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No Nine merger on cards for Southern Cross

Business

A merger between Southern Cross Austereo and affiliate partner Nine Entertainment isn’t on the cards even if the Federal Government’s media reforms get through the Senate.

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Southern Cross switched affiliation from the Ten Network to Nine in 2016 in a $500 million deal that has helped Southern Cross lift full-year profit 40.5 per cent to $108.6 million.

Ten is now a takeover target for billionaires Lachlan Murdoch and Bruce Gordon but Nine chief executive Grant Blackley on Thursday said Southern Cross was not looking to increase its share of earnings from television beyond its current 20 per cent.

“We have a skill set predominantly focused on audio assets that is continuing to emerge through our podcasting business and digital radio business,” Blackley said.

“At this point in time, we’re just looking at how we expand into adjacent markets that are of high growth potential for us.”

Nine on Thursday said it had slipped to a $203.4 million full-year loss due to previously announced writedowns of assets including its free-to-air TV network.

Southern Cross hopes one high growth area turns out to be its venture into large-format digital screens showing advertising and other local content in regional malls.

He said outdoor screens or billboards were not on the agenda.

Southern Cross beat its revised 2017 earnings guidance and lifted profit, helped by the government’s move to abolish broadcast licence fees.

The company, which operates Triple M and Hit Network radio stations and has a regional television affiliation with Nine, reported a 7.4 per cent revenue increase for the 12 months to June 30 and said it had saved $10.9 million from one-off items including the licence fee abolition.

The company in May had warned that full-year earnings would be lower than last year’s $168 million, but earnings before interest, tax, depreciation and amortisation came in at $177.4 million – up 5.8 per cent and just inside its initial guidance range issued in December.

At 1123 AEST, Southern Cross shares were three cents, or 2.3 per cent higher, at $1.35.

– AAP

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