Can Southern Cross Austereo Maintain Momentum After Divesting TV Assets?
Southern Cross Media Group reported a 5% revenue increase for FY2025, powered by growth in broadcast radio and digital audio, with its LiSTNR platform achieving profitability for the first time. The company declared a fully franked final dividend of 4 cents per share and outlined a new executive remuneration framework aligned with shareholder returns.
- 5% revenue growth to $421.9 million driven by broadcast radio and digital audio
- Net profit after tax from continuing operations up 103% including significant items
- LiSTNR digital audio platform achieves first-time profitability with 29% revenue growth
- Divestment of regional television assets completed, focusing on audio content
- New FY26 executive incentive scheme aligned with absolute total shareholder return
Strong Revenue and Profit Growth
Southern Cross Media Group Limited (ASX, SXL) has reported a solid financial performance for the year ended 30 June 2025, with total revenue rising 5.0% to $421.9 million. This growth was underpinned by gains across both its traditional broadcast radio business and its rapidly expanding digital audio segment.
Net profit after tax from continuing operations surged by 103% to $6.4 million when including significant items, and by an even more striking 239% to $15.1 million when excluding these items. The company’s disciplined cost management and operating model transformation contributed to a 34.4% increase in EBITDA to $71.1 million, highlighting improved operational efficiency alongside revenue growth.
Digital Audio Profitability and LiSTNR Growth
A key highlight was the digital audio business, anchored by the LiSTNR platform, which achieved profitability for the first time with an underlying EBITDA of $2.0 million. Digital audio revenues grew 28.8% to $45.1 million, driven by strong podcast and streamed radio advertising revenue. LiSTNR’s user base expanded 20% to 2.4 million signed-up users, with total listening hours up 15% and a 36% increase in monthly average revenue per user.
The company’s investment in advanced advertising technology, including the LiSTNR AdTech Hub and the recent launch of LiSTNR Precision Plus, has enhanced targeted advertising capabilities, contributing to the platform’s monetisation success and market leadership in Australia’s digital audio space.
Strategic Divestment and Focus on Audio
During the year, Southern Cross Austereo completed the divestment of its regional television licences to Network Ten and Seven West Media, marking a strategic pivot to focus exclusively on audio content. The sale agreements include contingent consideration arrangements and termination provisions, reflecting the complex nature of these transactions.
This divestment allows the group to concentrate resources on growing its core broadcast radio and digital audio businesses, targeting the coveted 25 to 54 age demographic. The company’s metro radio advertising revenue grew 3.9%, outperforming the market, with audience share gains supporting this momentum.
Balance Sheet Strength and Dividend Declaration
Southern Cross Austereo reduced its net debt by 37% to $67.6 million, maintaining a leverage ratio well within covenant limits at 1.10 times. The group refinanced its $160 million syndicated debt facility, extending maturity to January 2028, and preserved strong liquidity with $57 million in undrawn facilities and a $25 million overdraft.
The board declared a fully franked final dividend of 4.0 cents per share, payable on 7 October 2025, reflecting confidence in the company’s cash flow generation and ongoing profitability.
Executive Remuneration Aligned with Shareholder Returns
Responding to shareholder feedback, Southern Cross Austereo introduced a new executive incentive scheme for FY26. This framework separates short-term and long-term incentives, with the long-term component fully aligned to absolute total shareholder return targets. The new scheme aims to better align management rewards with shareholder value creation, addressing concerns raised at the 2024 AGM.
The executive team, led by CEO John Kelly, has been refreshed with key appointments, including CFO Toby Potter, supporting the company’s strategic transformation and growth ambitions.
Risks and Outlook
The company acknowledges risks including sustaining LiSTNR’s profitability, slower-than-expected broadcast radio revenue growth, intensified competition from global technology firms, and cybersecurity threats. Nevertheless, Southern Cross Austereo expects continued revenue growth in FY26, targeting $435-$440 million, with EBITDA between $78-$83 million, supported by disciplined cost control and low capital expenditure.
With a clear strategic focus on audio and digital innovation, Southern Cross Austereo is positioned to capitalize on evolving media consumption trends while delivering shareholder value.
Bottom Line?
Southern Cross Austereo’s FY25 results mark a turning point as it pivots fully to audio, but sustaining digital momentum and navigating market risks will be key in FY26.
Questions in the middle?
- How will Southern Cross Austereo sustain and accelerate LiSTNR’s profitability amid growing competition?
- What impact will the new executive remuneration scheme have on management’s strategic decisions and shareholder returns?
- How might future advertising market volatility affect the contingent consideration from the TV licence divestments?
