Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: You're guiding non-revenue-related cost to be below 270. Can I just confirm, 270 was also the cost base in FY24 on an equivalent basis? A: That's correct, Brian.
Q: How would corporate cost change without TV going forward? A: As the business changes, we're looking to keep corporate costs, as well as every other part of our business, under control. I would expect corporate costs to be at least the same or lower in future years. With the sale of the TV business, we're a smaller business, so we need to adjust our cost base, particularly in the corporate area.
Q: So in essence for this year, the cost out initiatives will basically act to offset all natural inflation in the cost base. Is that the way to look at it? A: We've been very active in the cost out front during the first half and in recent weeks, putting in place cost initiatives to ensure the cost base will be lower than the $270 million of this year on a normalized basis. We're very confident in that because those activities have been completed.
Q: Can you talk about the shape of your digital radio cost base going forward? Is the circa 32, 33 million annualized non-revenue related cost base sustainable? A: We look at it as a margin business of about 25% on a sustainable basis. We are investing in the business, but if we can keep that cost base to CPI and make offsetting changes in broadcasts, that's what we would like to achieve. Listener digital audio is our growth engine, and we won't restrict investment in that.
Q: What level of net debt would you be comfortable with, and when do you expect those TV payments? A: Net debt is about $93 million. We've improved our leverage significantly and expect further improvement by FY25. The board's intent is to continue reducing debt through free cash flow. We hope to reassess returning to a normal dividend payout ratio once our gearing is at a more sustainable level.
Q: On the free cash flow, is it after net financing costs and tax? A: We look at the net cash from operations before the financing costs.
Q: Is there an opportunity to reduce corporate costs, especially without TV going forward? A: We'll be all about audio shortly and are happy to compare our overall margins and free cash flow against any competitor. The cost out activities have been across all parts of our business, and we continue to optimize.
Q: Are you investigating ways to return franking credits to shareholders or considering consolidation for shareholder value? A: We believe consolidation is required and inevitable, providing opportunities for media operators. We think we're the best in class audio company in Australia, and franking credits could be utilized in future restructures, but it's not our primary focus.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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