Full Year 2026 GTN Ltd Earnings Call

August 23, 2026

Speaker #2: Thank you for standing by, and welcome to the GTN Limited fiscal year 2026 financial results conference call. All participants are on a listen-only mode.

Operator: Thank you for standing by, and welcome to the GTN Limited Fiscal Year 2026 financial results conference 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. Peter Tonagh, Chairman. Please go ahead.

Speaker #2: 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 1 on your telephone keypad.

Speaker #2: I would now like to hand the conference over to Mr. Peter Tana, Chairman. Please go ahead.

Speaker #3: Thanks, Chuck. Good morning, everyone, and welcome to the GTN Investor Call in relation to the FY26 financial year. I have with me today our Global CFO, Ben Brooks, and our Chief General Counsel, Sophie Jackson.

Peter Tonagh: Thanks, Chuck. Good morning, everyone, and welcome to the GTN investor call in relation to the FY26 financial year. I have with me today our Global CFO, Ben Brooks, and our Chief General Counsel, Sophie Jackson. Our Global CEO, Vic Lorusso, has unfortunately suffered a sports injury over the weekend and can't be with me today, but I know that he'll be listening in intently. FY26 was undoubtedly a challenging year, a year of significant market disruption. GTN has come through that period leaner, more focused, and better positioned for the future, and we're excited about the opportunity ahead for you, our shareholders. I want to make four simple points about our positioning before handing over to Ben to take you through the FY26 financials in more detail. First, GTN continues to deliver a unique proposition to both our advertisers and our affiliate networks.

Speaker #3: Our global CEO, Vic LaRusso, has unfortunately suffered a sports injury over the weekend and can't be with me today, but I know that he'll be listening in intently.

Speaker #3: FY26 was undoubtedly a challenging year—a year of significant market disruption. But GTN has come through that period leaner, more focused, and better positioned for the future, and we're excited about the opportunity ahead for you, our shareholders.

Speaker #3: I want to make four simple points about our positioning before handing over to Ben to take you through the FY26 financials in more detail.

Speaker #3: First, GTN continues to deliver a unique proposition to both our advertisers and our affiliate networks. We offer one of the largest, highest-impact broadcast audience reach propositions.

Peter Tonagh: We offer one of the largest, highest impact broadcast audience reach propositions in each of the four markets we operate in today, and those four markets are among the top 10 advertising markets in the world. Second, our position in this market is underpinned by long-term affiliate agreements that are now largely secure in Australia, our largest market, until at least 2030. Our proposition in Australia is anchored by our long-term agreement with SCA, Australia's largest audio provider, through a contract that runs through until 2046. We've recently added a key new affiliate and extended other major contracts until around 2030. We will not renew one large affiliate agreement at the end of the year, contributing significant AUD savings while retaining our reach proposition through our new affiliate and the extension of coverage with existing affiliate partners.

Speaker #3: In each of the four markets we operate in today—and those four markets are among the top 10 advertising markets in the world. Second, our position in this market is underpinned by long-term affiliate agreements that are now largely secure in Australia, our largest market, until at least 2030.

Speaker #3: Our proposition in Australia is anchored by our long-term agreement with FCA, Australia's largest audio provider, through a contract that runs through until 2046. We've recently added a key new affiliate, and extended other major contracts until around 2030.

Speaker #3: We will not renew one large affiliate agreement at the end of the year, contributing significant dollar savings, while retaining our reach proposition through our new affiliate and the extension of coverage with existing affiliate partners.

Speaker #3: My third point is that this proposition translates into significant cash flow, which is the metric that we've determined to be our primary measure of success.

Peter Tonagh: My third point is that this proposition translates into significant cash flow, which is the metric that we've determined to be our primary measure of success. Last year, we generated AUD 22 million in free cash flow while securing an annualized AUD 15 million of cash savings per year through affiliate renegotiations, our exit from aviation, and operating efficiencies from initiatives, including AI. We expect AUD 20 million per annum of run rate operating cost savings by 2028, the vast majority of which have already been enacted. We've also been very focused on improving the way we grow revenue. Across the group, we're strengthening our direct relationships with clients, expanding access to new opportunities through agency partnerships, and becoming more disciplined in the way in which we manage and monetize our premium inventory. Finally, with that free cash flow, we continue to focus on returning cash to our shareholders.

Speaker #3: Last year, we generated $22 million in free cash flow, while securing an annualized $15 million of cash savings per year through affiliate renegotiations, our exit from aviation, and operating efficiencies from initiatives including AI.

Speaker #3: We expect $20 million per annum of run-rate operating cost savings by 2028, the vast majority of which have already been enacted. We've also been very focused on improving the way we grow revenue.

Speaker #3: Across the group, we're strengthening our direct relationships with clients, expanding access to new opportunities through agency partnerships, and becoming more disciplined in the way we manage and monetize our premium inventory.

Speaker #3: And finally, with that free cash flow, we continue to focus on returning cash to our shareholders. With today's declared dividend of $10 million, we will have returned over $67 million in cash to shareholders over the past two years, while maintaining a conservative balance sheet.

Peter Tonagh: With today's declared dividend of AUD 10 million, we will have returned over AUD 67 million in cash to shareholders over the past two years while maintaining a conservative balance sheet. We expect to continue to distribute 100% of NPAT-A each year, which, based on recent guidance, represents a 13% to 26% dividend yield for FY27, based on today's market capitalization. Overall, we believe that we're very well positioned for the future. I'll now hand over to Ben for some more detail on FY26.

Speaker #3: We expect to continue to distribute 100% of NPAT A each year, which, based on recent guidance, represents a 13% to 26% dividend yield for FY27, based on today's market capitalization.

Speaker #3: Overall, we believe that we're very well positioned for the future. I'll now hand over to Ben for some more detail on FY26.

Speaker #4: Thank you, Peter, and good morning, everyone. Group result: For the full year, group net revenue was $156 million, down 13.4% on FY25, and adjusted EBITDA was $13 million, down 21.8%.

Ben Brooks: Thank you, Peter, and good morning, everyone. Group result. For the full year, group net revenue was AUD 156 million, down 13.4% on FY25, and adjusted EBITDA was AUD 13 million, down 21.8%. Both were ahead of guidance. Bridging the two halves. At the H1, we reported revenue of AUD 82.5 million, down 14.7%, and adjusted EBITDA of AUD 5.8 million, down 53%, alongside a AUD 41.5 million non-cash impairment against goodwill and intangibles in Australia and the UK. The H2 recovered meaningfully as cost actions were realized and Brazil's momentum continued. Full year adjusted EBITDA of AUD 13 million implies H2 EBITDA of approximately AUD 7.2 million, over 20% higher than the H1. FY26 segment performance in summary. Australia grew EBITDA despite weaker revenue on the cost-out initiatives. Brazil was our standout with strong revenue growth, which converted into dynamic margin expansion.

Speaker #4: Both were ahead of guidance. Bridging the two halves, at the half year we reported revenue of $82.5 million, down 14.7%, and adjusted EBITDA of $5.8 million.

Speaker #4: Down 53%. Alongside a $41.5 million non-cash impairment against goodwill and intangibles in Australia and the UK. The second half recovered meaningfully, as cost actions were realized and Brazil's momentum continued.

Speaker #4: Full-year adjusted EBITDA of $13 million implies second-half EBITDA of approximately $7.2 million, over 20% higher than the first half. FY26 segment performance in summary: Australia grew EBITDA despite weaker revenue, due to the cost-out initiatives.

Speaker #4: Brazil was our standout, with strong revenue growth, which converted into dynamic margin expansion. Brazil is now our fastest-growing market and is continuing to invest in new regions, which are not yet at full expected run rate.

Ben Brooks: Brazil is now our fastest-growing market and is continuing to invest in new regions, which are not yet at full expected run rate. Canada underperformed in a tough ad market. Management has reset the cost base, providing a path to profitability. The UK faces structural headwinds from a changing media landscape and are reviewing options to restore profitability or eliminate the risk of sustained losses. Corporate benefited from disciplined cost management groupwide. Cost initiatives. We actioned AUD 12 million of annualized savings in FY26, of which approximately AUD 6 million is reflected in this year's result. The balance flows through in FY27.

Speaker #4: Canada underperformed in a tough ad market. Management has reset the cost base, providing a path to profitability. The UK faces structural headwinds from a changing media landscape and is reviewing options to restore profitability or eliminate the risk of sustained losses.

Speaker #4: Corporate benefited from disciplined cost management group-wide. Cost initiatives: we actioned $12 million of annualized savings in FY26, of which approximately $6 million is reflected in this year's result; the balance flows through in FY27.

Speaker #4: This included renegotiating key affiliate arrangements in Australia, the non-renewal of one of ATN's key agreements from December 31, 2026, offset post year-end by a major new affiliate partnership, and strengthened inventory allocation with our largest radio network partners.

Ben Brooks: This included renegotiating key affiliate arrangements in Australia, the non-renewal of one of GTN's key agreements from 31 December 2026, offset post-year-end by a major new affiliate partnership, and strengthened inventory allocation with our largest radio network partners. Management believes it will continue to have sufficient inventory to satisfy its advertising customers following these changes. Combined with these affiliate changes, we have identified a further AUD 8 million of annualized benefit, partly recognized in FY27. Together with the full-year impact of FY26 savings, that converts to nearly AUD 20 million of cost savings in FY28 and beyond. This shift to an asset-light model has cut annual CapEx to under AUD 1 million going forward, down from AUD 3 to 5 million historically, and no operational impact on client service. We expect a further AUD 1.5 million of cash proceeds in early FY27 from the sale of the remaining aviation fleet. Cash flow and balance sheet.

Speaker #4: Management believes it will continue to have sufficient inventory to satisfy its advertising customers following these changes. Combined with these affiliate changes, we've identified a further $8 million of annualized benefit, partly recognized in FY27.

Speaker #4: Together with the full-year impact of FY26 savings, that converts to nearly $20 million of cost savings in FY28 and beyond. This shift to an asset-light model has cut annual CapEx to under $1 million going forward, down from $3 to $5 million historically, and with no operational impact on client service.

Ben Brooks: Together with the full-year impact of FY26 savings, that converts to nearly AUD 20 million of cost savings in FY28 and beyond. This shift to an asset-light model has cut annual CapEx to under AUD 1 million going forward, down from AUD 3 to 5 million historically, and no operational impact on client service. We expect a further AUD 1.5 million of cash proceeds in early FY27 from the sale of the remaining aviation fleet. Cash flow and balance sheet.

Speaker #4: We expect a further $1.5 million of cash proceeds in early FY27 from the sale of the remaining aviation fleet. Cash flow and balance sheet: Net cash from operating activities was approximately $22 million, up around 69% from $13 million in FY25.

Ben Brooks: Net cash from operating activities was approximately AUD 22 million, up around 69% from AUD 13 million in FY25, including a AUD 10 million benefit from working capital management. A further AUD 5 million was realized from the asset sales tied to the aviation exit. Cash on hand rose to AUD 33 million at 30 June 2026, up from AUD 21 million a year earlier and AUD 28 million at the H1. Net debt closed at approximately AUD 2 million and down from AUD 7 million at the H1, despite returning AUD 46 million to shareholders during the year via the capital return in August 2025 and interim dividend March 2026. At H1, we had fully drawn our AUD 35 million debt facility to fund that return. H2 cash generation brought net debt down to AUD 2 million. Capital management.

Speaker #4: Including a $10 million benefit from working capital management, a further $5 million was realized from the asset sales tied to the aviation exit. Cash on hand rose to $33 million at 30 June 2026, up from $21 million a year earlier, and $28 million at the half-year.

Speaker #4: Net debt closed at approximately $2 million, down from $7 million at the half-year, despite returning $46 million to shareholders during the year via the capital return in August '25 and the interim dividend in March '26.

Speaker #4: At half-year, we'd fully drawn our $35 million debt facility to fund that return. Second-half cash generation brought net debt down to $2 million. Capital management: the Board has declared a final FY26 dividend of 5.24 cents per share, franked at approximately 16%, totaling approximately $10 million. Record date is 4 September 26, payment date is 21 September 26.

Ben Brooks: The board has declared a final FY26 dividend of 5.24 cents per share, franked at approximately 16%, totaling approximately AUD 10 million. Record date, 4 September 2026. Payment date, 21 September 2026. On payment, GTN will have returned approximately AUD 64 million to shareholders via dividends and capital return over the past two years, plus AUD 3 million via an on-market buybacks, a total of approximately AUD 67 million in capital management initiatives against our current enterprise value of approximately AUD 4 million. Consistent with our disciplined approach, the board intends to pursue further returns subject to ongoing capital requirements and prudent balance sheet. FY27 outlook. FY27 will benefit from the full run rate of FY26 cost initiatives and part year contribution from the new affiliate improvements. The board has confirmed FY27 adjusted EBITDA guidance of AUD 15 to 20 million, expected to translate to NPATA of AUD 5 to 10 million.

Speaker #4: On payment, GTN will have returned approximately $64 million to shareholders via dividends and capital return over the past two years, plus $3 million via on-market buybacks, a total of approximately $67 million in capital management initiatives.

Speaker #4: Against our current enterprise value of approximately $40 million, and consistent with our disciplined approach, the Board intends to pursue further returns, subject to ongoing capital requirements and a prudent balance sheet.

Ben Brooks: Consistent with our disciplined approach, the board intends to pursue further returns subject to ongoing capital requirements and prudent balance sheet. FY27 outlook. FY27 will benefit from the full run rate of FY26 cost initiatives and part year contribution from the new affiliate improvements. The board has confirmed FY27 adjusted EBITDA guidance of AUD 15 to 20 million, expected to translate to NPATA of AUD 5 to 10 million.

Speaker #4: FY27 outlook: FY27 will benefit from the full run rate of FY26 cost initiatives and part-year contribution from the newer affiliate improvements.

Speaker #4: The Board has confirmed FY27 adjusted EBITDA guidance of $15 to $20 million, expected to translate to NPATA of $5 to $10 million. Consistent with our capital management policy, the Board intends to distribute 100% of NPATA to shareholders in FY27.

Ben Brooks: Consistent with our capital management policy, the board intends to distribute 100% of NPATA to shareholders in FY27. Indicatively, a dividend yield of 13% to 26% on that range. With that, I will hand back to Peter.

Speaker #4: Indicatively, a dividend yield of 13% to 26% on that range. With that, I'll hand back to Peter.

Speaker #1: Thanks, Ben. That concludes our briefing. Before we hand over to questions, I want to thank Vic, Ben, and Sophie for their leadership as a fabulous GTN team.

Peter Tonagh: Thanks, Ben. That concludes our briefing. Before we hand over for questions, I want to thank Vic, Ben, and Sophie for their leadership of the fabulous GTN team, our country heads for navigating the challenging environment and making the most of it to reset the business, and you, our shareholders, for your ongoing support. Are there any questions from shareholders?

Speaker #1: Our country heads for navigating the challenging environment and making the most of it to reset the business. And you, our shareholders, for your ongoing support.

Speaker #1: Are there any questions from shareholders?

Speaker #2: Thank you. If you wish to ask a question, please press star, then 1 on your telephone and wait for your name to be announced.

Peter Tonagh: Thank you. If you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question. The first question will come from John Burgess with RAFF Research. Please go ahead.

Operator: Thank you. If you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question. The first question will come from John Burgess with RAFF Research. Please go ahead.

Speaker #2: If you wish to cancel your request, please press star, then 2. If you are on a speakerphone, please pick up the handset to ask your question.

Speaker #2: And the first question will come from John Burgess with RASS Research. Please go ahead.

Speaker #5: Hi, good morning. I'm just interested if the working capital release—I think it's now, by my calculations, about negative 6% of revenue. Is that a sustainable number going forward?

John Burgess: Hi, good morning. I'm just interested if the working capital release, I think it's now, in my calculations, it's about negative 6% of revenue. Is that a sustainable number going forward?

Speaker #4: I think it will probably settle at where it is now, I think. And once again, I would say half of the $10 million is contributed through the accounts receivable and half with regards to the accounts payable.

Ben Brooks: I think it will probably settle where it is now, I think. Once again, half of the AUD 10 million is contributed through the accounts receivable and half was with regards to the accounts payable. So I would say it would be settling where it is today.

Speaker #4: So, I would say it would be settling where it is today.

Speaker #5: So, have your affiliates just given you better terms in terms of payables?

John Burgess: Have your affiliates just given you better terms in terms of payables?

Speaker #4: We definitely have worked harder with regards to our payables, yes. And also, we've just implemented a new finance ERP system that, obviously, has also contributed a lot to better management of our suppliers.

Ben Brooks: We definitely have worked harder with regards to our payables, yes. We have just implemented a new finance ERP system that obviously has also contributed a lot to better management of our suppliers.

Speaker #5: And I'm just interested in your guidance. What are your assumptions around cycle versus cost savings? Can you give some color on that?

John Burgess: I am just interested in your guidance. What are your assumptions around cycle versus cost savings? Can you give some color on that?

Speaker #1: John, thanks for the question. I think you mean in terms of the advertising cycle?

Peter Tonagh: John, thanks for the question. I think you mean in terms of the advertising cycle?

Speaker #5: Yeah, I guess—yeah, I guess probably more the revenue side of where the cycle is over, that's right, in terms of what you're controlling with your cost-out.

John Burgess: Yeah, I guess probably more the revenue side of

Peter Tonagh: Yeah

John Burgess: with the cycle over, that's right, in terms of what you're controlling with your cost out.

Speaker #1: Yeah, I think, first of all, we're a very small part of the total audio advertising market. And so I think we kind of less think about the total market as the driver of our revenue.

Peter Tonagh: Yeah. I think, first of all, we're a very small part of the total audio advertising market, so I think we're kind of less think about the total market as the driver of our revenue. Having said that, we're very realistic about the audio market and the position it's in right now. Obviously, the change in the total market varies, depending on the country that we're talking about. We expect that we're going to see continued pressure in the market, in the UK in particular. In Canada's had a very tough few years from a market perspective. We don't expect to see a full recovery, but we expect it to stabilize a little. In the Brazilian market, we still expect to see continued growth in that market. It's always hard to tell, and that market's a bit more volatile, but we do expect to see continued growth.

Speaker #1: Having said that, we're very realistic about the audio market and the position it's in right now. Obviously, the change in the total market varies depending on the country that we're talking about.

Speaker #1: We expect that we're going to see continued pressure in the market, in the UK in particular. In Canada, it's been a very tough few years from a market perspective.

Speaker #1: We don't expect to see a full recovery, but we expect it to stabilize a little. In the Brazilian market, we still expect to see continued growth in that market.

Speaker #1: It's always hard to tell in that market. It's a bit more volatile, but we do expect to see continued growth. And the Australian market—we're in line with the forecasts for the Australian market, as you'd expect.

Peter Tonagh: The Australian market, we're in line with the forecasts for the Australian market, as you'd expect. We're really following the guidance of the experts in the market.

Speaker #1: We're really following the guidance of the experts in the market.

Speaker #5: So in Australia, is that—so if I look at the numbers, I think adjusted EBITDA before any one-offs, first half was about $6.6 million, and the second half was $13 million.

John Burgess: In Australia, if I look at the numbers, I think, adjusted EBITDA before any one-offs, H1 was about AUD 6.6 million and the H2 was AUD 13 million. Should we look at AUD 13 million as an annualized rate achievable in FY27?

Speaker #5: So, should we look at 13 as an annualized rate achievable in FY27?

Speaker #1: I think, as Ben mentioned, the second half performance was definitely better than the first half. That's associated largely with improvements in an affiliate agreement that we had renegotiated.

Peter Tonagh: I think as Ben mentioned, the H2 performance was definitely better than the H1. That is associated largely with improvements in an affiliate agreement that we had renegotiated. We will see the full year impact of that half in the H2 of this year, and then we will not be renewing that affiliate for calendar 2027 and beyond. We will see very significant cost savings flow through in the 2027 calendar year.

Speaker #1: We'll see the full-year impact of that half in the second half of this year. And then we won't be renewing that affiliate for calendar '27 and beyond.

Speaker #1: And so, we'll see very significant cost savings flow through in the 2027 calendar year.

Speaker #5: Okay. And final one, just an update on the aviation fleet—so, is that, how many helicopters do you have left? And will you have left going forward, if any?

John Burgess: Okay. A final one, just an update on the aviation fleet. How many helicopters do you have left, and will have left going forward, if any?

Speaker #1: We expect to have no aviation moving forward. I believe we have one. One fixed-wing asset was in Canada at year-end, I think, and is now.

Peter Tonagh: We expect to have no aviation moving forward. I believe we have none left. One fixed wing asset was in Canada at year-end, I think, and has now been sold, and we have exited. There is one helicopter in Brazil, which is in the process of being sold right now. Post that, we will be completely removed from aviation. There are a couple of reasons for that. The first reason is, clearly with the improving technologies, including a whole range of different sources of traffic information, it is no longer critical to our business. The second thing is, it is pretty high cost. The third thing is, there is obviously a lot of risk associated with being in the aviation business, and as an organization, we would prefer to be out of that risk.

Speaker #1: Sold. Have been sold and have exited. And there's one helicopter in Brazil which is in the process of being sold right now. Post that, we'll be completely removed from aviation.

Speaker #1: There are a couple of reasons for that. The first reason is, clearly, with the improving technologies—including a whole range of different sources of traffic information—it's no longer critical to our business.

Speaker #1: The second thing is, it's pretty high cost. And the third thing is, there's obviously a lot of risk associated with being in the aviation business.

Speaker #1: And as an organization, we would prefer to be out of that risk.

Speaker #5: And presumably, so there's obviously a COGS saving and there's also a lower depreciation going forward because of the sale of those assets?

John Burgess: And presumably, there is obviously a COGS saving, and there is also a lower depreciation going forward because of the sale of those assets.

Speaker #1: Yeah, it's a combination of—we'll see significant reduction in CAPEX costs. Helicopters, obviously, have significant CAPEX, and so our CAPEX is expected to be sub-$1 million a year going forward.

Peter Tonagh: Yeah. It is a combination of, we will see significant reduction in CapEx costs. Helicopters obviously have significant CapEx, and so our CapEx is expected to be sub AUD 1 million a year going forward. And you are right also in terms of improvements in depreciation, but most importantly, operating cost savings.

Speaker #1: And you're right, it also, in terms of improvements in depreciation and, but most importantly, operating cost savings.

Speaker #5: Right. Thanks for your time.

John Burgess: Great. Thanks for your time.

Speaker #1: Thanks, John.

Peter Tonagh: Thanks, John. Thanks.

Speaker #4: Thanks.

Speaker #2: Again, if you have a question, please press star, then one. As there are no further questions at this time, I would like to hand the call back over to Mr. Tano for any closing remarks.

Peter Tonagh: Again, if you have a question, please press star then one. As there are no further questions at this time, I would like to hand the call back over to Mr. Tono for any closing remarks. Please go ahead.

Operator: Again, if you have a question, please press star then one. As there are no further questions at this time, I would like to hand the call back over to Mr. Tono for any closing remarks. Please go ahead.

Speaker #2: Please go ahead.

Speaker #1: Thanks, Chuck. And I'd just like to thank everybody for joining the call. Again, thanks to the leadership team here at GTN for all of their effort.

Peter Tonagh: Thanks, Chuck, and I would just like to thank everybody for joining the call. Again, thanks to the leadership team here at GTN for all of the effort. Once again, we are excited about the future opportunities with a refocused business in GTN and look forward to updating you further after the H1. Thank you. Thank you.

Speaker #1: And once again, we're excited about the future opportunities with a refocused business in GTN, and look forward to updating you further after the first half.

Speaker #1: Thank you.

Speaker #4: Thank you.

Peter Tonagh: This does conclude our conference for today. Thank you for your participation. You may now disconnect.

Operator: This does conclude our conference for today. Thank you for your participation. You may now disconnect.