputation and engagement. We are focused on building trust with our audiences, with our advertisers, our people, and our partners, and strengthening a culture built around shared values and working together as one business. If I can take you to slide 23, which is for trading and outlook. Television revenue is tracking roughly flat year on year, and pleasingly, July is slightly up, which is a positive way to enter the year.

Speaker #1: Fourth is reimagining our ways of working. That means delivering on the $150 million cost reduction program we've already set out, and changing the way we work across all of our businesses so we can be leaner and more agile.

Rohan Lund: Fourth, is reimagining our ways of working. That means delivering on the AUD 150 million cost reduction program we have already set out and changing the way we work across all of our businesses so we can be leaner and more agile. And fifth, reputation and engagement. We are focused on building trust with our audiences, with our advertisers, our people, and our partners, and strengthening a culture built around shared values and working together as one business. If I can take you to slide 23, which is for trading and outlook. Television revenue is tracking roughly flat year on year, and pleasingly, July is slightly up, which is a positive way to enter the year. The market itself, we understand, is down mid-single digits. But we have been offsetting that with stronger share gains again, and with help from a very successful Commonwealth Games.

Speaker #1: And fifth, reputation and engagement. We're focused on building trust with our audiences, with our advertisers, our people, and our partners, and strengthening a culture built around shared values and working together as one business.

Speaker #1: I can take you to slide 23, which is the trading and outlook. Television revenue is tracking roughly flat year-on-year, and pleasingly, July is slightly up, which is a positive way to enter the year.

Speaker #1: The market itself, we understand, is down mid-single digits, but we've been offsetting that with stronger share gains again, and with help from a very successful Commonwealth Games.

Rohan Lund: The market itself, we understand, is down mid-single digits. But we have been offsetting that with stronger share gains again, and with help from a very successful Commonwealth Games. Audio revenue in the first quarter is tracking up low single digits, and publishing revenue is also holding steady year on year. It has been a very strong start in July. More broadly, the advertising market is still short and volatile, and sentiment amongst consumers and advertisers is mixed. On cost, the program is on track. We expect total operating expenses to grow below inflation, and our cost-out actions are tracking to plan for delivery in FY27. We are expecting some one-off costs from major sport events this year, and that is recently concluded Glasgow Commonwealth Games and the Rugby League World Cup in October and November.

Speaker #1: Audio revenue in the first quarter is tracking up low single digits, and publishing revenue is also holding steady year on year. It's been a very strong start in July.

Rohan Lund: Audio revenue in the first quarter is tracking up low single digits, and publishing revenue is also holding steady year on year. It has been a very strong start in July. More broadly, the advertising market is still short and volatile, and sentiment amongst consumers and advertisers is mixed. On cost, the program is on track. We expect total operating expenses to grow below inflation, and our cost-out actions are tracking to plan for delivery in FY27. We are expecting some one-off costs from major sport events this year, and that is recently concluded Glasgow Commonwealth Games and the Rugby League World Cup in October and November. The full benefit of the cost-out program will flow through in FY28. Trust comes from doing what you say you will do and consistently delivering. We intend to earn your trust this year. That concludes the presentation.

Speaker #1: More broadly, the advertising market is still short and volatile, and sentiment among consumers and advertisers is mixed. On costs, the program is on track.

Speaker #1: We expect total operating expenses to grow below inflation, and our cost-out actions are tracking to plan for delivery in FY27. We're expecting some one-off costs from major sport events this year.

Speaker #1: And that includes the recently concluded Glasgow Commonwealth Games and the Rugby League World Cup in October and November. The full benefit of the cost-out program will flow through in FY28.

Rohan Lund: The full benefit of the cost-out program will flow through in FY28. Trust comes from doing what you say you will do and consistently delivering. We intend to earn your trust this year. That concludes the presentation. Thank you for joining us this morning, but now very happy to take any questions from investors and analysts.

Speaker #1: Trust comes from doing what you say you'll do and consistently delivering. We intend to earn your trust this year. That concludes the presentation. Thank you for joining us this morning.

Rohan Lund: Thank you for joining us this morning, but now very happy to take any questions from investors and analysts.

Speaker #1: But now, very happy to take any questions from investors and analysts.

Speaker #3: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two.

Operator 2: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Annie Zhu with Barrenjoey. Please go ahead.

Operator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Annie Zhu with Barrenjoey. Please go ahead.

Speaker #3: If you're on speakerphone, please pick up the handset to ask your question. Your first question comes from Annie Zhu with Baron Joey. Please go ahead.

Speaker #4: Good morning, Rowan and Scott. Thanks a lot for taking my question. I just have three, if that's okay. Firstly, on the TV segment: the dollar margin declined year-on-year from about 12% in the PCP to 9% this year.

Annie Zhu: Good morning, Rohan and Scott. Thanks for taking my question. I just have three, if that is okay. Firstly, on the TV segment, so EBITDA margin declined year-on-year from about 12% in the PCP to 9% this year, despite having those benefits from the cost-out program. Can you just talk through that? Also just looking forward, can we expect margins to improve with the further cost-out benefits? That is my first question.

Speaker #4: Despite having those benefits from the cost-out program, can you just talk through that? And also, just looking forward, can we expect margins to improve with the further cost-out benefits?

Speaker #4: That's my first question.

Speaker #1: Right. Thanks, Annie. And thanks for your question. Maybe, Rowan, if I provide a few perspectives to that. The margin contraction this year is reflective of the operating leverage in the TV business.

Scott Butterworth: Thanks, Annie, and thanks for your question. Maybe, Rohan, if I provide a few perspectives to that. The margin contraction this year is reflective of the operating leverage in the TV business. Put simply, the cost reductions that we were able to push through the business were not able to outrun the effect of operating leverage on the margins. In relation to next year, I do not want to provide forecasts about each of the businesses, and that is largely because the revenue, as Rohan was saying, is actually quite short and volatile in the advertising market at the moment, so it is difficult for me to provide a perspective on how that will play out over the full fiscal year. In relation to costs, at an overall level for the group, we expect cost inflation to be well below the general level of inflation in the economy.

Speaker #1: Put simply, the cost reductions that we were able to push through the business weren't able to outrun the effect of operating leverage on the margins.

Speaker #1: In relation to next year, I don't want to provide forecasts about each of the businesses, and that's largely because the revenue, as Rowan was saying, is actually quite short and volatile in the advertising market at the moment.

Speaker #1: So it's difficult for me to provide a perspective on how that will play out over the full fiscal year. In relation to costs, at an overall level for the Group, we expect cost inflation to be well below the general level of inflation in the economy.

Scott Butterworth: A large amount of those cost reductions, which are underpinning that position, come through TV because that is the largest part of our cost base.

Speaker #1: A large amount of those cost reductions, which are underpinning that position, come through TV because that's the largest part of our cost base.

Speaker #4: Thanks very much. I was just going to ask about digital as well. So, digital revenue growth was quite strong—double-digit for both TV and audio.

Annie Zhu: Thanks very much. I was just going to ask on digital as well. Digital revenue growth was quite strong, double digit for both TV and audio. I understand ad markets are uncertain, as you mentioned, but are you able to talk in broad terms about the outlook for digital and whether that's expected to accelerate versus the FY26 performance?

Speaker #4: I understand ad markets are uncertain, as you mentioned, but could you talk in broad terms about the outlook for digital, and whether that's expected to accelerate versus the FY26 performance?

Speaker #1: Yes, Annie. It's Rowan here. No, my aim is to accelerate digital through this year, certainly with the type of content that we're pushing through the platforms on the TV side.

Rohan Lund: Fanny, it's Rohan here. My aim is to accelerate digital through this year. Certainly, with the type of content that we're pushing through the platforms on the TV side, but also with the growth in LiSTNR and what we're seeing in publishing. I feel at the moment that we're certainly, we're seeing much stronger audiences coming through our platforms. I mentioned that, 7plus asset was the fastest-growing BVOD last year, but we're seeing that continue to pick up at the moment. Like you indicated, it's a pretty big digital prize out there. It's a AUD 25 billion digital market, and at the moment, we're not even scratching that. But we've got the largest BVOD service in the market. We've got this fantastic platform with LiSTNR and some fantastic digital publishing platforms that are all growing ahead of market. So we think the opportunity is very real.

Speaker #1: But also, with the growth in listener numbers and what we're seeing in publishing, I feel at the moment that we're certainly, you know, seeing much stronger audiences coming through our platforms.

Speaker #1: I mentioned that, you know, 7plus Asset was the fastest-growing BVOD last year, but we're seeing that continue to pick up at the moment.

Speaker #1: And, you know, like you indicated, it's a pretty big digital prize out there. It's a $25 billion digital market. And at the moment, you know, we're not even scratching that.

Speaker #1: But we've got the largest BVOD service in the market. We've got this fantastic platform with LiSTNR, and some fantastic digital publishing platforms that are all growing ahead of the market.

Speaker #1: So, we think the opportunity is very real.

Speaker #4: Okay, got it. And on the 250 FTE departing, are you able to roughly quantify the benefit from this, or give some color on how significant it is as part of the incremental $115 to $120 million of the cost-out program?

Annie Zhu: Okay, got it. On the 250 FTE departing, are you able to roughly quantify the benefit from this or give some color on how significant it is as part of the incremental AUD 115 to AUD 120 of the cost out program that's left? Is there any further departures expected for FY27? Just noting that back in June, you called out 250 to 300.

Speaker #4: That's left. And is there any further departures expected for FY27? Just noting that, back in June, you called out 250 to 300.

Speaker #1: Yeah, I'll have Scott take the first one on the numbers, and then I'll make a comment about going forward.

Rohan Lund: Yeah, Scott will take the first on the numbers, and I'll make a comment about, going forward.

Speaker #2: Thanks, Annie. 250 folks have already left the business, and they left by the end of 30 June. So they're encapsulated in the run rate of $145 to $150 million of savings.

Scott Butterworth: Thanks, Annie. 250 folks have already left the business, and they left by the end of 30 June. So they are encapsulated in the run rate, AUD 145 to AUD 150 million of savings. Not all of the savings, though, are to do with labor costs. There is a reasonable portion of that to do with content purchasing efficiency. Then also some efficiencies in our corporate use of non-labor costs, largely through better procurement scale. So there are still personnel costs, which Rohan will talk about in a moment. As we go through the course of this year, a lot of our focus is actually on driving efficiencies in the non-labor line as well.

Speaker #2: Not all of the savings, though, are to do with labor costs. There is a reasonable portion of that related to content purchasing efficiency.

Speaker #2: And then also some efficiencies in our corporate use of non-labor costs, largely through better procurement scale. So there's still personnel costs, which Rowan will talk about in a moment.

Speaker #2: But as we go through the course of this year, a lot of our focus is actually on driving efficiencies in the non-labor line as well.

Speaker #1: And Annie, I called out quite deliberately that one of my priorities, and really part of the strategy for the group, is reimagining the way we work.

Rohan Lund: Annie, I called out quite deliberately that one of my priorities and really a part of the strategy for the group is reimagining the way we work. We know we have to be more efficient in delivering the audiences and delivering for advertisers. So like all businesses, we will continue to focus on costs. That will mean looking at middle management, looking at corporate costs, looking across the group that if there is a better way to do something, we will find it. It is a major focus across everything we are doing in the group, and we certainly do not see the cost-out program as the end of our efforts in terms of looking at our cost base.

Speaker #1: We know we have to be more efficient in delivering for audiences and delivering for advertisers. So, like all businesses, we'll continue to focus on costs.

Speaker #1: That will mean looking at middle management, looking at corporate costs, and looking across the group. If there's a better way to do something, we'll find it.

Speaker #1: It's a major focus across everything we're doing in the group, and we certainly don't see the cost-out program as the end of our efforts in terms of looking at our cost base.

Speaker #4: Thank you very much.

Annie Zhu: Thank you very much.

Speaker #3: Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced.

Operator 2: Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Elsa Li with UBS. Please go ahead.

Operator: Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Elsa Li with UBS. Please go ahead.

Speaker #3: Your next question comes from Elsa Lee with UBS. Please go ahead.

Speaker #4: Morning, Rowan, and morning, Scott. I've got two questions. Firstly, as you think about FY27, are there any revenue streams adjacent to advertising where you could win?

Elsa Li: Morning, Rohan, and morning, Scott. I have got two questions. Firstly, as you think about FY27, are there any revenue streams adjacent to advertising where you could win? I guess you spoke to first-party data today. Can you leverage some of that to create maybe a recurring revenue stream less correlated with the ad cycle?

Ailsa Lei: Morning, Rohan, and morning, Scott. I have got two questions. Firstly, as you think about FY27, are there any revenue streams adjacent to advertising where you could win? I guess you spoke to first-party data today. Can you leverage some of that to create maybe a recurring revenue stream less correlated with the ad cycle?

Speaker #4: I guess you spoke to first-party data today. Can you leverage some of that to create, maybe, a recurring revenue stream, less correlated with the ad cycle?

Speaker #1: It's a terrific question. Yes, so I think we've actually got a job to do just to capture more of the opportunity that we haven't been so far on the advertising front.

Rohan Lund: Well, it is a terrific question. I think we have actually got a job to do just to capture more of the opportunity that we have not been so far on the advertising front. I think as we bring our first-party data to the table and productize it in a way that is easy for our salespeople and the market, there is an opportunity there for us to capture more than what we have to date on the advertising side. But I tend to agree with you. With the size of the audiences that we have and the first-party data that we possess, it is a unique position to look at other revenue sources. But right now, I am very focused in the business on just executing what is in front of us because I think there is a real opportunity there.

Speaker #1: I think as we bring our first-party data to the table and productize it in a way that's easy for our salespeople and the market, there's an opportunity for us to capture more than what we have to date.

Speaker #1: On the advertising side, but I tend to agree with you: with the size of the audiences that we have and the first-party data that we possess, it's a unique position to look at other revenue sources.

Speaker #1: But right now, I'm very, very focused in the business on just executing what's in front of us, because I think there's a real opportunity there.

Elsa Li: Yeah. Understood. My second question is, if you could please walk us through the puts and takes on cost into next year, which areas are you more comfortable with controlling versus which ones do you maybe see potentially more headwinds?

Ailsa Lei: Yeah. Understood. My second question is, if you could please walk us through the puts and takes on cost into next year, which areas are you more comfortable with controlling versus which ones do you maybe see potentially more headwinds?

Speaker #4: Yep, understood. And then my second question is, if you could please walk us through the puts and takes on cost into next year? Which areas are you more comfortable with controlling, versus which ones do you maybe see potentially more headwinds?

Speaker #1: Thanks, Elsa. Scott here, just to take your question. I think in terms of tailwinds for this fiscal year, obviously we'll get the benefit of the folks who have already left the business and the other cost reductions.

Scott Butterworth: Thanks, Elsa. Scott here, just to take your question. I think in terms of tailwinds for this fiscal year, obviously, we will get the benefit of the folks who have already left the business and the other cost reductions that we pushed through in fiscal 2026. There are the other cost reduction programs which are due to deliver this year as part of the AUD 145 million to AUD 150 million exercise. That is progressing as we expected it to do. In the way of these things, some areas over-deliver, some areas under-deliver, but net-net, it is where we expect it to be. That is all positive. I think in areas of headwinds, albeit they are known headwinds, there is just the general level of inflation in the economy, that impacts a range of our non-labor costs and also labor costs for those folks who are on EBA arrangements.

Speaker #1: We push through in fiscal '26. There are other cost reduction programs, which are due to deliver this year as part of the $145 to $150 million exercise.

Speaker #1: That is progressing as we expected it to. In the way of these things, some areas over-deliver, some areas under-deliver. But net-net, it's where we expect it to be.

Speaker #1: That's all positive. I think, in areas of headwinds—albeit they are known headwinds—there's just the general level of inflation in the economy. That impacts a range of our non-labor costs.

Speaker #1: And also labor costs for those folks who are on EBA arrangements. Outside of that, most of the cost movements, I think, are relatively well understood.

Scott Butterworth: Outside of the

Scott Butterworth: Outside of the. Most of the cost movements I think are relatively well understood. I think we feel, this is why we wouldn't have put it out otherwise, we feel confident in saying that costs will grow below the level of inflation in the economy. So in real terms, a cost reduction.

Rohan Lund: Most of the cost movements I think are relatively well understood. I think we feel, this is why we wouldn't have put it out otherwise, we feel confident in saying that costs will grow below the level of inflation in the economy. So in real terms, a cost reduction. We've been very focused on what our cost run rate looks like coming into FY28. There's still a hangover in some of the content agreements that we're just washing through at the moment. But certainly, everything we're focused on is resetting this cost base so that by FY28, we're starting to have the shape of the organization that we think it should be.

Speaker #1: And I think we feel this is why I wouldn't have—and we wouldn't have—put it out otherwise. We feel confident in saying that costs will grow below the level of inflation in the economy.

Speaker #1: So, in real terms, a cost reduction. And we've been very focused on what our cost run rate looks like coming into FY28. There's just, you know, there's still a hangover in some of the content agreements that we're just watching through at the moment.

Rohan Lund: We've been very focused on what our cost run rate looks like coming into FY28. There's still a hangover in some of the content agreements that we're just washing through at the moment. But certainly, everything we're focused on is resetting this cost base so that by FY28, we're starting to have the shape of the organization that we think it should be.

Speaker #1: But certainly, everything we're focused on is resetting this cost base, so that by FY28, we're starting to have the shape of the organization that we think it should be.

Speaker #4: Yep. Understood. Thank you both.

Elsa Li: Yep, understood. Thank you both.

Ailsa Lei: Yep, understood. Thank you both.

Speaker #3: Thank you. There are no further questions at this time. And that does conclude our conference for today. Thank you for participating. You may now disconnect.

Operator 2: Thank you. There are no further questions at this time, and that does conclude our conference for today. Thank you for participating. You may now disconnect.

Operator: Thank you. There are no further questions at this time, and that does conclude our conference for today. Thank you for participating. You may now disconnect.

Browse all earnings call transcripts

Full Year 2026 Southern Cross Media Group Ltd Earnings Call

Request TrialDemo

SCA

Earnings