re: Village take two: This wouldn't have helped Austereo says ad...

re: Village take two: This wouldn't have helped Austereo says ad market takes toll on earnings 18/06/02

AFR News - 18.06.02 12:44

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Ben Power


Australia's biggest radio group Austereo on Tuesday confirmed it would fail to meet prospectus forecasts and post flat earnings this year because of a brutal ad market.

The company in a statement to the Australian Stock Exchange that underlying net profit after tax would be in line with 2001 pro-forma result of $50.5 million -- but below prospectus forecasts of $52.6 million.

Managing director Brad March on Monday told the Australian Financial Review the radio company had been hit by a 6 per cent slump in advertising in April, though conditions had improved in May and the outlook was encouraging for July.

Austereo executive chairman Peter Harvie said in Tuesday's statement: "Given the severe advertising market conditions as well as new competition, it is a great achievement to be able to match last year's figure. This is a credit to the focus and talent of the Austereo team."

Austereo said that after including the profit from its recently sold Newcastle joint venture, net profit after tax for the current year would be 5 per cent higher than prospecuts forecasts of $52.6 million.

"The company also advises that its forecast dividend will be in accordance with its stated policy of between 50 per cent and 70 per cent of net profit after tax," it said.

Austereo has been hit by new entry of DMG Radio Australia's Nova stations in the Sydney and Melbourne market.

According the broker JBWere Austereo's national market share will fall to 48 per cent, from 51 per cent this year.

Austereo on Tuesday that it had regained the number one FM station slot in Melbourne with FOX FM.

In other radio industry news the Australian Radio Network, a joint venture between APN News & Media and Clear Channel, said it had appointed Jeremy Millar as group program director.

He will oversee programming for ARN's 10 stations from next month with current group program director Alan Furst returning to the US.

Mr Millar has been in broadcasting for 22 years and was recently consultant to radio groups in the US and Europe.


Austereo shares were unchanged at $1.66.