Annual Report
2021
Defining Audio
HT&E Annual Report 2021
Creating Connections
that Count
HT&E owns Australia’s leading audio company, ARN,
providing the most complete audio experience for our
listeners and the most comprehensive audio solutions
for our partners. The Group also maintains a number
of other investments, including a 25% interest in the
secure messaging business, Soprano and outdoor
assets in Hong Kong.
Australia’s leaders
in audio
Content
Committed to live
& local
Commercialisation
& Partnerships
Innovations that
accelerate the business
Distribution
Everywhere our
listeners are
Broadcast Networks
Digital streaming,
Broadcast radio
and DAB+
On-air talent
Podcasting
Intelligent and secure
business mobile
messaging software
solutions for enterprises
and governments
worldwide
An agency creating ideas
that change the way
people feel about brands
Pioneer of the highest
quality innovation and
premium connected
on-the-go advertising
solutions
Robin, Terry & Kip – KIIS 97.3 Brisbane
Defining audio
We are everywhere our listeners are,
providing the greatest breadth and
depth of audio content in Australia.
01
ARN is home to Australia’s:
91m
Streaming
listening hours
(+12% YoY)4
5.4m
Radio audience nationally
(weekly)1
1.8m
Digital websites reach
(monthly)2
+64%
Podcast
downloads5
2.17m
iHeartRadio registered users
(lifetime)3
#1Metro Radio
Network*
#1Podcast
Network^
Most
established
digital audio
platform
1. GfK Radio Ratings, S8 2021, SMBAP, ARN AM/FM/DAB, Mon–Sun 5:30–12mn (cume), p10+.
2. Google Analytics: Website Page Impressions, All Devices, Australia, station websites include KIIS
Network, PG Network (excluding 4KQ), Edge (not de-duped): Nov 2021).
3. Adobe Analytics, iHeartRadio Australia Registration Data, Lifetime Users, Unique Visitors, Dec 21.
4. AdsWizz Audiometrix, Total Radio Streaming, Total Listening Hours 2021 v 2020.
5. Triton, ARN Network Total, Jan–Dec 2021 vs Jan–Dec 2020.
*
^
Source: GfK, S8-2021, SMBAP, 05:30–23:59,
P10+, AM/FM/DAB+, Based on Share.
Source: The Australian Podcast Ranker,
Triton Digital, December 2021.
In this report
02 Strategic Report
02 Delivering our strategy
04 Chairman’s letter 2021
06 CEO’s letter 2021
08 Operating & Financial Review
12
Review of Operations
16 Our people & culture
20
26
28
Environmental, Social & Governance (ESG)
Board of Directors
Senior management team
29 Directors’ Report
35
Remuneration Report
51 Financial Report
51
Auditor’s Independence Declaration
52 Consolidated Financial Statements
107 Directors’ Declaration
108
Independent Auditor’s Report
113 Shareholder Information
116 Corporate Directory
02
Delivering our strategy
In 2021, HT&E delivered on its strategic
focus by strengthening core Australian
radio operations and investing in its
digital audio growth strategy.
We deliver Australia’s most complete
audio offering and the business is
exceptionally well positioned to take
advantage of future audio opportunities
and improving advertising sentiment.
Our goal is to build the best broadcast
radio and digital audio business in
Australia, offering our audiences and
advertisers a gateway to develop
deeper connections in the booming
world of audio.
To accelerate our strategic intent, we
believe media companies of the future
will need to continually evolve their
audience and advertiser engagement.
Three pillars for growth:
1. Live and local content
delivered by Australia’s
best talent, and supported
by brands that people know
and trust.
2. Distributed across our
comprehensive network of
broadcast radio stations
and on iHeartRadio,
Australia’s most established
digital audio platform.
3. Commercialised through
a suite of innovative,
data and technology led
products and partnerships.
Our strategic
focus areas
Our critical
priorities
ARN Key Performance
Indicators (KPIs)
Scale of
audiences
Radio listenership continues to grow and we are the leading metropolitan radio network in Australia.
The acquisition from Grant Broadcasters of a regional radio network (ARN Regional), creates a truly
national broadcast network of scale made up of 58 stations across 33 markets. The acquisition of
certain radio operations and assets from Grant Broadcasters, the leading regional radio operator
in Australia, creates a truly national broadcast network of scale made up of 58 stations across
33 markets. The acquisition also saw us transfer the rights to commercially represent an additional
76 regional stations, giving ARN a presence in every state and territory across the nation.
Multi-platform
content delivery
ARN’s iHeartRadio is Australia’s most comprehensive digital audio distribution platform offering live
radio, music streaming and podcasts.
Consumer appetite for podcasts in particular continues to accelerate, with Australians downloading
more than half a billion podcasts in 2021 – an increase of 28%. ARN remains the country’s #1 podcast
publisher in 2021 – a leadership position we have now held for 21 consecutive months.
Increasing
digital data
and targeting
capabilities
Growth in our first party data and investment in innovative digital trading products such as ‘ARN’s
Dynamic Audio’ has led to increased digital revenues in 2021. Our technology trading stack is
delivering exponential growth in programmatic trading that will accelerate further in 2022.
Ease of
transaction
In 2021, ARN grew commercial share across our metropolitan markets thanks to consistent ratings
built around our ‘Connections That Count’ market proposition. Our innovative solutions have also
seen our sales teams pick up numerous awards during the year.
We also launched the proprietary “ARN Audio Connections Planner” – a unique planning tool
providing clients meaningful insights to maximise the effectiveness and measurability of their
audio campaigns.
HT&E Annual Report 2021 03
Audiosphere
Our ambition
To be Australia’s
destination of choice
for audio content and
commercial innovation
Our strategic
focus areas
Our critical
priorities
Scale of
audiences
Radio listenership continues to grow and we are the leading metropolitan radio network in Australia.
The acquisition from Grant Broadcasters of a regional radio network (ARN Regional), creates a truly
national broadcast network of scale made up of 58 stations across 33 markets. The acquisition of
certain radio operations and assets from Grant Broadcasters, the leading regional radio operator
in Australia, creates a truly national broadcast network of scale made up of 58 stations across
33 markets. The acquisition also saw us transfer the rights to commercially represent an additional
76 regional stations, giving ARN a presence in every state and territory across the nation.
Multi-platform
content delivery
ARN’s iHeartRadio is Australia’s most comprehensive digital audio distribution platform offering live
radio, music streaming and podcasts.
Consumer appetite for podcasts in particular continues to accelerate, with Australians downloading
more than half a billion podcasts in 2021 – an increase of 28%. ARN remains the country’s #1 podcast
publisher in 2021 – a leadership position we have now held for 21 consecutive months.
Increasing
digital data
and targeting
capabilities
Growth in our first party data and investment in innovative digital trading products such as ‘ARN’s
Dynamic Audio’ has led to increased digital revenues in 2021. Our technology trading stack is
delivering exponential growth in programmatic trading that will accelerate further in 2022.
Ease of
transaction
In 2021, ARN grew commercial share across our metropolitan markets thanks to consistent ratings
built around our ‘Connections That Count’ market proposition. Our innovative solutions have also
seen our sales teams pick up numerous awards during the year.
We also launched the proprietary “ARN Audio Connections Planner” – a unique planning tool
providing clients meaningful insights to maximise the effectiveness and measurability of their
audio campaigns.
ARN Key Performance
Indicators (KPIs)
ARN FM stations1
ARN EBITDA
ARN revenue
#1
In SYD, MELB, BRIS, ADL
for FM Stations1
Registered users
(lifetime)
2.17m
Up 16% YoY2
1
7
2
,
1
8
1
0
2
0
0
0
,
1
7
1
0
2
7
0
7
0
8
,
0
1
,
1
0
2
0
2
2
8
5
,
1
9
1
0
2
8
6
1
,
2
1
2
0
2
53.8
46.0*
2021
2020
195.6
171.5*
2021
2020
$53.8m
ARN digital revenue
9.4
2021
6.3*
2020
$9.4m
$195.6m
Podcast downloads
Dec 2020 to Dec 20213
+64%
* Excluding disposed businesses.
1. Source: GfK Radio Ratings, S8 2021, SMBAP, M–S 5:30am–12mn, #’1 based on Share.
2. Source: Adobe Analytics, iHeartRadio Australia Registration Data, Lifetime Users, Unique Visitors, 2021 vs 2020.
3. Triton, ARN Network Total, Jan-Dec 2021 vs Jan-Dec 2020
04
Chairman’s letter 2021
I am pleased to report that 2021 has been a year of
significant milestones for HT&E with the company
delivering on a number of key strategic priorities
placing the business in a very strong position to
drive continued growth in 2022 and beyond.
Net cash
Net Cash
$189.1m
2020
2021
$112.1m
$189.1m
Undrawn debt capacity
Drawn
$68m1
Facility
$260m
1.
Excludes bank guarantees.
Refer to note 6.1.
2. GfK Radio Ratings, S8 2021, SMBAP,
ARN AM/FM/DAB, Mon–Sun
5:30–12mn (cume), p10+.
3. Source: The Australian Podcast Ranker,
Triton Digital, December 2021.
Whilst the COVID-19 pandemic has
dramatically impacted our way of
life and disrupted business models,
HT&E is navigating the period well.
It has maintained its strategic focus
by strengthening core Australian radio
operations and investing in its digital audio
growth strategy, it resolved a long running
taxation dispute and removed a significant
potential balance sheet liability. This
together with strong capital management
throughout the pandemic has meant HT&E
was in a position to complete the accretive
acquisition from Grant Broadcasters of
a regional radio network (ARN Regional)
thereby accelerating future growth to
maximise shareholder value.
This progress, which is a tribute to
the efforts of our people, customers,
management and Board, means the
business is now exceptionally well
positioned to take advantage of future
audio opportunities and improving
advertising sentiment.
ARN – success continues
Advertising in the radio market returned
to growth in 2021 and the medium’s
relevance remains strong. Over the
last twelve months, ARN’s ratings and
commercial success has continued,
and the Company remains the best
performing audio business in Australia.
The business again experienced growth
in total listening for the year, with
ARN commercial radio now reaching
5.4 million people weekly2, and continues
to hold the title of #1 podcast network3
with 4.8 million monthly listeners.
Thanks to consistent ratings
performance and a strong commercial
offering that delivers integrated and
engaging content from some of the
world’s best talent across radio and
podcasting, advertising revenues in
our markets recovered well and we
experienced stronger revenue and
earnings performance compared to
2020, despite lengthy lockdowns in
Sydney and Melbourne.
ARN Regional creates
a national network
The Board has always focused on
identifying the right opportunities to
drive shareholder value and in November,
we were delighted to announce the
acquisition of 46 regional radio stations
(ARN Regional) from Grant Broadcasters
– the leading regional radio broadcaster
in Australia – for $307.5 million.
Strategically, this transaction fits very well
with the growth ambitions we have for
HT&E, allowing us to expand our audience
base and fast-track the delivery of our
digital audio content and advertising
opportunities across the country.
The combined businesses will create
a truly national broadcast network of
scale made up of 58 stations, across
33 markets, delivering innovative,
digitally enabled commercial solutions.
It provides the potential for significant
digital audio expansion to new
audiences by accelerating the rollout of
ARN’s established iHeartRadio platform
into regional areas.
It will also enable us to provide nationally
integrated commercial partnerships
for clients, giving them the ability to
access more than a third of Australian
consumers in one transaction.
As part of the transaction, Grant
Broadcasters became a substantial
shareholder in HT&E and we welcomed
its former CEO, Alison Cameron, to the
HT&E Board. Alison brings a wealth of
regional and radio expertise and will
provide critical continuity of knowledge as
we bring these two businesses together.
This accretive transaction is already
seeing positive early signs as integration
commences and thanks to the strength
of our balance sheet we maintain
the ability and flexibility to support
continued investments in organic and
inorganic growth initiatives.
HT&E Annual Report 2021 05
The year ahead
Looking ahead into 2022, HT&E’s
business remains well placed to establish
itself as the leading broadcast radio and
digital audio broadcaster in Australia.
The successful integration of ARN
Regional is a priority. We have the
benefit of a proven senior management
team, world recognised broadcasters,
and a national network that will expand
HT&E’s audience base and fast-track
digital audio content and advertising
opportunities.
I would like to thank our people for
their dedication, particularly given the
challenging conditions faced during
2021. I also wish to thank to my fellow
Board members for their contribution
and dedication. Our Board is a great
team, having a good mix of skills and
experience and it continues to be a
pleasure to work together on ensuring
the best for the company.
Finally, thanks to you, our shareholders,
for your continued support. This Board
and management team remain aligned
and determined to achieve the best
possible returns on your investment over
the long term. We look forward to your
continued support.
As part of establishing an appropriate
capital structure post the acquisition
from Grant Broadcasters, we exited
our interest in oOh!media, realising a
before tax gain of $31.1 million on our
initial investment.
The Board reinstated dividends in
June 2021 with an interim dividend
3.5 cents and we have now also declared
an additional final dividend of 3.9 cents,
together amounting to full year total
dividends of 7.4 cents. The accretive
share buyback also continued through
the year, with over 3.0m shares (1.1%)
bought at an average price of $1.66.
Soprano, an independent software
business in which HT&E holds a 25%
stake, continues to perform well and
delivered record revenue, gross margin
and earnings growth.
The decision by the Soprano shareholders
to terminate negotiations for the sale
of the business to Link Mobility Group
Holdings AS (“Link Mobility”) in
September 2021 was taken in the best
interests of our shareholders. While we
continue to work with Macquarie Capital
exploring liquidity options for HT&E’s
stake, the Soprano business remains
focused on business evolution. We expect
growth via increasing product usage by
existing customers, upselling of products
and services, acquiring new customers
and MNO partners, innovating on the
Soprano product and re-examining
immediate inorganic growth opportunities
for mergers and acquisitions.
ATO matter resolved
In October, the Board announced it had
settled a long running taxation dispute
with the Australian Taxation Office for the
sum of $70.7 million. This dispute related
to the financial years ended 31 December
2009 to 31 December 2016, and involved
$102.5 million of tax adjustments,
$49 million of penalties and interest
of $43 million, together totalling
$194.5 million.
The settlement of $70.7 million was
considered a fair and reasonable
outcome for the company. The dispute
had already been protracted with
assessments first issued in 2018 and as
part of assessing the best outcome, the
Board took into consideration the length
of any ongoing dispute, potentially
costly litigation and the overall level
of ongoing uncertainty.
Whilst HT&E remains satisfied that
its treatment of the branch matter
was consistent with relevant taxation
legislation, the Board viewed the
settlement arrangement reached
as being in the best interests of
shareholders removing potential
liability on our balance sheet for a
substantial amount of tax, interest and
penalties, and allowing HT&E to look
forward with certainty.
Strong balance sheet
HT&E continues to be in a strong financial
position with one of the strongest
balance sheets in the Australian media
sector. The Group is well capitalised with
$189.1 million net cash and access to
undrawn debt facilities. In preparation
for the completion of the ARN Regional
acquisition in early January 2022,
the debt facility was accessed in
December 2021 drawing down
$68.0 million.
With the ATO tax matter now behind
us and the acquisition of ARN Regional
from Grant Broadcasters completed,
we expect to maintain debt levels going
forward equivalent to around one to one
and a half times EBITDA, an appropriate
level of gearing that we believe will
provide sufficient flexibility for HT&E
to pursue future growth opportunities
as they arise.
1.
GfK Radio Ratings, S8 2021, SMBAP, ARN AM/FM/DAB,
Mon–Sun 5:30–12mn (cume), p10+.
Hamish McLennan
Chairman
06
CEO’s letter 2021
HT&E delivered a strong performance
in 2021 despite the uncertain environment
and the impact of extended lockdowns.
Full year results were ahead of
expectations and we made excellent
progress in executing our strategy to
build Australia’s best broadcast radio
and digital audio company company.
2021 statutory revenue from continuing
operations significantly improved on last
year, up 15% to $225.0 million, with the
business substantially rebounding from
the impacts of COVID-19.
Costs from continuing operations
before interest, tax, depreciation and
amortisation, and exceptional items
were up 13% to $175.0 million impacted
by cost of sales on improved revenues,
investment in digital audio capability and
one-off cost control measures impacting
the prior period comparative.
EBITDA from continuing operations
before exceptional items was up 21% to
$59.8 million, and operating cash flows
before one-off government subsidies
and income taxes of $34.2 million
grew 51% on the prior period. The
investments in our strategic priorities
are delivering as we continue to build
a media business offering scale of
audience, multi-platform content,
increasing data targeting capabilities
and ease of transaction for our partners.
We are creating increasingly diversified
audio content, growing our total audio
audience base, and launching new and
innovative commercial products for our
advertising partners.
ARN – Defining Audio
ARN’s purpose is to create moments
that move you; for our audiences,
clients and our people. We deliver
Australia’s most complete audio
offering, everywhere our audiences
want to be, with the content they want
to consume. We pride ourselves on
being market-leaders and defining the
industry and we are confident we have
the brands, technology investments and
talent to deliver on this for our listeners,
advertisers and shareholders.
ARN continued to deliver strong
audience survey results across our
metropolitan network throughout 2021
and has maintained the #1 network
position^ for over two years. There was
audience growth across all key markets,
including 97.3FM Brisbane and KIIS101.1
Melbourne which were areas of focus for
the business during the year.
The Sydney duopoly of KIIS and WSFM
continues to deliver with WSFM finishing
#1FM, closely followed by KIIS at #2FM
in the final survey of 2021^^. Our two
powerhouse breakfast shows, The Kyle
& Jackie O Show, and Jonesy & Amanda
finished the year clear leaders in the
Sydney market.
In Melbourne, Gold 104.3FM,
spearheaded by the successful Christian
O’Connell Breakfast Show maintained
#1FM station throughout the year,
now holding that position for sixteen
consecutive surveys^^.
Leading podcast publisher
Consumer appetite for listening to
podcasts continues to accelerate, with
Australians downloading more than half
a billion podcasts in 2021, an increase
of 28% on the previous year1.
ARN remains the country’s #1 podcast
publisher in 2021 after launching the
iHeartRadio Podcast Network Australia
at the start of 2020, a leadership position
we have now held for 21 consecutive
months. Of the top five podcast titles
in 2021, ARN represented four, with
in-excess of 4.8 million combined
monthly listeners and close to 20 million
downloads per month.
Our strategy of representing a range
of local and international podcast
publishers has allowed us to build
internal capability, better understand
consumer podcast listening trends and
scale quickly to meet growing advertiser
demand, while managing investment risk
and returns.
With increasing advertiser demand
delivering consistent monthly podcast
billings to customers approaching close
to $1 million, in 2022 we will launch
several ARN original shows, anchored
back to our highly successful audio
brands. As part of this strategy, we
will continue to trial innovative means,
such as our Podcast to Broadcast
strategy, of delivering quality content
across our multiple platforms including
our exclusive distribution platform –
iHeartRadio.
Connections That Count
Our go-to-market proposition, built
around ‘Connections That Count’, is well
regarded and resulted in numerous
awards for our sales teams across
the year.
We offer clients creative solutions,
powered by an expert team, leveraging
innovative technologies and world first
commercial partnerships with the likes
of TikTok, MTV and New York Times.
In October, we launched Woolworths
enhanced in-store radio experience in
over 1000 of their stores. This innovative
solution uses dynamic audio technology
to tailor programming to suit different
customer demographics, time of day
and geographical locations.
In 2021, we also launched the “ARN
Audio Planner”, an internally developed,
research backed, planning tool
providing marketers and agencies
meaningful insights that maximise
the effectiveness and measurability
of their audio campaigns. The ARN
Audio Planner also leverages cutting
edge research undertaken by our
in-house neuroscientific research team.
Research and data continue to play an
ever-increasing role in the development
of advertising solutions that create
measurable actions with consumers.
HT&E Annual Report 2021 07
2022 focus – well positioned
Amazing people
HT&E has good momentum as we
move into 2022 and the transformative
acquisition of ARN Regional from
Grant Broadcasters represents a great
opportunity for our listeners, clients,
our people and shareholders. We will
be integrating the leading metropolitan
and regional radio businesses to create
a truly national radio broadcast network
of significant scale.
The growth of digital audio will
accelerate, in particular podcasting,
and we will continue to invest in
capability and content to retain our local
leadership position. With increasing
advertiser demand delivering consistent
growth in digital revenues, in 2022 we
will launch several ARN original shows,
anchored back to our highly successful
audio brands.
ARN will relaunch and accelerate
The Edge as a national youth brand
distributed on iHeartradio, broadcast
radio and DAB+, anchored in hip
hop and RnB, driven by content, and
reflective of an under-served genre of
youth culture in commercial radio.
This multi-year investment in the creation
of a new national youth brand marks
an important milestone for ARN as we
continue to build the best broadcast
and digital audio business in Australia,
for all audience segments.
2021 was another challenging year
for the company as we navigated
lockdown restrictions, and the changing
circumstances of our advertisers, whilst
maintaining the broadcast of our content
and dealing with the need to keep our
people safe and well. It is a tribute to our
entire team that we have improved our
overall ratings and revenue performance
with so much uncertainty in their daily
lives during the year.
For us, it has been important to invest
in programs of work that drive culture,
encourage health and wellness and
enable our people through technology
to ensure that they feel fully supported.
We successfully rolled out a number of
initiatives designed to make ARN an
even better and more engaging place
for top talent and I believe HT&E has
emerged as a stronger, better company
ready for 2022.
Finally, I would like to thank our people,
the Board and all shareholders for your
continued support. We have strong
foundations in our business and are clear
about what we need to do to ensure
we deliver the opportunities that are
presented. I look forward to continuing
to work closely with you all.
Ciaran Davis
CEO & Managing Director
ARN Regional: Creating
a national network
The acquisition of ARN Regional from
Grant Broadcasters is a highly synergistic
transaction with a strong cultural fit with
ARN. The acquisition is strategically
compelling, creating a high-quality
footprint across the whole of Australia.
It provides access to increasingly important
and growing regional audiences, enhances
ARN’s ability to deliver content across
multiple platforms and capitalises on the
shift towards digital audio consumption.
Strong national agency opportunities are
expected to be created that will provide
incremental revenue. It supports ease
of transacting for media agencies and
clients through the expansion of reach
and touchpoints with potential to generate
material revenue synergies which we are
already starting to see the benefit of.
Emotive
Emotive, an independent creative
company in which HT&E holds a 51%
stake, significantly expanded its client
base, increasing revenues and earnings.
The business has an enviable client base
with iconic national and international
clients including Optus, Google,
St Hugo, Mount Franklin, Modibodi,
Providoor, wotif, GH.MUMM and the NRL.
EBITDA continues to grow year-on-year
and now exceeds $1.2 million. Increased
client confidence and the strong
reputation the business continues to build,
will see that growth trajectory continue.
Cody Outdoor (Hong Kong)
Cody Outdoor delivered a significantly
improved performance in 2021, after
more than 18 months of subdued
activity, caused by social unrest and
the impact of COVID.
Cody was unsuccessful in its bid to
retain the HK Tramways contract, an
asset it has operated over the past five
years. While the contract represented
~30% Cody revenues, the impact on the
earnings contribution was minimal.
^
Source: GfK Radio Ratings, S5-19 – S8-21,
SMBAP, AM/FM, 0530–2359 Su–Sa, P10+.
^^ Source: GfK Radio Ratings, S8 2021, SMBAP,
M–S 5:30am–12mn, #1 based on Share.
Australian Podcast Ranker, Triton Digital – 2021
Year in Review.
1.
08
Operating and Financial review
This Operating & Financial Review
should be read in conjunction with the
Chairman’s letter and the Chief Executive
Officer’s letter.
Overview
Group revenue increased $29.0 million
on last year, with consumer confidence
and advertising spend in Australia
and Hong Kong recovering from the
severe economic impacts of COVID-19
experienced in 2020.
Total group costs rose $20.2 million or 13%
to $175.0 million, driven largely by higher
cost of sales on improved revenues and
one-off cost control measures impacting
the prior period comparative.
The statutory gain attributable to
HT&E shareholders of $14.8 million
represented a $57.3 million increase
from last year, impacted by exceptional
items in 2020 and 2021.
Underlying group earnings before
exceptional items, interest, tax,
depreciation and amortisation (EBITDA)
increased by $10.5 million to $59.8 million.
Summary of financial performance
AUD million1
Revenue
Other income
Share of profits of associates
Costs
EBITDA2
Depreciation
Amortisation
EBIT3
Net interest expense
Profit before tax
Tax expense
Profit after tax
Less: non-controlling interests
NPAT attributable to HT&E shareholders
Exceptional items net of tax4
NPAT attributable to HT&E shareholders
EBITDA margin
Underlying basic EPS (cents)
Full year dividend per share (cents)
2021
225.0
0.7
9.1
(175.0)
59.8
(13.1)
(0.8)
45.9
(3.5)
42.4
(9.9)
32.6
(3.8)
28.8
(13.9)
14.8
26.6%
10.4
7.4
Change
15%
(66%)
52%
13%
21%
(17%)
(27%)
41%
(8%)
48%
(4%)
77%
24%
87%
(76%)
(135%)
2020
196.1
2.1
6.0
(154.8)
49.3
(15.8)
(1.0)
32.5
(3.8)
28.7
(10.3)
18.5
(3.1)
15.4
(57.9)
(42.5)
25.2%
5.5
–
1. Totals may not add due to rounding.
2. EBITDA from continuing operations and before exceptional items, represents the Group’s total segment result.
3. EBIT from continuing operations and before exceptional items.
4. Commentary on exceptional items is included on page 60 and in note 1.3 to the consolidated financial statements.
HT&E Annual Report 2021 09
Financial position
Group revenue increase
The Group held net assets at
31 December 2021 of $495.3 million,
which were up $3.1 million on prior year
driven primarily by the partial divestment
of HT&E’s stake in Luxury Escapes and
oOh!media limited (OML), offset by the
settlement of the long standing taxation
dispute with the ATO.
On 29 October 2021, the Company
reached a binding heads of agreement
to settle the taxation dispute regarding
the New Zealand branch matter with
the Australian Taxation Office (ATO) for
the total sum of $70.7 million, which was
made up of $56.6 million tax, $5.4 million
penalties and $8.7 million interest.
Additionally, the Company and the
ATO executed a deed of settlement
to settle the Loan Forgiveness matter
for a total of $3.4 million, made up of
$2.9 million tax, $0.3 million penalties
and $0.2 million interest. This amount
owing was settled in January 2022.
The provision for the uncertain tax
treatments recognised in previous years
has been utilised. Refer to note 4.1 to
the consolidated financial statements
for more information.
During the period, the Group also
disposed of its 4.7% interest in
local outdoor advertising company,
oOh!media Limited (OML) for
$49.2 million, representing a before
tax gain of $31.1 million on our
initial investment.
+$29.0m
$225.0m
2020
2021
$196.1m
$225.0m
Podcast downloads
#1position
Underlying drivers of
performance
Group revenues rose $29.0 million, with
improved consumer sentiment and
advertiser confidence contributing to
materially higher revenues across the
HT&E Group in the period.
ARN’s market leading and consistent
audience survey results across the network
combined with our enviable #1 position
in podcast downloads provided a strong
platform to drive commercial revenue
growth in the period^.
Revenues in the prior period were
significantly impacted by the economic
effects of the government enforced
lockdowns to contain the spread of the
COVID-19 global pandemic.
Group costs from continuing operations
before interest, tax, depreciation and
amortisation, and exceptional items
were up 13% to $175.0 million, with the
prior period impacted by one-off cost
measures taken in response to subdued
economic activity in 2020. Higher
variable cost of sales on improved
revenues and continued investment in
digital audio capability also contributed
to the increase in the current period.
Segment earnings before interest, tax,
depreciation and amortisation (EBITDA)
from continuing operations and before
exceptional items were up 21% from the
corresponding period.
Depreciation and amortisation
decreased from $16.8 million to
$13.9 million, impacted by a part
impairment in June 2020 of advertising
concession right of use assets held by
Cody Outdoor. This resulted in EBIT
from continuing operations and before
exceptional items of $45.9 million
compared with $32.5 million in the
prior period, and net profit after
tax attributable to shareholders,
before exceptional items (NPAT) of
$28.8 million.
Details on the exceptional items
totalling $13.9 million (net of tax) in the
current period are included in note
1.3 and note 4.1 to the consolidated
financial statements.
^
Source: CRA and Triton, Australian Podcast
Ranker: Dec 2021 of the participating publishers.
Combines ARN/iHeartMedia with Audioboom.
Patrina Jones, Christian O’Connell & Jack Post – Gold 104.3FM
10
Operating and Financial review continued
Cash flow generation
AUD million1
Operating cash flows and lease payments2
Tax payments and receipts3
Government subsidies
Cash flow from operating activities and lease payments
Investing cash flows4
Borrowings
Short-term deposits
Dividends paid to shareholders
Share buy back
Other financing cash flows
Cash at the beginning of the year
Effect of foreign exchange of the year
Cash at end of year5
Short-term deposits
Bank loans
Net cash
2021
34.2
(9.8)
–
24.4
70.6
65.0
50.0
(9.7)
(5.0)
(3.3)
65.1
0.0
257.1
–
(68.0)
189.1
2020
22.7
3.1
10.7
36.4
(15.4)
3.3
(50.0)
(12.8)
(2.9)
(4.2)
111.0
(0.2)
65.1
50.0
(2.9)
112.1
Change $
11.5
(12.9)
(10.7)
(12.0)
86.0
61.7
100.0
3.2
2.1
0.9
(45.9)
0.2
192.0
(50.0)
65.1
77.0
1. Totals may not add due to rounding.
2. Operating cash flows, plus principal repayments on finance leases accounted for under AASB 16 Leases from 1 January 2019.
3. 2020 includes $3.2 million pertaining to a financing arrangement involving the Company’s former New Zealand operations was settled with the ATO.
4. 2021 includes proceeds from the disposal of OML and Luxury Escapes investments. Excluding amounts transferred (to)/from short-term deposits.
5. Excludes amounts held in short-term deposit with banking institutions.
HT&E Annual Report 2021 11
An interim dividend was declared
of 3.5 cents per share. The Group’s
dividend policy, to distribute between
60% and 80% of net profit in a normal
year, reflects the highly profitable and
cash generative nature of the Group.
A final dividend of 3.9 cents per share
was declared for 2021 and is payable
on 23 March 2022.
The accretive on-market share buyback
continued throughout much of the year,
with over 3.0 million shares bought back
at an average price of $1.66.
The buyback has been put on-hold
following the acquisition of ARN
Regional and the reset of the Group’s
capital structure.
Cash and capital management
The balance sheet remains strong
with net cash of $189.1 million as at
31 December 2021. $68.0 million was
drawn from existing debt facilities just
prior to 31 December 2021 to fund a
portion of the ARN Regional acquisition
on 4 January 2022. HT&E retains
debt facilities totalling approximately
$260 million with good remaining tenure.
With a settlement agreement reached
with the ATO on the New Zealand
Branch matter, and the acquisition of
ARN Regional completed, the Group
expects to maintain debt levels of
between one and one and a half times
EBITDA, considered an appropriate
level of gearing, providing flexibility
for HT&E to pursue future growth
opportunities as they arise.
Operating cash flows and lease
payments increased by 51%
to $34.2 million, impacted by
substantially improved underlying
business performance.
The Ali Clarke Breakfast Show – Mix 102.3 Adelaide
12
Review of operations
ARN’s ratings and commercial success
continued in 2021 and the company
remains the best performing audio
business in Australia.
ARN (Australian Radio
Network)
Delivering the future needs
of audiences and advertising
partners
In 2021 our branding evolved, with
the business officially farewelling the
“Australian Radio Network” brand after
many years, replacing it with “ARN”.
Under its new name, ARN continues
to power the KIIS, Pure Gold and The
Edge networks with the world’s best
talent who connect with Australians
nationwide, while further serving
up the greatest range of local and
international radio, music and podcast
content in digital formats via the
iHeartRadio platform.
Our strategic intent remains to build the
best broadcast radio and digital audio
business in Australia and offer audiences
and advertisers a gateway to develop
deeper connections in the booming
world of audio, by delivering on our
three pillars for growth.
Three pillars for growth
1. Live and local content
delivered by Australia’s
best talent, and supported
by brands that people know
and trust.
2. Distributed across our
comprehensive network of
broadcast radio stations
and on iHeartradio,
Australia’s most established
digital audio platform.
3. Commercialised through
a suite of innovative,
data and technology led
products and partnerships.
Sydney
Melbourne
Brisbane
#1 broadcast ratings position
maintained1
Strength in audience survey results
across our metropolitan network
continued throughout 2021, with ARN
having maintained the #1 network
position2 for over two years. Pleasingly,
we delivered audience growth across all
key markets, including 97.3FM Brisbane
and KIIS101.1 Melbourne; both stations
were areas of focus for the business
during the year.
The Sydney duopoly of KIIS and WSFM
continues to deliver for ARN, with WSFM
finishing #1FM, closely followed by KIIS
at #2FM in the final survey of 20213. Our
two powerhouse breakfast shows, The
Kyle & Jackie O Show, and Jonesy &
Amanda vied for top position, with both
shows finishing the year clear leaders in
the Sydney market.
In Melbourne, Gold 104.3FM, spear
headed by the successful Christian
O’Connell Breakfast Show maintained
#1FM station throughout the year,
holding that position for sixteen
consecutive surveys, with more listeners
than any other Melbourne station. On
KIIS 101.1, we launched a new breakfast
show midway through the year, Jase &
Lauren In The Morning, which continues
to build well and will remain a key
priority of the business in 2022.
In Brisbane, the team on 97.3FM
demonstrated consistent improvement
throughout the year, finishing the final
survey as #1 overall station, their best
result since 2019, underpinned by the
Robin, Terry and Bob breakfast show
which also finished #1FM Breakfast.
After almost 50 years working in radio,
Bob Gallagher finished up with 97.3FM
in 2021 and in 2022 we welcome Kip
Wightman to the breakfast team3.
In addition, we are excited to launch
The Ali Clarke Breakfast Show in
Adelaide, welcoming experienced
announcers, Ali Clarke and Eddie
Bannon to the Mix102.3 team, partnering
with Erin Phillips.
#1FM
#1FM
#1FM
HT&E Annual Report 2021 Investment in people delivering
improved commercial
performance
Investment in our people is part
of our DNA and during the year
we implemented a new employee
behaviours framework titled “Culture
in Action” and a refreshed Employee
Valued Proposition (EVP).
We want to advance the right
behaviours to support equity, inclusion,
diversity and belonging, and create a
workplace environment that enables our
people to do their best work and make
a difference.
Our focus on recruiting and retaining the
best people continued to deliver results,
with ARN growing commercial share
across the year. The business also achieved
strong and improved performance in two
key industry measures, being the bi-annual
Media-i Industry Survey (Media-i) and
the annual Australian Commercial Radio
Awards (ACRAs).
The Media-i survey provides an
important perspective on key attributes
of our commercial offering relative to
our audio peers through sampling over
2000 media agency professionals. On
the most important measure, the Net
Promoter Score (NPS), ARN ranked #1,
a noteworthy achievement for our entire
team and testament to the investment
we continue to make in people, product,
and process.
Our people also achieved significant
industry recognition at the ACRA’s and
our best ever results with 62 nominations
across 39 categories, delivering 16 awards.
Leadership position in
podcasting maintained
Consumer appetite for listening to
podcasts continues to accelerate, with
Australians downloading more than half
a billion podcasts in 2021, an increase of
28% on the previous year4.
ARN remains the #1 podcast publisher in
Australia after launching the iHeartRadio
Podcast Network Australia at the start
of 2020, a leadership position we have
now held for 20 consecutive months
to the end of December 2021. Of the
top 10 most listened to podcast titles,
ARN represented four, with in-excess
of 4.8 million combined monthly
listeners and close to 20 million monthly
downloads. The Kyle & Jackie O Show
podcast remains the #1 radio catch-up
podcast in the country with close to
17 million downloads across the whole
of 20214.
Our strategy of representing a range
of local and international podcast
publishers has allowed us to build
internal capability, better understand
consumer podcast listening trends and
scale quickly to meet growing advertiser
demand, while managing investment risk
and returns.
With increasing advertiser demand
delivering consistent monthly podcast
billings to customers approaching close
to $1 million, in 2022 we will launch
several ARN original shows, anchored
back to our highly successful audio
brands. As part of this strategy, we will
continue to trial innovative means, such
as our Podcast to Broadcast strategy,
of delivering quality content across our
multiple distribution platforms, including
broadcast and on iHeartRadio, and to
engage our audiences whenever and
wherever they are.
13
Audio is booming and ARN
is defining it
Audio in Australia is booming and, as
the first to deliver the most complete
solutions for advertisers through ARN’s
Audiosphere, we pride ourselves on
being market-leaders, defining the
industry. We offer our clients the best
creative solutions, powered by an expert
team, leveraging innovative technologies
and world first commercial partnerships.
For advertisers, ARN’s audio solutions
seek to leverage the whole Audiosphere,
providing audio entertainment,
experiential connections, audio
messaging, dynamic creative and
campaign amplification. Our approach is
focused on delivering greater returns on
advertising investment for our clients, with
campaigns that hit the right audience, with
the right message, every time.
In 2021, we launched the “ARN Audio
Connections Planner”, an internally
developed, research backed, planning
tool providing marketers and agencies
meaningful insights that maximise the
effectiveness and measurability of
their audio campaigns. The ARN Audio
Connections Planner also leverages
cutting edge research undertaken by
our in-house neuroscientific research
team, with research and data playing an
ever-increasing role in the development
of advertising solutions that create
measurable actions with consumers.
Further expanding the breadth of our
audio services, in 2021, we teamed up
with Woolworths, a key commercial
partner of ARN, to introduce an
enhanced in-store radio experience
in over 1000 Woolworths stores. This
innovative solution uses dynamic audio
technology powered by Adswizz to
customise programming to suit different
customer demographic, time of day and
geographical locations.
Additional commercial partnerships are
part of our path for growth, and we are
currently exploring relationships with a
number of significant brands.
1.
Source: GfK, S8-2021, SMBAP, 05:30–23:59, P10+, AM/FM/DAB+,
Based on Share.
2. Source: GfK Radio Ratings, S5-19 – S8-21, SMBAP, AM/FM, 0530–2359
Su–Sa, P10+
3. Source: GfK Radio Ratings, S8 2021, SMBAP, M–S 5:30am–12mn,
#1 based on Share.
4. Australian Podcast Ranker, Triton Digital – 2021 Year in Review.
ARN Regional acquisition
+46 +26
radio stations
markets
Cody Outdoor full year
revenue increase
+32.5%
14
Review of operations continued
Looking forward
Acquisition of ARN Regional
from Grant Broadcasters
In early January 2022, we completed
the acquisition from Grant Broadcasters,
Australia’s oldest, family owned and
most successful regional radio business
for $307.5 million, encompassing a
portfolio of 46 radio stations, with
heritage brands, across 26 markets and
many high growth regions.
This acquisition represents a rare
opportunity to bring the leading
metropolitan and regional radio
businesses together to create a truly
national radio broadcast network of
significant scale, with a presence in
every state and territory in Australia. The
combined network will be made up of
58 stations, across 33 markets, delivering
innovative, digitally enabled commercial
solutions at the scale advertisers seek.
The acquisition will unlock new growth
markets and audiences, with the
potential for significant digital audio
expansion through an accelerated rollout
of ARN’s established iHeartRadio digital
audio platform into regional areas.
The acquisition of ARN Regional
will provide our clients the ability to
access more than a third of Australian
consumers and is expected to result in
material revenue synergies for ARN of
up to $20 million per annum within three
years of completion.
It also creates new opportunities for
our people to develop and grow their
careers through a larger, more diverse
business, and for shareholders, the
acquisition is immediately accretive,
before synergies, and like ARN is a
highly cash generative business.
Relaunch of The Edge as
a national youth brand
In early 2022, we will relaunch and
accelerate The Edge as a national youth
brand distributed on iHeartRadio,
broadcast and DAB+, anchored in hip
hop and RnB, driven by content, and
reflective of an under-served genre of
youth culture in commercial radio.
We will work with the Australian music
industry to create a platform to support
artists, labels and promoters, while
building a community of passionate
music fans.
This multi-year investment in the creation
of a new national youth brand marks
an important milestone for ARN as we
continue to build the best broadcast and
digital audio business in Australia.
Hong Kong Outdoor
(Cody)
Cody Outdoor experienced significantly
improved trading conditions in 2021,
following two years of subdued economic
activity after a period of social unrest in
late 2019 and the impacts of COVID-19 in
2020. Full year revenues for the business
increased 32.5% to $21.9 million, back
only 12.0% on 2019 performance.
Cody was unsuccessful in its bid to
retain the HK Tramways contract, an
asset it has operated very successfully in
partnership with HK Tramways over the
past five years. The contract ends in May
2022 and while it contributed approx.
30% to Cody’s total revenues, the
earnings contribution was minimal.
Cody continues to operate a network
of profitable tunnel advertising
contracts, including the Eastern and
Western Harbour Tunnels, Tai Lam
Tunnel, Tate Cairns Tunnel and a number
of smaller assets.
The acquisition of ARN
Regional will unlock
new growth markets
and audiences, with the
potential for significant
digital audio expansion.
HT&E Annual Report 2021 15
Jonesy & Amanda – WSFM 101.7
Soprano has increased its investment
in R&D and portfolio diversification to
drive customer acquisition and retention.
The Global CPAAS market fundamentals
remain strong and are expected to
grow from ~US$6.5 billion in 2021 to
~US$21.8 billion in 20252.
Following the decision by the Soprano
shareholders to terminate negotiations
to complete the sale of Soprano to
Link Mobility Group Holdings AS (“Link
Mobility”) in September 2021, the
business remains focused on increasing
product usage by existing customers,
upsell of products and services,
acquiring new customers and MNO
partners, innovating on the Soprano
product and re-examining immediate
inorganic growth opportunities for
mergers and acquisitions.
Emotive
Emotive, an independent creative
company in which HT&E holds a 51%
stake, had a very successful 12 months
significantly expanding its client base,
increasing revenues and earnings.
The business is navigating well in the
operational challenges presented by
COVID, producing large scale advertising
campaigns for its clients. Emotive works
with a growing number of iconic national
and international clients including;
Optus, audible, Google, St Hugo, Mount
Franklin, Modibodi, Providoor, wotif,
GH.MUMM and the NRL.
Emotive offers the full breadth of
creative services, including production,
content distribution, strategy, creative
and design.
Investments
Soprano
Soprano, an independent software vendor
in which HT&E has held a 25% stake since
2001, again delivered record revenue,
gross margin and earnings growth.
The Company, with established
operations in Europe, North and South
America, Asia and Australia, provides
CPaaS (Communications Platform as a
Service) to enterprise customers through
long term strategic partnerships with
MNO’s (Mobile Network Operators) and
direct to clients.
Soprano maintained its recent strong
financial performance for the year
ended 31 December 2021 with pro
forma revenues1 growing by 22%
to $119.5 million, driven by organic
growth and the Silverstreet acquisition
in December 2020, while pro forma
underlying EBITDA1 increased 11%
to $30.2 million.
2020 underlying pro forma financial information reflects Sillverstreet acquisition as if it had been acquired on 1 January 2020.
1.
2. IDC Market Analysis Perspective Report – Worldwide Communications Platform as a Service, 2021.
16
Our people and culture
Our Culture in Action helps us
focus on not just what we do,
but also how we do it.
We began by inviting all our people
to give feedback on the current
culture using the Human Synergistics
Organisational Culture Inventory (OCI)
and Organisational Effectiveness
Inventory (OEI) tools. This showed
areas of strength and opportunity, from
which a plan was developed to shape
our culture.
So that our people were able to
understand what a constructive culture
looks like in practice we developed and
implemented our Culture in Action (CIA)
behaviours framework. The CIA helps
guide and shape both individual and
collective mindsets and actions and is
being embedded in all we do.
One outcome of a constructive culture is
an inclusive workplace where a diverse
range of people are treated equitably,
feel like they belong and can be their
best selves. Our aspiration is for the
people working in and with our business
to be reflective of the environments in
which we operate.
Our CIA supports our aspiration.
For example, Be Your Best Self
includes a call to “create an inclusive
environment where there is a sense
of community and belonging”, whilst
Make a Difference is defined as “We
look for every opportunity to improve
and we seek out diverse perspectives to
help us achieve that.”
Over the course of 2021, we have
invested in developing a clear strategy
for building a more constructive culture
to ensure ongoing business success.
A constructive culture allows people
to do their best work as:
– They have clear accountabilities
and goals, ensuring a true sense
of purpose,
– Their job is designed to leverage their
skills and experience,
– They are trusted to do good work and
are given a level of autonomy in where
and how it is done,
– Their leader is a supportive coach who
provides regular feedback,
– They feel recognised and rewarded
for their contributions, and
– They work in a friendly and
collaborative environment and have
a strong sense of belonging.
Culture in Action (CIA)
behaviours framework
Creating moments
that move you
Aim High
We set big goals and work
together to achieve them.
Own It
We take personal
responsibility for our
actions and have a solutions
mindset.
Make a Difference
We look for every
opportunity to improve
and we seek out diverse
perspectives to help us
achieve that.
Be Your Best Self
We create the environment
we need to thrive.
HT&E Annual Report 2021 17
The Culture in Action
helps guide and shape
both individual and
collective mindsets and
actions and is being
embedded in all we do.
Monty, Yumi & Kate – KIIS Network
We are proud of the fact that 52% of
our employees are female, with 41% of
people leadership roles being held by
women. We have processes in place
to review, report and manage any
potential gender pay inequality. Over
the next year, we will establish a clear
roadmap for achieving equal gender
representation in leadership roles and
closing any identified gender pay gaps.
Whilst gender equity is important, we
are striving for more than just gender
diversity. In addition to targeting
52%
41%
Female employees
Women in leadership
50% female representation in our newly
established leadership groups, we also
ensured they had diverse representation
from a functional, location, and
background perspective to enable
diversity of thought.
We know that life is busy and getting
more complex for our people. Many
want choice about where, when, and
how they work to thrive in both work
and life. We believe in the power of
quality connections and know that our
people want an inclusive workplace,
where they can feel they belong, to go
and collaborate with others. So, we are
supporting people to work with their
leaders to agree how they will work
in a way that allows them to be their
best self and thrive, whilst ensuring
no negative impact on the people they
need to work with or the business.
That way we ensure the best outcomes
are achieved for our listeners, our
clients, and each other!
Our EVP
Make quality connections
Our focus on setting big goals
and achieving them has meant
we attract the leading talent in
audio and through out work,
we make quality, immediate
and fun connections with
our audiences. We got here
by owning our outcomes,
and bringing a diversity of
viewpoints to the table.
Share your voice
ARN isn’t a workplace, it’s a
community, with a leadership
group that makes a hands-on
contribution to our success.
We’re diverse, energetic,
and passionate – and your
voice counts.
Shape the future of audio
We’re shaping a listening
future that’s richer, smarter
and more powerful than
ever before. We need people
who want to work together
to achieve big goals, bring
new ideas, take ownership of
outcomes, and embrace new
technologies.
18
Our people and culture continued
The Executive Leadership Team (ELT)
and ARN SLT (circa 40 leaders), were
the first cohort to complete our new
leadership programme. Run over a
12-week period, the virtual workshops
were supported by a broader leadership
ecosystem comprised of learning bites
and toolkits to provide on-the-job
learning and experience. The content
was designed to deepen capability
across the key areas of:
– Leading Self – I know and actively
develop myself
– Lead Others – I understand my
leadership impact and can get the
best out of others
One of the key elements of the
programme was providing these leaders
with the opportunity to experience the
Human Synergistics Life Styles Inventory
(LSI). The Human Synergistics circumplex
is part of the suite of tools and provides
a way to see, measure and change the
thinking and behavioural styles proven
to drive performance at individual, group,
and organisational levels. The LSI is
designed for self-development purposes
and leverages the circumplex to measures
the way people see themselves and the
way others see them in respect of
the 12 styles.
The LSI was used to help our leaders
understand how their thinking aligns
to our aspirational culture; their current
strengths and opportunities to be more
effective. With support of an accredited
coach, these insights were leveraged to
create an individual development goal.
The remainder of our people leaders
will experience this program in 2022.
We will also build further signature
programmes to support peoples’
growth and career paths.
Deepening our people’s
capability
A key focus in 2021 was investing
more in the capability of our people, in
particular our key leaders. Our leaders
are the biggest influencers of our culture,
and depth of leader capability is vital to
our ongoing business success.
Our approach was multi-faceted. Along
with formal learning, we established
various ways to provide leaders with the
opportunity to take on more formalised
business leadership roles. This included
establishing a Senior Leadership
Team (SLT) and Market Leadership
Teams (MLTs) aligned to ARN’s key
metropolitan markets.
A key focus in 2021
was investing more in
the capability of our
people, in particular
our key leaders.
Lead Self
Lead Others
Lead Teams
Lead ARN
I know & actively
develop myself
– I actively engage in my
own development
– I leverage my strengths
– I understand leadership
vs management
– I communicate with
impact
I understand my
leadership impact &
can get the best out
of others
– I understand my impact
on others
– I coach, support and
develop others
– I lead through strengths
– I engage in productive
conversations
I can build & lead
effective teams
– I build and lead high
performing teams
I know & can lead
the business
– I understand and align my
team to our strategy
– I build and maintain
– I shape our culture
productive relationships
– I foster psychological
safety to increase team
performance
– I plan for and lead change
HT&E Annual Report 2021 19
The health, safety and
wellbeing of our people
remains a key priority
The challenges of operating in a
COVID-19 impacted environment
continue, so we have invested in
additional programmes to support
people. We made sure to comply with
the various government requirements
to keep our people safe and support
their wellbeing.
Whilst we respect that vaccination
is an individual choice, we strongly
encouraged our people to get
vaccinated to protect the health
and wellbeing of themselves, their
colleagues, and the community. To that
end, we pledged our support to The
Great Aussie Vaccine Drive and provided
all employees with access to paid
vaccination leave.
During R U OK? Day and the following
weeks, we drew attention to the impacts
on our people’s mental health from the
uncertainty caused by COVID-19 and
lockdowns. A model for proactively
managing personal wellbeing – The 5
Ways to Wellbeing, and the LifeWorks
wellness app, were shared to provide
tips and tools to navigate this difficult
time. Our Market Leadership and
ARNSocial teams across the country also
ran local initiatives to drive connection
and positivity.
HT&E strives to proactively manage
workplace health, safety, and wellbeing
risks. In 2021 we updated our Workplace
Heath and Safety Management System
(WHSMS), which contains all the policies,
procedures and tools to ensure a
safe and healthy work environment.
Key features of the updated WHSMS
include online forms to make it easier to
report hazards or incidents, improved
processes for managing investigations
and risks, and enhanced tools for our
Workplace Health & Safety Committees
so they can proactively monitor and
manage risks.
Pleasingly, we continued our strong
safety performance, recording no serious
incidents and maintaining industry low
incident rates.
Will & Woody – KIIS Network Drive
20
Environmental, Social
& Governance (ESG)
As well as understanding the importance of
our people, HT&E recognises its corporate
social responsibilities, including environmental,
social and governance factors. The following
generally applies across the group, though with
a focus on ARN as our major business.
Community Service
Announcements
6.2m
Impressions
39,000
Radio spots
$7.4m
Promotional value
Environmental
Our assessment is that as a radio
and digital media company, our
environmental impact is generally
relatively low. We recognise however
the significant importance of measuring
and reducing our carbon footprint.
We empower our people to take
responsibility for how they act towards
the environment and enable individual
teams to implement their own initiatives.
Some examples of how this manifests are:
– Waste: across the majority of sites we
introduced split recycling options for
waste and removed individual desk
bins to encourage usage. In addition,
each office has a cardboard recycling
bin service.
– Energy saving: in newer sites lighting is
motion activated, limiting unnecessary
energy wastage.
– Asset usage: all printers are ‘scan’ for
use only and display the cost of the
print job. This prevents over printing
and drives awareness of the cost of
the asset.
– Responsible Journalism: responsible
reporting of environmental issues
and news.
– Carbon footprint: We will commence
measuring our carbon output in 2022,
to be followed by carbon reduction
initiatives.
Social
Social factors include the employee
goals on diversity as described in the
section above on Our People & Culture.
Furthermore, as a media broadcaster,
ARN is in a unique position to support
a broad range of social issues through
a variety of activities. These include the
provision of goods and services for the
betterment of our community, charitable
contributions and education of both our
team and the audiences we broadcast to.
Community Service
Announcements
Throughout 2021, we supported
116 different community service
organisations through the provision of
airtime and digital inventory to promote
their cause.
The organisations supported were
deemed important to the communities
we broadcast to and ranged from
medical organisations to animal welfare
and community safety. They included:
– The Big Issue
– Pedestrian Council of Australia -
National Walk Safely to School Day
– Foodbank
– RSPCA
– Stillbirth Australia
– R U OK?
We delivered over 6.2 million
impressions and 39,000 radio
spots which equates to over $7.4m
in promotional value for these
organisations.
HT&E Annual Report 2021 21
Vaccination drive
68
Media stories across
July and August
+350
Social posts across our network
+$2.1m
Total PR value
The key talent-led vaccination support
was picked up by the press, resulting in
68 media stories across July and August
with a total PR value of $2.1 million.
In addition, we produced a significant
amount of content relating to the drive
including:
– 19 interviews involving the Prime
Minister, State Premiers and Health
Ministers
– Engaged professionals and friends of
the stations, such as Dr David Muller
for commentary
– Ran major on-air tactics such as
KIIS1011’s ‘Cash Injection’ – an entire
contest talking up the importance of
getting vaccinated and linking a cash
incentive to do so
– Delivered over 350 social posts across
our network – covering key milestones,
facts and celebrating each step made
closer to our target vaccination rates
And of course, we delivered countless
News Bulletins providing daily updates
based on the Government’s health
advice. Typically, we broadcast 120 news
updates per week – and this year made
a commitment to keep things positive
for our listeners – with a special focus
on community led information (such as
where to receive jabs) and celebrating
each step closer to ‘freedom’ together.
We also engaged in a media campaign
via Rock Posters across Melbourne, to
support the cause.
Public health initiative:
vaccination drive
Given the far-reaching impact of the
COVID-19 pandemic along with the
social and economic importance of
facilitating a ‘return to normal’ for our
community, we chose to overtly support
the Australian Government’s public
health initiative for vaccination.
Since July 2021 we delivered over $4m
value in unpaid vaccination support
including commercial airtime, the
creation of pro-vaccine content and
the rallying of our influential talent to
encourage participation in the initiative.
Notably:
– Kyle Sandilands created a rap video;
‘Get Vaxxed Baby’ (to the tune of
Vanilla Ice’s Ice Ice Baby) which was
endorsed by NSW Health Minister
Brad Hazzard in the daily press
conference and recognised by Prime
Minister Scott Morrison:
“Congratulations guys, I love ‘Get
Vaxxed Baby’. I said it to my kids last
night and they loved it too so we’ve
been in touch with the Marvel people
we are going to open a franchise in
your name – Vaxx Man.”
– The Edge talent in Sydney received
both of their Astra Zeneca shots
live on air
– Erin Philips, of Adelaide’s Mix1023
created her own 30 second ad in
one night which was then endorsed
by the South Australia Premier,
Steven Marshall
– Sydney’s KIIS1065 newsreader
Brooklyn Ross created his own social
video helping combat concern in the
community around AZ
– Brisbane’s 97.3FM breakfast team
created their own Taylor-swift
inspired jingle
Kyle Sandilands – ‘Get Vaxxed Baby’
22
Environmental, Social & Governance (ESG) continued
Habitat For Humanity Charity Day
“We felt so fortunate to be able
to participate in the renovation of
temporary housing for victims of
domestic violence. It was gratifying,
humbling and provided a good dose
of perspective amid the day to day
bustle. We both went home and hugged
our kids a little bit tighter that night.”
Tegan Kirkby & Lauren Joyce.
Organised activities
Largely facilitated by our ‘Social
Teams’ in each market, our people are
encouraged to work together to support
their chosen charities. In 2021 some of
these activities included coordinated
ARN teams for:
– Movember – raising $1,330
– AusMusic T-Shirt Day
Beyond organised charities, our people
support and give back to one another.
One example is that for all staff who
went on parental leave between June
and December 2021, ARN ‘Social’ gifted
them with a six-month supply of nappies
as the ‘ARN Social Baby Bonus’. Similarly
when a much loved employee suffered
some misfortune, the team coordinated
over $5,000 worth of meals to support
her through the period.
On Air Activities
Throughout the year, each of our
stations ran campaigns that benefited
the communities they serve. We use the
power of our talent and radio’s unique
ability to give voice to its audience, to
tell the stories that need to be heard.
From Kyle & Jackie O furnishing an
apartment for a homeless listener who
had recently secured accommodation,
to Jase & Lauren funding a listener’s
desperate need to visit family in
Queensland, the on-air support comes
in many shapes and sizes.
RU OK Day
KIIS1065 and KIIS1011 went silent for
10 seconds every hour and encouraged
listeners to use that silence to ask each
other ‘R U OK?’
Sydney Sick Kids Appeal – WSFM
Throughout June, WSFM ran a campaign
valued at $51,087 featuring Jonesy
& Amanda, encouraging listeners to
donate to the Appeal. All elements of
the campaign included a call to action
for listeners to donate to the Sick Kids
Appeal across June. Over $3.1 million
was raised through the Appeal.
NSW Floods
Kyle & Jackie O teamed up with LG to
help the people who had lost everything
as a result of severe flooding in NSW.
They were able to help three families
by giving away over $100k worth of LG
products to help these families get back
on their feet.
A registry page was also set up on the
KIIS 1065 website which created an
avenue to connect directly with the
people who needed the help. LG and
the KIIS team helped over 15 families
across the period.
Christian O’Connell’s ‘We’ve Got
Your Back’
Christian ran an on-air fundraiser to
raise money for the charity Backpacks
4 Vic Kids. The team set a goal to
raise $1500 for 20 backpacks full of
essential items, toys, hope and love for
displaced children (often removed from
a dangerous home with nothing more
than the clothes on their back).
Listeners donated over $100k in the
first 24 hours and 72 hours later the
final figure raised was $274,033.
Disaster reporting
The ARN news network is committed
each day to responsible journalism –
through accuracy, independence and
ethical reporting and a focus on localism.
The news broadcast on ARN stations is
local and has a focus on the stories that
matter to communities. During times of
crisis, such as the Covid-19 pandemic;
ARN journalists have been a trusted
source of news -providing regular,
breaking updates seven days a week.
During times of emergencies, and when
there is an increased demand for news,
we adapt accordingly and broadcast
more news. An example of this is the
regular news schedule for WSFM is
half hourly news in breakfast from 5am
and then every hour from 9am to 7pm.
During the Sydney COVID related
lockdown of 2021, we broadcast news
every half hour across the drive daypart
to ensure our listeners were informed.
Charitable behaviours and
donations
At ARN we encourage people to
participate in the charitable activities
that will help them ‘be their best selves’.
Both through organised activities and
‘charity days’, allowing people the time
to contribute, there are many avenues
for people to get involved in a way that
suits them.
Charity Days
Salvation Army Street Level Mission –
Surry Hills
“I’m so grateful to ARN for allowing me
to have this charity day – it changed
my life and I know by me volunteering
it changes the lives of others. This
Christmas morning I’ll have a thought for
all the children who I helped pack and
give Xmas presents to this year.“
Karen Harris, Strategy Manager.
$100k
worth of LG products
given to families effected
by NSW floods
Kyle & Jackie O supporting NSW flood victims
HT&E Annual Report 2021 23
Partnerships
ARN is a long time partner of UnLtd; a
social purpose organisation connecting
the media, marketing and creative
industries with charities helping children
and young people at risk. Through
this partnership our people can learn
about the work of relevant charities
and contribute their time and expertise
through a series of events across the year.
In 2021 ARN;
– Engaged 52 participants in 11 events
across all metro markets
– Sponsored five activations across 3 x
golf days and 2 x soccer tournaments
– Supported Sam Harris’ (Melbourne
Sales Director and Market Lead)
appointment to the Melbourne Board
of UnLtd
– Made a ~$55,000 contribution to
Unltd along with $191,123 value in
media airtime
– Played a critical role in raising
$284,000 across the cricket, 3 Peaks
(hiking) and golf events
As part of the UnLtd Partnership ARN
specifically supports Musicians Making A
Difference (MMAD), an Australian charity
that transforms young lives through
music. In 2021, we embraced October
15th to help deliver the organisation their
most successful MMAD Day to date.
MMAD Day is a national awareness
day that aims to reach young people
through the power of music. The theme
for 2021 was #thissongisforyou and
asked everyone to dedicate a song and
positive message on social media along
with the hashtag.
ARN representatives at UnLtd Sailing Event
Charitable behaviours
and donations
$284k
Raised across the cricket,
3 Peaks (hiking) and golf events
$1,330
Raised for Movember
$230k
Campaign to support
MMAD Day
We created a campaign valued at
$230,000 that spanned consumer and
trade audiences to support the cause.
It included:
– A bespoke iHeartRadio MMAD Pop
Up Station that utilised several key
artists, including Joel Corry to deliver
short testimonials and IDs to run on
the station
– iHeartRadio eDM sent to 820,000
people, delivering 46,600 clicks
– Talent alignment with Yumi Stynes
who delivered on air liners, 30 second
promos and social content
– FM Radio support to deliver the
MMAD message at scale
– Trade Marketing support across trade
publications MediaWeek, AdNews,
Radio Today and The Music Network,
ARN social platforms and eDMs
– Team and client engagement through
an exclusive virtual performance by
Chang Po-Ching
– A $5,000 donation to MMAD
As a result of the campaign MMAD
experienced 13,000 interactions on the
‘Get Help’ website page on MMAD Day
alone and a total campaign reach of
13.1 million people worldwide.
24
Environmental, Social & Governance (ESG) continued
Governance
The Company’s long-term success
requires strong governance, across both
corporate and media areas of operation.
Corporate Governance
The documents that provide detail
on the Company’s corporate
governance are available at
htande.com.au/corporate-governance/.
The corporate governance principles
are set out in the Corporate Governance
Statement and the Code of Conduct.
Charters exist to guide the Board,
the Audit & Risk Committee and
the Remuneration, Nomination &
Governance Committee.
The Company also has detailed
policies regarding Market Disclosure,
Risk Management, Securities Trading,
Whistleblowers, Fraud, Diversity and
Modern Slavery.
ARN understands the significance of
the news, current affairs and emergency
information that it broadcasts to its
audiences and the critical role of news
information in contributing to civic life,
political engagement and an effective
democracy. The company is committed
to the delivery of a trusted news service
that can be relied upon as a timely
and credible source of information. At
peak times, bulletins are compiled and
broadcast half hourly by its radio stations
in order to bring the most up to date
news to its audiences. News content
is provided by HT&E across a variety
of settings including breaking news of
national and international significance
across its national footprint, delivering
critical emergency information targeted
to a particular State or geographical
region or providing a daily information
service that contributes to sense of
connection and participation for local
communities in relation to the activities
and events in their local area. The
company understands the importance
of trust and accountability, and its
journalists are dedicated to providing
news without political agenda or
commercial influence.
Media Governance
ARN takes its obligations as a provider
of news content to its audiences and the
Australian community, very seriously.
We operate under strict editorial
controls to ensure fair representation
and accuracy of information. The
company has an experienced
compliance function, with expertise
in regulatory and pre-publication
review including defamation, content
regulation, privacy and anti-surveillance,
advertising restrictions and consumer
protection legislation. News and current
affairs content is carefully monitored
to prevent the dissemination of
misinformation to audiences.
ARN is committed to ethical journalism
– news content produced by our
journalists is subject to both the MEAA
Code of Ethics and the Commercial
Radio Code of Practice requiring
high standards of integrity, honesty,
independence and impartiality.
Digital content is carefully moderated by
online content producers, and vetted to
ensure published material meets ARN’s
online news policies and legislative
requirements that govern news content.
ARN is a participant in the ACMA’s
co-regulatory complaints handling
framework which ensures accountability
to prevailing community standards.
The company expects its journalists
and digital content producers to act
with a high degree of integrity and
professionalism in its news gathering
and production activities.
HT&E Annual Report 2021 25
Radio’s unique mix of
music, personalities,
talk and information
create an unrivaled
connection with
audiences that we
unequivocally protect.
practices, protect the interests of its
clients, and to enable informed choices
about the services being provided by
ARN. These terms of trade promote the
proper and accountable treatment of
intellectual property and functioning of
ARN’s media services to its clients. All
of ARN’s terms of trade are published
on its websites and readily accessible.
Its Standard Advertising Terms and
conditions are communicated to its
clients at the time of booking or can be
made available on request.
ARN takes its brand protection very
seriously and is committed to the
protection and integrity of its intellectual
property to ensure its brands remain
strong and resonate with audio
consumers. Its portfolio of influential
brands resonate with the Australian
public through its highly recognisable
talent and identifiers in the form of
registered trade marks, logos, business
and domain names that appear on
its platforms and properties and
identify the KIIS, Gold and iHeartRadio
networks as leading audio brands in
their respective markets. Listeners of all
ages and demographics associate the
ARN brands with best in class content,
unforgettable moments with the familiar
voices of ARN’s unrivalled stable of
talent, and a sense of connection to
community that can overcome distance
and geography. Piracy, copyright and
trade mark infringements are continually
monitored by ARN as part of its brand
protection program. The company
believes that strong intellectual property
protection is essential for it to be able to
deliver on its strategic objectives and to
continue to resonate with its audiences.
Approach to intellectual property
protection
HT&E has a highly developed intellectual
property protection program designed
to ensure compliance with laws and
following industry best practice.
Each day, ARN delivers content to its
audiences across multiple platforms.
Radio’s inimitable ability to move its
audiences, to generate emotion and
to create lasting impact requires a
unique mix of music, personalities, talk
and information to produce a sense
of connection beyond geographical
boundaries.
ARN relies on intellectual property to
continually create best in class content
requires a constant focus on intellectual
property governance that safeguards its
copyright and other intellectual property
interests, as well as that of its partners,
suppliers and consumers in order to
keep pace with a rapidly changing
intellectual property economy.
A framework of intellectual property
rights management is required to
produce ARN’s radio shows, podcasts
and website content. All licences,
consents, clearances and permissions
that may be required in separate
copyrights in underlying musical, literary
or dramatic works or subsisting in audio/
visual recordings is obtained prior to
publication by ARN. The company
ensures that its obligations in relation to
moral rights, performers consents’ and
crediting sources are carefully observed
at all times and that its content does not
violate any applicable laws, impersonate
any person or infringe the intellectual
property rights of any third party.
ARN is committed to providing clear
processes, performance protocols and
policy transparency for all of its clients
and partners and operates at all times
subject to its published terms of trade.
These terms of trade include its Standard
Advertising Terms and Conditions,
Terms of Use and Privacy Statement,
which are designed to provide
transparency regarding intellectual
property ownership, avoid unfair trade
Jase & Lauren – KIIS 101.1 Melbourne
26
Board of Directors
Hamish McLennan
Chairman of the Board and
Non-executive Director
(since 30 Oct 2018)
Hamish McLennan is an experienced
media and marketing executive who
brings unparalleled expertise to the
Board, given the global roles he has
held and his depth of understanding of
the changing media landscape and the
demands of advertisers.
He has a proven track record as an
outstanding leader across the media and
advertising sectors.
Previous roles Hamish has held include
Executive Chairman and Chief Executive
Officer of Ten Network Holdings from
2013 to 2015, Executive Vice President
for News Corporation in Sydney and
New York from 2012 and 2013 and
Global Chairman and CEO of Young &
Rubicam, a division of WPP, the world’s
largest communications services group
from 2006 to 2011.
Committees
Audit & Risk, Remuneration, Nomination
and Governance.
Other Directorships and offices
Director of REA Group Ltd (Chairman),
Rugby Australia Limited (Chairman),
Magellan Financial Group Limited
(Chairman), Claim Central Pty Limited,
Scientific Games Corporation (US
company) and Garvan Institute of
Medical Research (Fundraising Board).
Previous directorships of other Australian
listed companies (last three years)
iProperty Group Pty Ltd
(from 16 February 2016 to
6 February 2019) (delisted).
Ciaran Davis
CEO & Managing Director
(since 24 Aug 2016)
Belinda Rowe BA
Non-executive Director
(since 5 Feb 2019)
Ciaran Davis is responsible for the
strategic and operational direction of
the business. He has transformed a
business with large debt and a declining
asset portfolio centred on traditional
publishing, into one of the most exciting
media businesses in Australia today,
with a strong balance sheet. Prior to
becoming CEO of HT&E, Ciaran spent
five years as CEO of ARN repositioning
the business to become the number one
metropolitan radio operator in Australia.
He has 20 years’ media experience
working in over 15 countries throughout
Europe and the Middle East.
Other Directorships and offices
Director of a number of HT&E
subsidiaries and joint venture companies
and The Australian Ireland Fund Ltd.
Previous directorships of other Australian
listed companies (last three years)
Nil.
Belinda Rowe has extensive experience
across the marketing, communications,
digital and media sectors. She held
leadership roles in global companies
such as Telefonica O2 UK, a significant
UK telecommunications company as
head of their Brand and Marketing
Communications. She was one of the top
global executives at Publicis Media, one
of the largest media communications
groups in the world. She led a business
and digital transformation capability
along with a successful client practice
in her global role at Zenith. She also
created a unique content marketing
business across 32 markets with Publicis
Media, advising on digital capabilities
such as digital content marketing
including social and the application
of data and technology for dynamic
creative solutions. Prior to moving
to the UK in 2009 she was CEO of
ZenithOptimedia (now Zenith) and
Executive Director at Mojo, for 10 years
in Australia.
Committees
Audit & Risk, Remuneration, Nomination
and Governance
Other Directorships and offices
Director of Soprano Design Limited,
Non-Executive Director of Sydney
Swans Limited, Non-Executive Director
of Temple & Webster Group Ltd,
Non-Executive Director 3P Learning,
NSW Chair Advisory Board SecondBite.
Previous directorships of other
Australian listed companies
(last three years)
Nil.
HT&E Annual Report 2021 27
Paul Connolly BComm, FCA
Non-executive Director
(since 18 Oct 2012)
Roger Amos FCA, FAICD
Non-executive Director
(since 30 Nov 2018)
Alison Cameron B Ec
Non-executive Director
(since 5 January 2022)
Paul Connolly has over 30 years’
experience advising on mergers and
acquisitions, takeovers, disposals,
fundraisings and initial public
offerings. Since 1991, Paul has been
Chairman of Connolly Capital Limited,
a Dublin-based corporate finance
advisory firm focused on the telecom,
media and technology sectors. He was
a Director of Esat Telecommunications
Limited, an Irish telecommunications
company, from 1997 to 2000, and then
a Director of Digicel Limited from 2000
to 2006, a Caribbean and Pacific based
telecommunications Company – he
continues to serve as a Senior Advisor
to Digicel. In addition, he was a Director
of Melita Cable PLC from 2007 to 2016
and a Director of Independent News
& Media PLC from 2009 to 2018. From
1987 to 1991, he held the position of
Financial Controller of Hibernia Meats
Limited and prior to that, he worked with
KPMG as an accountant.
Committees
Remuneration, Nomination and
Governance (Chair), Audit & Risk.
Other Directorships and offices
Chairman of private Irish companies
Connolly Capital Ltd., Tetrarch Capital
Ltd., FrameSpace Ltd., Business &
Finance Ltd. (Irish business media
group), Polaris Principal Navigator Ltd.,
UNICEF Ireland as well as Chairman
of Neon Century Ltd., (private UK
company).
Previous directorships of other Australian
listed companies (last three years)
Nil.
Roger Amos is an experienced
non-executive Director with extensive
finance and management experience.
He was formerly Chairman of Contango
Asset Management Limited and a
non-executive Director of 3P Learning
Limited. He was formerly a non-executive
Director at REA Group Ltd, where he
was the Chairman of the Audit, Risk and
Compliance Committee and a member
of its Human Resources Committee.
At 3P Learning Limited, he was the
Chairman of the Audit and Risk Committee
and a member of its Nominations
and Remuneration Committee.
Roger was also previously a Director of
Austar United Communications Limited
and Enero Group Limited as well as
Governor on the Cerebral Palsy Alliance
Research Foundation.
He had a long and distinguished career
with international accounting firm
KPMG for 25 years as a partner in the
Assurance and Risk Advisory Services
Division. While with KPMG, he led the
Australian team specialising in the
information, communications and
entertainment sectors and held a number
of global roles.
Committees
Audit & Risk (Chair), Remuneration,
Nomination and Governance.
Other Directorships and offices
Nil
Previous directorships of other Australian
listed companies (last three years)
Enero Group Limited (from
23 November 2010 to 18 October 2018),
REA Group Ltd (from 4 July 2006 to
17 December 2020), Contango Asset
Management Limited (from 7 June 2007
to 31 January 2022) and 3P Learning
Limited (from 2 June 2014 to 28 May 2021).
Alison is an experienced media
executive with a 34 year career spanning
finance, sales and management in
commercial radio. For the last 28 years,
Alison has worked for her family’s
business, privately owned Grant
Broadcasters Pty Ltd and was part
of multiple acquisitions over the last
15 years, culminating in the ownership of
48 commercial radio stations in regional
Australia. She has a deep understanding
of media and regional communities.
Alison’s most recent role was CEO of
Grant Broadcasters and was responsible
for the negotiation of the sale of
46 regional stations to ARN.
Alison is also a Director of the
government’s National Film and Sound
Archive, and Chair of their Finance
Committee and a member of the
Audit and Risk Committee. Alison was
also Director of Grant Broadcasters
Pty Ltd from 18 February 2004 to
4 January 2022.
Committees
Nil.
Other Directorships and offices
Director of National Film and Sound
Archive since May 2020. Director of
private companies Craigieburn Resort
Pty Ltd, Golden Labrador Pty Ltd,
G-Agri Pty Ltd and Gordie Pty Ltd.
Previous directorships of other Australian
listed companies (last three years)
Nil.
28
Senior management team
Ciaran Davis
CEO & Managing Director
(since 24 Aug 2016)
Andrew Nye BBus, CA
Chief Financial Officer
(since 14 August 2019)
Jeremy Child B.Bus LLB M.Sc
Company Secretary
(since 14 August 2019)
Refer to biography on page 26.
Jeremy Child joined HT&E Limited in
2015 as Group Taxation Manager and
took on the expanded role of Company
Secretary in August 2019.
He previously worked at the Royal Bank
of Scotland (formerly ABN AMRO)
dealing in a range of tax matters
including advising on transactions,
products, governance and managing
tax audits. Jeremy also consulted at tax
firms such as providing R&D advice with
MJ&A and GST advice with PwC.
Jeremy is a legal practitioner holding
a BBus/LLB from UTS, a MSc from the
Stockholm School of Economics and is
an Associate of the Governance Institute
of Australia.
In August 2019, Andrew Nye was
appointed Chief Financial Officer of
ARN, with dual responsibility for both
ARN and HT&E. He joined HT&E in 2015
as General Manager of Finance and was
appointed Chief Financial Officer of
Adshel in 2017.
At HT&E, Andrew was the operational
finance lead across a period of
significant corporate activity, including
the demerger of NZME, disposal
of Australian Regional Media and
acquisition of Adshel. While at Adshel,
Andrew was a member of the executive
team, responsible for the development
and execution of the strategic and
operational plans of the company.
Andrew led the finance team through
the successful sale of Adshel to
oOh!media in 2018.
Andrew is a Chartered Accountant
and has a broad range of experience
accumulated through a combination
of commercial roles and over 11 years
consulting at PwC. Andrew is a Director
of a number of HT&E subsidiaries and
joint venture entities.
HT&E Annual Report 2021 Directors’ Report
and Financial Report
29
30 Corporate Governance Statement
30 Directors’ Report
35 Remuneration Report
51
Auditor’s Independence
Declaration
52 About The Financial Statements
52 Consolidated Financial Statements
53 Consolidated Statement of
Comprehensive Income
54 Consolidated Balance Sheet
55 Consolidated Statement of
Cash Flows
56 Consolidated Statement of
Changes in Equity
Notes To The Consolidated
Financial Statements
1. Group performance
57 1.1 Revenues
59 1.2 Expenses
60 1.3 Segment information
62 1.4 Earnings per share
2. Operating assets and liabilities
3. Capital management
76 3.1 Bank loans
78 3.2 Cash flow information
79 3.3 Financial risk management
82 3.4 Fair value measurements
83 3.5 Contributed equity
84 3.6 Share-based payments
85 3.7 Reserves and
accumulated losses
87 3.8 Dividends
4.
Taxation
88 4.1 Income tax and deferred tax
5. Group structure
93 5.1 Controlled entities
95 5.2 Interests in other entities
96 5.3 Shares in other corporations
97 5.4 Investments accounted for
using the equity method
100 5.5 Parent entity
financial information
101 5.6 Deed of cross guarantee
63 2.1 Intangible assets
6. Other
68 2.2 Property, plant and equipment
70 2.3 Leases
74 2.4 Provisions
103 6.1 Soprano Sale
103 6.2 Contingent liabilities
103 6.3 Remuneration of auditors
104 6.4 Related parties
105 6.5 Other significant
accounting policies
106 6.6 Subsequent events
107 Directors’ Declaration
108 Independent Auditor’s Report
113 Shareholder Information
116 Corporate Directory
30
HT&E Annual Report 2021
Directors’ Report
Corporate Governance Statement
The Board of HT&E endorses good corporate governance practices and oversees an organisation-wide commitment to high standards of
legislative compliance and financial and ethical behaviour.
The Directors’ overriding objective is to increase shareholder value within an appropriate framework that protects the rights and enhances the
interests of all shareholders and ensures the Company is properly managed.
The Company has considered the best practice recommendations established by the ASX Corporate Governance Council Corporate Governance
Principles and Recommendations 4th Edition, February 2019 and has complied with the ASX recommendations for the entire reporting period
(unless otherwise indicated in the Company’s Corporate Governance Statement).
A description of how the Company’s main corporate governance practices and policies, together with the policies and charters referred to in it, is
available on the Company’s website, www.htande.com.au/corporate-governance.
Directors’ Report
Your Directors present their report on the consolidated entity consisting of HT&E and the entities it controlled at the end of, or during, the year
ended 31 December 2021. Throughout this report, the consolidated entity is also referred to as the Group.
1. Directors
The Directors of HT&E Limited during the financial year and up to the date of this report consisted of:
Hamish McLennan (Chairman) (appointed 30 October 2018)
Roger Amos (appointed 30 November 2018)
Paul Connolly (appointed 18 October 2012)
Ciaran Davis (CEO & Managing Director) (appointed 24 August 2016)
Belinda Rowe (appointed 5 February 2019)
Alison Cameron (appointed 5 January 2022)
Details of the current Directors’ qualifications, experience and responsibilities are set out on pages 26 and 27.
2. Company Secretary
The Company Secretary of HT&E Limited is Jeremy Child (appointed 14 August 2019)
Details of the current Company Secretary’s qualifications, experience and responsibilities are set out on page 28.
3. Principal Activities
HT&E is a leading media and entertainment company listed on the Australian Securities Exchange which operates audio and digital businesses in
Australia as well as outdoor assets in Hong Kong.
HT&E owns Australian Radio Network (ARN), Australia’s leading metropolitan radio broadcaster and home to the national KIIS and Pure Gold
networks and youth radio network The Edge. In 2022, ARN will also operate regional radio and digital operations, having acquired from Grant
Broadcasters a regional radio network (ARN Regional) in an acquisition that was completed on 4 January 2022 (refer note 6.6 for more details).
ARN also operates under a long term licence agreement, music, streaming and podcasting distribution platform iHeartRadio, along with a
content creation business Emotive.
HT&E also owns Cody Out-of-Home in Hong Kong, which has a network of over 440 outdoor advertising panels across major Hong Kong tunnels
as well as the iconic tram shelters on Hong Kong Island.
Other HT&E investments included global provider of secure mobile messaging technology Soprano Design.
31
Directors’ Report
(Continued)
4. Dividends
Dividends paid to owners of HT&E Limited during the financial year were as follows:
Dividends
Type
Interim 2021
Cents
per share
3.5
AUD
million Date of Payment
9.7
15 Sept 2021
Since the end of the financial year, the Directors have declared the payment of a fully franked final dividend of 3.9 cents per ordinary share in
respect of the year ended 31 December 2021. This dividend is payable on 23 March 2022.
5. Consolidated Result and Review of Operations
Information on the operations and financial position of the Group and its business strategies and prospects is set out in the Chairman’s letter,
Chief Executive Officer’s letter and Operating & Financial Review on pages 4 to 15.
6. Significant Changes in the State of Affairs
In the opinion of the Directors, there were no significant changes in the state of affairs of the consolidated entity during the financial year under
review not otherwise disclosed in this Directors’ Report or the consolidated financial statements.
7. Matters Subsequent to the End of The Financial Year
Events occurring after balance date are outlined in note 6.6 to the consolidated financial statements.
8. Likely Developments and Expected Results of Operations
Overall strategic direction and prospects are discussed in the Chairman’s and Chief Executive Officer’s letters on pages 4 to 7 and the Operating
& Financial Review on pages 8 to 15.
Further information as to likely developments in the operations of the consolidated entity and the expected results of those operations in
subsequent financial years has not been included in this Directors’ Report because, in the opinion of the Directors, it would prejudice the
interests of the consolidated entity.
9. Risk Management
The Board plays an active role in the setting and oversight of HT&E’s Risk Management Framework.
The Australian advertising industry is subject to inherent risks including, but not limited to, exposure to macroeconomic factors, technological
and social changes impacting consumer behaviours and advertiser spending, market competition and impacts of changes in government
regulations.
The process of identifying, monitoring and mitigating significant business risks under the Group’s Risk Management Framework is outlined in
further detail in the Corporate Governance Statement which is available on the Company website, www.htande.com.au/corporate-governance.
32
HT&E Annual Report 2021
Directors’ Report
(Continued)
The Group has identified a number of key business and financial risks which may impact on HT&E’s achievement of its strategic and financial
objectives. They include, but are not limited to:
Risk
Description
Changes in radio audience
share
In Australia, the Group operates within the radio and digital advertising sectors. Any decline in radio
audience share could affect advertising revenue and financial results.
The Group mitigates this risk by investing in its on-air talent and total audio offering, which span across
radio, music streaming and podcasting, in addition to the attraction and retention of experienced and high
performing executives and employees.
Loss of key on-air talent
Recruiting and retaining the best on-air talent is integral to being able to maintain and grow audience share.
Fixed term contracts are in place, with terms reviewed and contracts renewed with sufficient regularity to
mitigate the risk of losing key on-air talent.
Changes in advertiser and/or
audience preferences
Remaining relevant to advertisers and audiences is critical to meeting the Group’s strategic objectives.
Changes in audience preferences leading to audience fragmentation could over time, result in
revenue declines.
The Group remains focused on improving commercial revenue share through its “Defining Audio through
Connections that Count” commercial proposition. The Group’s relevance to agencies and advertisers has
been further enhanced with the recent acquisition of 46 radio stations across 26 regional markets. The
Group continues to invest in digital audio innovation, podcasting, music streaming and data capabilities.
Further, investment in capabilities include retaining experienced media executives, hiring proven on-air
talent, participation in industry bodies, advertising and market research.
Timing of recovery from COVID-
19 pandemic and other
macroeconomic factors
The ability for the Group to execute its strategy is linked to ongoing economic stability in those markets in
which it operates. If economic conditions were to deteriorate, there could be a significant reduction in
Group revenues and earnings.
In 2020, advertising spend in both Australia and Hong Kong were significantly affected by the widespread
economic impacts of COVID-19.
Advertising spend has improved in 2021 and the Group maintains a sound capital structure with sufficient
undrawn financing facilities in place and will continue to monitor performance and market developments to
reassess plans and strategies as required.
Tax matters
A number of tax matters as previously disclosed, have been settled through binding agreements with the
Australian Taxation Office in 2021.
Further details are provided in note 4.1 to the consolidated financial statements.
Loss of broadcasting
licence
While considered unlikely, the loss of an Australian radio broadcasting licence would have a material impact
on Group revenues and earnings.
The Group has long-standing controls in place to minimise the risk of legislation compliance breaches.
Disruption of technology
systems, security breaches and
data privacy
There are a number of technology systems that are critical to the operations of the Group and protection of
privacy of data.
The Group continues to invest in cyber security and strengthening its IT Risk Management Framework to
reduce the occurrence of outages, enable early detection of issues and mitigate operating and financial
impacts. During the year, training on cyber security awareness was completed for all staff.
33
Directors’ Report
(Continued)
10. Corporate Social Responsibility
The Directors recognise the corporate social responsibilities of the Group, including the importance of environmental matters, occupational
health and safety issues and diversity initiatives. The Directors are committed to compliance with all relevant laws and regulations to ensure the
protection of the environment, the community and the health and safety of employees. The operations of the consolidated entity are not subject
to any particular and significant environmental regulation under the laws of Australia or Hong Kong.
11. Remuneration Report
The Remuneration Report is set out on pages 35 to 50 and forms part of this Directors’ Report.
12. Directors’ Meetings
The number of meetings of the full Board of Directors and Board Committees held in the period each Director held office during the financial
year and the number of those meetings attended by each Director in their capacity as a member of the Board or Board Committee were:
Hamish McLennan
Roger Amos
Paul Connolly
Ciaran Davis
Belinda Rowe
Board of Directors
Audit & Risk
Committee
Remuneration, Nomination
and Governance Committee
Held
Attended
Held
Attended
Held
Attended
16
16
16
16
16
16
16
16
16
16
5
5
5
N/A
5
5
5
5
N/A
5
4
4
4
N/A
4
4
4
4
N/A
4
Committees were formed for purposes including reviewing and approving the half-year and annual financial statements, 2020 Annual Report and
2021 Notice of Annual General Meeting. These meetings were attended as follows (Held/Attended): Hamish McLennan (3/3), Roger Amos (1/1),
Belinda Rowe (1/1) and Ciaran Davis (4/4).
13. Directors’ Interests
The Remuneration Report on pages 35 to 50 contains details of shareholdings of the Directors and Executive Key Management Personnel for the
year ended 31 December 2021.
14. Shares Under Option
There were no unissued shares of HT&E Limited under option at 31 December 2021 and no shares issued during the financial year as a result of
the exercise of options. No options have been granted since the end of the financial year.
15. Indemnification of Directors and Officers
The parent entity’s Constitution provides for an indemnity for officers of the Company against any liability incurred by an officer of the Company
in their capacity as an officer. Under the Corporations Act 2001, this indemnity does not extend to a liability to the parent entity or a related
body corporate of the parent entity, a liability for a pecuniary penalty or compensation order under certain provisions of the Corporations Act
2001 or a liability that is owed to someone other than the parent entity or a related body corporate of the parent entity, which did not arise out
of conduct in good faith.
An Access, Indemnity and Insurance Deed is also provided to each Director and officer who serves as a director or officer of the Company, a
subsidiary or an associated entity. The deed is consistent with the Constitution and indemnifies these persons to the extent permitted by law for
liabilities and legal costs incurred as a director of these entities (subject to some limitations).
34
HT&E Annual Report 2021
Directors’ Report
(Continued)
16. Insurance of Directors and Officers
The parent entity has paid for an insurance policy for the benefit of all persons who are or have been directors or officers of the parent entity or
any other company in the consolidated entity against liabilities incurred during any one policy period. The insured persons include current and
former directors, officers and company secretaries of the parent entity and any other company in the consolidated entity. The insurance policy
specifically prohibits the disclosure of the nature of the liability covered and the premium paid.
17. Proceedings on Behalf of the Company
No person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or
to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part
of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of a court under section 237 of the Corporations Act
2001.
18. Non-Audit Services
The Group may decide to employ its auditors on assignments additional to their statutory audit duties where the auditor’s expertise and
experience with the Group is important.
For the financial year, the Company’s auditor, PricewaterhouseCoopers, received or is due to receive $455,307 for the provision of non-audit
services. Full details of the amounts paid or payable to the auditors for audit and non-audit services provided during the financial year are set out
in note 6.3 to the consolidated financial statements.
The Company auditor has provided the Directors with an Auditor’s Independence Declaration in relation to the audit, a copy of which is provided
on page 51. The auditor has also confirmed to the Directors that it has in place independence quality control systems which support its
assertions in relation to its professional and regulatory independence as auditor of the consolidated entity (including the requirements of APES
110 Code of Ethics for Professional Accountants).
The Audit & Risk Committee has reviewed the fees provided to the auditor for non-audit services in the context of APES 110, the requirements of
the Audit & Risk Committee Charter, the Audit Firm Service Provider Policy and general corporate governance practices adopted by the
consolidated entity.
Based on the above factors, the Audit & Risk Committee has no reason to believe that there has been any compromise in the independence of
the auditor due to the provision of these non-audit services and has advised the Board accordingly.
In accordance with the advice of the Audit & Risk Committee, the Directors are therefore satisfied that the provision of non-audit services during
the financial year by the auditor is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 and
that the provision of non-audit services during the financial year did not compromise the auditor independence requirements of the
Corporations Act 2001.
19. Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration, as required under section 307C of the Corporations Act 2001, is provided on page 51.
20. Rounding of Amounts to Nearest Thousand Dollars
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 issued by the
Australian Securities and Investments Commission, relating to the rounding off of amounts in this Directors’ Report and the financial report.
Amounts in this Directors’ Report and the financial report have been rounded off to the nearest thousand dollars, or in certain cases to the
nearest dollar, in accordance with that instrument.
This Directors’ Report is issued in accordance with a resolution of the Directors.
Hamish McLennan
Chairman
Sydney
23 February 2022
Remuneration Report
35
Dear Shareholders
On behalf of the Remuneration, Nomination and Governance Committee and the Board of Directors, I am pleased to present HT&E’s
Remuneration Report for 2021.
The Chairman’s and CEO & Managing Director’s reports outline the strong performance of the Group in 2021. HT&E’s financial performance
finished substantially ahead of target, with advertising revenues remaining strong despite some ongoing impacts from the COVID-19 global
pandemic. The Group again maintained its focus on its core radio operations, maintaining ARN’s enviable #1 metro audience ratings position and
growing commercial share. In addition, the Group undertook strategic investment in developing its people and culture and expanding its digital
audio capability.
The successful resolution of the New Zealand Branch Tax Matter, combined with strong returns from the disposal of certain investments, and an
ongoing focus on cost management, enabled the Group to be in a position to acquire ARN Regional from Grant Broadcasters, a highly strategic
investment that we believe positions ARN well for strong growth over the coming years, and will deliver substantial EPS accretion for HT&E
shareholders.
The remuneration outcomes set out below reflect these achievements.
Remuneration Approach and Changes For 2021
Limited changes were made to Executive KMP total fixed remuneration (TFR) and Non-executive Director remuneration in 2021. The Chief
Executive Officer and Non-executive Directors maintained the 15% fixed remuneration reduction which became effective in 2018 in response to
the reduced size of the HT&E Group, a consequence of the successful divesture of the Group’s legacy print operations and disposal of Adshel.
The structure and financial metrics of the Group’s Total Incentive Plan (TIP) in 2021 remained consistent with the 2020 plan.
The single change made to Executive KMP remuneration was in respect of the Chief Financial Officer who was awarded an increase of the TIP
Target award; this was increased from 50% to 100% of Total Fixed Remuneration.
Performance and Remuneration Outcomes For 2021
As previously outlined, HT&E’s financial performance in 2021 was strong, despite some on-going impacts from the COVID-19 global pandemic.
Group performance exceeded all financial performance thresholds;
•
•
•
Executive KMP also met some or all key performance indicator (KPIs) targets.
Reported EBITDA before exceptional items and discontinued operations, of $59.8 million was up 21% verses 2020 and 15% ahead of target;
EPS on a post-tax basis, before exceptional items, of 10.4 cents was 26.8% ahead of target; and
ROIC, calculated based on earnings before interest and tax (EBIT) and before exceptional items, of 13.9%, compared to target of 11.3%.
36
HT&E Annual Report 2021
Remuneration report
(Continued)
Remuneration Changes for 2022
A review of KMP remuneration was undertaken, with the support of Mercer Consulting Australia. This review involved benchmarking the
Executive KMP Remuneration framework and outcomes against a peer group of similar companies. The review confirmed that the Executive KMP
Remuneration framework is market competitive, acts as a reward and retention tool, and strongly aligns executives with the interests of
shareholders.
In light of the acquisition of ARN Regional from Grant Broadcasters, which will significantly increase the revenues, EBITDA, cost base and
complexity of the Group, and the critical role of KMP in managing the integration, the following changes have been made for 2022;
•
•
•
the CEO & Managing Director’s TFR reinstated to $1.2 million (equal to 2017 TFR), and the target TIP opportunity reduced from 137.5%
to 115%;
the CFO’s TFR increased to $575,000, with the TIP threshold remaining unchanged at 100%; and
Non-executive Director Board Member fees increased to $135,000 per annum (inclusive of superannuation).
The Board believes the Group’s total remuneration and incentive plan continues to strongly align our management team with the interests of
shareholders.
Paul Connolly
Chair of the Remuneration,
Nomination and Governance Committee
37
Remuneration Report
(Continued)
Our Detailed Remuneration Report
This Remuneration Report for the year ended 31 December 2021 outlines key aspects of our remuneration framework and has been audited in
accordance with the Corporations Act 2001.
Our Remuneration Report contains the following sections:
A. Who this report covers
B. Remuneration governance and framework
C. How 2021 reward was linked to performance
D. Total remuneration for Executive KMP
E. Actual remuneration for 2021
F. Contractual arrangements with Executive KMP
G. Non-executive Director arrangements
H. Share-based remuneration
I. Non-executive Director and Executive KMP shareholdings
J. Other statutory disclosures.
A. Who This Report Covers
This report covers Key Management Personnel (KMP), comprising Executive Key Management Personnel (Executive KMP) and
Non-executive Directors.
Name
Executive KMP
Ciaran Davis
Andrew Nye
Non-executive Directors
Role
Chief Executive Officer (CEO & Managing Director)
Chief Financial Officer (CFO)
Hamish McLennan
Non-executive Chairman
Roger Amos
Paul Connolly
Belinda Rowe
Non-executive Director
Non-executive Director
Non-executive Director
Alison Cameron was appointed a non-executive director on 5 January 2022 following the successful completion of the acquisition of ARN
Regional from Grant Broadcasters.
No other changes have occurred to the composition of KMP since 31 December 2021 up to the date of this report.
38
HT&E Annual Report 2021
Remuneration report
(Continued)
B. Remuneration Governance and Framework
Remuneration Governance
The role of the Remuneration, Nomination and Governance Committee is to oversee HT&E’s remuneration policies and practices, so they are
consistent with and relevant to the achievement of the strategic goals of the Group. Amongst other objectives, the Committee is tasked with
reviewing, and recommending to the Board, reward outcomes and any significant changes to remuneration arrangements for the Chief Executive
Officer (CEO) & Managing Director and other Executive KMP.
In 2021 a review of KMP remuneration was undertaken, with the support of Mercer Consulting Australia. The review involved determining an
appropriate peer group of companies to benchmark our remuneration framework against, reviewing our TIP against key competitor STI and LTI
plans, reviewing both Non-Executive Director fee structures and Executive KMP remuneration (TFR and TIP) against the peer group of companies,
and developing recommendations for adjustments based on market competitiveness and business performance.
Remuneration Framework
We believe that building and maintaining a primarily constructive culture enables business success, drives internal engagement, and allows us to
attract and retain the best people. Our remuneration framework has a key role to play and is structured in alignment with the following
principles:
Market competitive through
alignment against a peer group
of companies of a similar size
and complexity
Rewards the creation of
shareholder value through the
sustainable delivery of short and
long-term business outcomes
A holistic “total reward” offering
across financial and non-
financial elements that balances
reward with retention
A focus on stretch goal
achievement, leveraging
financial and non-financial KPIs
to balance the “what” with the
“how”
HT&E aims to reward Executive KMPs with a level and mix of remuneration appropriate to their position, responsibilities and performance within
the Group and aligned with market practice. Executive KMP remuneration is comprised of two main elements, Total Fixed Remuneration (TFR)
and Total Incentive Plan (TIP). The TIP is a simple and effective plan that encompasses both long and short-term reward.
HT&E aims to position total remuneration for KMP Executives principally within a competitive range of a peer group. This includes Australian
listed companies with characteristics most like HT&E when compared against a set of financial and qualitative metrics. Total reward opportunity
is intended to provide the opportunity to earn median to top quartile reward for outstanding performance against set stretch targets.
39
Remuneration Report
(Continued)
The Executive KMP remuneration framework is summarised below.
Element
Delivery
Structure
Fixed
Total Fixed
Remuneration (TFR)
Cash and Superannuation
Contributions
Variable
‘At risk’ and
linked to
performance
Total Incentive Plan
(TIP)
Financial performance
of the company and
individual performance
over the year
Cash 50%
Delivered at the end of the
financial year
Equity 50%
Delivered in rights to acquire
ordinary shares in the
company at nil
consideration, subject to
a further 1-year service
period and 2-year
holding lock
– Base pay aligned to market, role scope and complexity, and skills,
knowledge, and experience of the individual
– Superannuation aligned to SGC
– KPIs set at the start of the financial year
– 75% financial KPIs (weighted equally between ROIC, EBITDA, and
EPS)
– 25% non-financial KPIs (delivery of strategic business
initiatives/priorities)
– Retention element through long-term focus of KPIs, target setting
process and structure of delivery of equity
– The higher weighting of financial to non-financial metrics
emphasises the importance the Board places on HT&E’s financial
performance
The TIP provides Executive KMPs with the opportunity to receive cash and equity following an assessment against specified financial and non-
financial performance KPIs based on a one-year performance period. The following diagram illustrates the operation of the TIP.
- 25% non-financial
performance KPI measures
- 75% financial
performance KPI measures
Year 1
Year 2
Year 3
Year 4
Other remuneration arrangements will be entered into on an ‘as needs’ basis as determined by the Board. These may include retention and
transaction/project completion incentives.
40
HT&E Annual Report 2021
Remuneration report
(Continued)
Performance Measures
Financial Key Performance Indicators (KPIs) make up 75% of the target TIP with performance measured based on Group earnings before interest,
tax, depreciation and amortisation (EBITDA) (25%), Group earnings per share (EPS) (25%) and Group return on invested capital (ROIC) (25%),
before exceptional items, per the table below.
EBITDA and EPS
EBITDA and EPS
performance
<95% of budget
95% of budget
>95% to <100%
of budget
100% of budget
>100% to <110%
of budget
At or above 110%
of budget
Percentage of target opportunity
awarded
0%
25%
Pro-rata between
25% and 100%
100%
Pro-rata between
100% and 150%
150%
ROIC
ROIC performance
Below threshold1
At threshold
Between threshold
and budget
At budget
Between budget
and stretch
At or above stretch
Percentage of target opportunity
awarded
0%
25%
Pro-rata between
25% and 100%
100%
Pro-rata between
100% and 150%
150%
The financial performance award schedule is designed to provide only limited awards where performance is below budget, with upside for
performance above budget, up to a maximum cap of 150%.
EPS in 2021 was derived from Net Profit After Tax (NPAT) attributable to owners of the parent as a percentage of weighted average number of
shares on issue. ROIC in 2021 was derived from EBIT as a percentage of adjusted total equity. Both measures were on a pre-exceptional items
basis.
(1) Threshold will be determined with reference to prior year ROIC, next 12-months expected earnings and forecast changes to capitalisation in the budget.
41
Remuneration Report
(Continued)
Non-financial KPIs make up 25% of the target TIP and are aligned to key strategic priorities for the Group. For 2021, the Executive KMPs were
accountable for delivering the following outcomes to achieve their non-financial KPIs:
Strategic Priority
Leadership of ARN people
and culture transformation
Strategic brand development
Digital business development
Balance sheet, cost and capital management
Outcomes Delivered
•
•
•
•
•
•
•
•
•
•
•
Strong shifts in the culture as measured through employee retention and Net
Promoter Score (eNPS) improvements
Improvement in leadership capability through the establishment of key
structures and investment in development programmes
Continued improvements in gender diversity, particularly female
representation in leadership roles
Expansion of podcasting development and production capability
Strategic review and development of ARN master brands
Implementation of technology stack to drive digital revenues
Recruitment of highly experienced Chief Innovation & Technology Officer to
lead this, scheduled to commence in H1 2022
Improvements in cyber security capability and data management
Successful resolution of the New Zealand Branch Tax Matter with the ATO
Acquisition of ARN Regional from Grant Broadcasters, completed 4 January
2022
In-sourcing of key processes and investment in systems to gain efficiencies
KMP Remuneration Mix
The remuneration mix between fixed and variable pay incentivises executives to focus on the Group’s short and long-term performance, with a
portion of remuneration at risk. In reviewing remuneration for Executive KMP, the Board has remained cognisant of shareholder feedback and of
the remuneration mix for similar companies.
For 2021, the TIP award opportunity for the CFO was increased from 50% to 100% of TFR, resulting in a target remuneration mix of 50%/50% for
TFR and TIP. The target remuneration mix for the CEO & Managing Director was unchanged.
On 1 January 2018, the CEO & Managing Director took a 15% reduction in fixed remuneration, with the TIP payout threshold being adjusted from
100% to 137.5%, due to changes in the structure of the business. In alignment with the integration of ARN Regional (the acquisition from Grant
Broadcasters), the remuneration of the CEO & Managing Director has been benchmarked externally and realigned in recognition of the increased
scope of the role as a result. Effective 1 January 2022, TFR was increased to $1.2 million (equal to 2017 TFR), and the TIP threshold reduced from
137.5% to 115%.
Similarly, the remuneration of the CFO has been benchmarked externally and realigned in recognition of the increased scope. Effective 1 January
2022, TFR was increased to $575,000. The TIP threshold remains at 100%.
42
HT&E Annual Report 2021
Remuneration report
(Continued)
As a result of these changes, the target remuneration mix for 2022 has shifted as follows:
To further reinforce the alignment of Executive KMPs to shareholder interests, 50% of the TIP is delivered as rights to acquire ordinary shares,
with a 1-year service period and further 2-year holding lock. This serves as a strong retention driver, as well as providing further incentive for
effective long-term decision-making. The following diagram shows the mix of cash (short-term reward) and equity (long-term reward) delivered
at target across total remuneration for Executive KMPs.
CEO
CFO
0%
20%
40%
60%
80%
100%
120%
TFR (cash)
TIP (cash)
TIP (equity)
Other plan features
Feature
Dividends
Equity allocation
methodology
Clawback
Description
At the discretion of the Board participants will receive an additional allocation of fully paid ordinary shares or a
cash payment at vesting equal to the dividends paid on vested rights over the performance and service periods.
Equity is granted based on the face value of the rights calculated at the commencement of the performance
period.
The Company may reduce unvested equity awards in certain circumstances such as gross misconduct, material
misstatement or fraud. The Board may also reduce unvested awards to recover amounts where performance
that led to payments being awarded is later determined to have been incorrectly measured or not sustained.
Treatment of awards on
cessation of employment
Awards are forfeited for ‘bad’ leavers (e.g. resignation or termination for cause), while ‘good’ leavers (e.g.
cessation of employment due to redundancy, total disablement or death) receive pro-rated awards based on the
extent to which performance and service conditions are met.
Treatment of awards on
change of control
Participants receive pro-rated awards based on the extent to which performance and service conditions are met.
The Board retains the ultimate discretion regarding remuneration outcomes. The Board may make or cancel (claw back) awards where it sees fit
to align with remuneration policy and/or Company strategic outcomes.
43
Remuneration Report
(Continued)
C. How 2021 Reward was Linked to Performance
Performance Measures
The overall Company performance for 2021 is reflected in the performance measures below. Results for 2019 onwards reflect the adoption of
AASB 16 Leases in 2019.
Group EBITDA1
Net profit after tax before amortisation
(NPAT/NPATA)2
Weighted average number of shares outstanding3
Basic (NPAT/NPATA) EPS2, 3 (cents)
ROIC4
Dividend paid to shareholders (cents per share)
Increase/(decrease) in share price (%)5
2021
$59.8m
2020
$49.3m
2019
$75.6m
2018
2017
$105.5m
$118.4m
$28.8m
$15.4m
$34.2m
$51.2m
$54.1m
276,605,346
279,530,868
283,605,019
307,528,973
307,696,348
10.4
13.9%
3.5
14%
5.5
8.0%
4.6
9%
12.1
14.0%
8.0
7%
16.6
23.9%
79.0
22%
17.6
13.4%
7.0
(34%)
(1) Continuing operations before exceptional items. 2018 includes Adshel’s results for the period it was owned by HT&E. 2021, 2020 & 2019 includes impact of
adoption of AASB 16 Leases.
(2) Continuing and discontinued operations before exceptional items and amortisation, attributable to HT&E shareholders. Results reflect Net Profit after Tax
before Amortisation (NPATA) for 2017 and NPAT for 2018 to 2021.
(3) Adjusted for treasury shares and share buyback in 2018 to 2021.
(4) Based on EBIT from continuing operations before exceptional items for 2018 to 2021 and EBITA from continuing operations before exceptional items for 2017.
(5) 2018 closing share price increased to reflect payment of special dividend.
Performance and Impact on Remuneration
2021 TIP Award
HT&E’s continuing operations EBITDA, EPS and ROIC performance in 2021 were ahead of targets set at the beginning of the year, with advertising
revenues remaining strong despite some ongoing impacts from the COVID-19 global pandemic.
A component (75%) of the 2021 TIP award was dependent on Group financial performance relative to target. Performance for the 2021 financial
year is outlined in the table below:
2021 TIP financial metrics
EBITDA performance
EPS performance
ROIC performance
Group: continuing operations
Between target and maximum;
115.0% of target achieved
Between target and maximum;
126.8% of target achieved
Between target and maximum;
123.3% of target achieved
44
HT&E Annual Report 2021
Remuneration report
(Continued)
The chart below shows over the last three years, Group results used for TIP assessment as a percentage of targets, and the corresponding TIP
component award outcome:
HT&E’s performance for 2021 surpassed the stretch target on all financial performance conditions resulting in the maximum award for financial
metrics. Executive KMP met some or all of their personal KPI targets, with award outcomes for the CEO & Managing Director of 75% and CFO of
100%.
The financial performance conditions in 2019 & 2020 were not met and no awards were made for the financial components of the TIP.
The table below summarises the 2021 TIP outcomes:
Executive KMP
Ciaran Davis
Andrew Nye
TIP awarded
(cash incentive)
$
TIP awarded
1
(equity award)
$
Total TIP
awarded
$
% of
target
achieved
% of
maximum
achieved
% of
maximum
forfeited
905,625
357,500
905,625
357,500
1,811,250
715,000
131.3%
137.5%
95%
100%
5%
0%
(1) This differs from the accounting fair value of the equity award (included in section D), which is calculated in accordance with accounting
standards and expensed over two financial years, covering both the performance and service periods.
45
Remuneration Report
(Continued)
D. Total Remuneration for Executive KMP
Details of the Executive KMP remuneration for 2021 and comparatives for 2020 and 2019 are set out in the table below. The remuneration in this
table has been calculated in accordance with accounting standards and therefore differs from the information included in section E.
Short-term benefits
Post-
employment
benefits
Other
long-term benefits
Executive KMP
Ciaran Davis
2021
2020
2019
Cash salary
and fees1
$
979,934
975,907
976,489
Andrew Nye (from 14 August 2019)
2021
2020
2019
Total
2021
2020
2019
498,306
496,735
152,949
1,478,240
1,472,642
1,129,438
Non-
monetary
benefits2
$
Cash
incentives3
$
Super-
annuation
$
19,159
24,037
33,143
787
1,293
–
19,946
25,330
33,143
905,625
–
155,250
357,500
–
9,844
1,263,125
–
165,094
22,631
21,348
20,767
22,631
21,348
10,305
45,262
42,696
31,072
Long
service
leave4
$
24,212
40,489
34,683
939
324
87
25,151
40,813
34,770
(1) Cash salary and fees include accrued annual leave paid out as part of salary.
(2) Non-monetary benefits typically include novated lease costs, car parking and associated fringe benefits tax.
(3) Cash incentive payments relate to cash TIP awards accrued for the relevant year and paid in the year following.
(4)
Long service leave relates to amounts accrued during the year.
(5) The fair value is derived using the closing share price on the grant date.
Fair value
equity
awards5
$
513,867
135,327
497,111
Total
$
2,465,428
1,197,108
1,717,443
202,851
1,083,014
5,870
5,452
525,570
178,637
716,718
141,197
502,563
3,548,442
1,722,678
1,896,080
46
HT&E Annual Report 2021
Remuneration report
(Continued)
E. Actual Remuneration for 2021
The following section sets out the value of remuneration which has been received by Executive KMP for the 2021 performance year.
The figures in the following table are different to those shown in the accounting table in Section D because that table includes the apportioned
accounting value for all vested TIP grants. It also includes accrued long service leave and non-monetary benefits provided in addition to an
individual’s TFR.
The TIP values represent the cash portion (50%) of the total TIP awarded for each year. Vested TIP in 2020 is the value of the TIP that was
granted in 2019 and vested at the end of 2020 based on the share price at 31 December 2020, consistent with the 2020 Remuneration Report.
Executive KMP
Ciaran Davis
2021
2020
2019
Andrew Nye (from 14 August 2019)
2021
2020
2019
Total
2021
2020
2019
(1) TFR comprises base salary, retirement benefits and other remuneration related costs.
(2) Vested TIP in 2021 is nil given no shares awarded in relation to 2020 TIP.
1,020,937
1,020,000
1,020,000
520,937
518,083
163,254
TFR1
$
TIP
$
Vested
TIP2
$
Total
$
905,625
–
1,926,562
–
202,105
1,222,105
155,250
1,117,844
2,293,094
357,500
–
9,844
–
12,412
–
–
878,437
530,495
173,098
2,804,999
1,541,874
1,263,125
1,538,083
1,183,254
–
214,517
1,752,600
165,094
1,117,844
2,466,192
47
Remuneration Report
(Continued)
F. Contractual Arrangements with Executive KMP
Remuneration and other terms of employment for Executive KMP are formalised in employment contracts. All Executive KMP are employed
under contracts with substantially similar terms. The key elements of these employment contracts are summarised below:
Contract duration
Notice by individual/Company
Termination of employment (for cause)
Termination of employment (without cause)
Redundancy
Non-compete/restraint
Continuing
Employment may be terminated by either party. Notice periods vary
according to contractual terms: CEO & Managing Director – 12 months
and CFO – six months.
All contracts provide that employment may be terminated at any time
without notice for serious misconduct.
Where employment is terminated by the Company, payment may be
made in lieu of notice.
If the Company terminates the employment of an Executive KMP for
reasons of redundancy, a redundancy payment would be paid depending
on the length of their service. Benefits paid as defined by Corporations
Regulations 2001 Reg 2D.2.02 cannot exceed 12 months base salary
(average of past three years).
Payments for redundancy and accrued leave entitlements are not subject
to this cap.
Executive KMP are subject to non-compete provisions for the term of their
notice period.
G. Non-Executive Director Arrangements
Non-executive Directors are provided with written agreements which outline the fees for their contribution as Directors. Fees reflect the
demands which are made on, and the responsibilities of, the Directors. The Remuneration, Nomination and Governance Committee has the
responsibility for reviewing and recommending the level of remuneration for Non-executive Directors in relation to Board and Committee duties.
In 2021, non-executive Directors maintained the 15% fixed remuneration reduction which became effective in 2018 in response to the reduced
size of the HT&E Group, a consequence of the successful divesture of the Group’s legacy print operations.
Non-executive Directors are not eligible to participate in incentive programs or termination payments.
The annual fees provided to Non-executive Directors inclusive of superannuation are shown below:
Role
Board
Audit & Risk Committee
Remuneration, Nomination and Governance
Committee
(1) The Board Chair does not receive Committee fees.
2021
$
2022
$
Chair fee1
284,700
20,000
Member fee
85,000
10,000
Chair fee1
284,700
20,000
Member fee
135,000
10,000
20,000
10,000
20,000
10,000
48
HT&E Annual Report 2021
Remuneration report
(Continued)
Approved Fee Pool
The Non-executive Director fee pool of $1,200,000 per annum was approved by shareholders at the 2015 Annual General Meeting.
There was no change to the Non-executive Director fee pool in 2021 and none is expected for 2022.
Details of the Non-executive Directors’ fees for 2021 and 2020 are set out in the table below:
Non-executive Directors
Hamish McLennan
2021
2020
Roger Amos
2021
2020
Paul Connolly
2021
2020
Belinda Rowe
2021
2020
Total
2021
2020
Fees
$
Superannuation
$
Total
$
263,006
241,550
105,023
96,271
105,023
96,271
95,890
87,900
568,942
521,992
22,631
21,188
10,240
9,146
10,240
9,146
9,349
8,350
52,460
47,830
285,637
262,738
115,263
105,417
115,263
105,417
105,239
96,250
621,402
569,822
49
Remuneration Report
(Continued)
H. Share-Based Remuneration
Terms and Conditions of Share-Based Remuneration
2021 TIP Awards
Executive KMP received a grant of rights under the 2021 TIP during 2021. Based on HT&E’s performance, rights have been awarded at the end of
2021 to satisfy TIP outcomes. Rights will vest at the end of the one-year service period. The table below shows the number and value of 2021
rights that were awarded and remain unvested at the end of 2021.
Executive KMP
Grant date1
Vesting Date
Ciaran Davis
16 February 2021
31 December 2022
Andrew Nye
16 February 2021
31 December 2022
Number of
rights
granted
533,006
200,843
Number of
rights
awarded
508,779
200,843
Number of
rights
forfeited
24,227
–
Value per
right
at grant date
$
Maximum value
to be recognised
in future years
$
2.02
2.02
513,867
202,851
(1) The date on which the fair value of the TIP rights was calculated, being the deemed grant date of the rights for accounting purposes.
Reconciliation of Rights
The table below shows a reconciliation of the number of rights held by each Executive KMP from the beginning to the end of the 2021 financial
year. At the Board's discretion, the participants may receive an additional allocation of fully paid ordinary shares equal to the value of dividends
that were payable on the underlying shares, whilst holding unvested and/or vested rights. Where dividends have been declared, these
additional fully paid ordinary shares are included in the rights table below as ‘Dividend uplift’, to reflect the full number of shares the participants
may be entitled to at the conclusion of the vesting period.
Executive KMP
Ciaran Davis
Balance at start
of the year
2019 TIP
Exercised/
vested1
2020 TIP
Exercised/
vested
Awarded
Dividend uplift
Balance at end
of the year
Vested and exercisable
109,246
(109,246)
Unvested
Total
Andrew Nye
Vested and exercisable
Unvested
Total
Total
–
–
109,246
(109,246)
6,709
–
6,709
(6,709)
–
(6,709)
Vested and exercisable
115,955
(115,955)
Unvested
Total
–
–
115,955
(115,955)
–
–
–
–
–
–
–
–
–
–
508,779
508,779
–
200,843
200,843
–
709,622
709,622
–
15,342
15,342
–
6,057
6,057
–
21,399
21,399
–
524,121
524,121
–
206,900
206,900
–
731,021
731,021
(1) Held in trust until the end of the 2-year holding lock which is 31 Dec 2022 for the 2019 TIP.
50
HT&E Annual Report 2021
Remuneration report
(Continued)
I. Non-Executive Director and Executive KMP Shareholdings
The number of shares in the Company held by each Non-executive Director and Executive KMP during the year including their related parties is
summarised below:
Non-executive Directors
Hamish McLennan
Roger Amos
Paul Connolly
Belinda Rowe
Executive KMP
Ciaran Davis
Andrew Nye
Balance at start
of the year
TIP shares released1
Other changes
during the year
Balance at
end of the year
73,000
16,250
65,935
–
560,662
50,476
–
–
–
–
659,495
–
–
–
–
–
–
–
73,000
16,250
65,935
–
1,220,157
50,476
(1) 659,495 of shares for the 2018 TIP released from the two-year holding lock. The two-year holding lock for the 115,955 of shares for the 2019 TIP exercised in
section H(ii) ends on 31 December 2022 and will be added to the KMPs’ shareholding at that time.
J. Other Statutory Disclosures
Loans Given to Non-Executive Directors and Executive KMP
There are no loans from the Company to the Non-executive Directors or Executive KMP.
Transactions with Related Parties
$75,172 director fees received from Soprano Design Pty Limited by Belinda Rowe for services performed.
Securities Trading Policy and Guidelines
The Company’s Securities Trading Policy and Guidelines is outlined in the Corporate Governance Statement, which can be found on the Company
website. Under the policy, restricted persons, which include Executive KMP, are not permitted to hedge any options, rights or similar instruments
prior to them becoming vested or otherwise tradable under the applicable plan.
Voting and Comments Made at the Company’s 2021 AGM
The Company received more than 99% of ‘yes’ votes on its Remuneration Report for the 2020 financial year. No major remuneration related
concerns were raised which required the Company’s attention during the 2021 financial year.
External Remuneration Consultants
Mercer Consulting Australia (Mercer) was engaged by HT&E to benchmark the Board and Executive KMP Remuneration framework and report on
their findings. Mercer was paid $110,000 for these services. The scope included;
•
•
•
•
Establishing a relevant peer group of companies to benchmark against
Reviewing the existing HT&E Executive KMP remuneration framework and packages against the benchmark
Assessing the Executive KMP TIP framework
Reviewing Non-Executive Director fees against the benchmark
Mercer has confirmed that any remuneration recommendations have been made free from undue influence by members of the Group’s KMP.
The following arrangements were made to ensure that the remuneration recommendations were made free from undue influence;
• Mercer was engaged directly by the Group Chief People Officer (not an Executive KMP) on behalf of the Remuneration Nomination
and Governance Committee
•
•
•
The Remuneration Nomination and Governance Committee reviewed the scope of work prior to commencement
The reports containing findings and recommendations were provided by Mercer directly to the Group Chief People Officer
The findings and recommendations were presented by the Group Chief People Officer directly to the Remuneration, Nomination and
Governance Committee
Consequently, the Board is satisfied that the recommendations were made free from undue influence from any members of Executive KMP.
Auditor’s Independence Declaration
As lead auditor for the audit of HT&E Limited for the year ended 31 December 2021, I declare that to
the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of HT&E Limited and the entities it controlled during the period.
Louise King
Partner
PricewaterhouseCoopers
23 February 2022
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
52
Consolidated Financial Statements
About the Financial Statements
•
•
•
•
•
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
Note
53
2020
$’000
2021
$’000
225,036
18,965
244,001
(184,313)
–
–
2,019
(12,743)
(13,871)
9,786
44,879
(26,232)
18,647
(438)
–
(298)
2,322
–
1,586
20,233
14,830
3,817
18,647
16,416
3,817
20,233
Cents
Cents
5.4
54
Consolidated Balance Sheet
As at 31 December 2021
2020
$’000
Note
2021
$’000
257,068
–
51,351
–
1,896
310,315
4,196
52,561
18,778
372,613
23,424
–
1,683
473,255
783,570
41,461
4,966
9,956
20,511
6,720
83,614
67,250
21,664
4,097
111,603
204,614
288,228
495,342
1,475,706
(42,676)
(974,339)
458,691
36,651
495,342
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
55
Note
2021
$’000
2020
$’000
238,387
(187,162)
–
–
422
(3,205)
(9,794)
–
38,648
(3,297)
(14)
32
63,628
–
50,000
–
3,667
6,599
120,615
65,003
(80)
(14,278)
(10)
(9,675)
(5,046)
(3,216)
32,698
191,961
65,080
27
257,068
56
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Contributed
equity
$’000
Reserves
$’000
Accumulated
losses
$’000
Note
Non-
controlling
interests
$’000
Total
$’000
493,406
(42,501)
21,370
(1,771)
(2,933)
(12,840)
–
1,792
(331)
–
456,192
456,192
14,830
1,586
633
(5,046)
(9,675)
–
181
(10)
458,691
Total
equity
$’000
529,905
(39,099)
21,370
(1,771)
(2,933)
(12,840)
–
1,792
(331)
(3,850)
492,243
492,243
18,647
1,586
633
(5,046)
(9,675)
–
181
(10)
(3,217)
495,342
57
2020
$’000
Notes to the Consolidated Financial Statements
1. Group Performance
Note
2021
$’000
182,989
32,666
8,963
418
225,036
17,931
–
–
699
18,630
335
18,954
244,001
58
Notes to the Consolidated Financial Statements
Type of product/service Segment
Nature and timing of satisfaction of performance obligations
•
•
•
59
2020
$’000
Notes to the Consolidated Financial Statements
Note
2021
$’000
106,014
13,060
34,011
7,396
3,443
3,524
1,624
5,734
1,958
428
–
–
–
–
7,121
184,313
1,540
1,756
8,912
535
12,743
9,945
3,171
755
13,871
60
Notes to the Consolidated Financial Statements
Reportable segment
Principal activities
2021
$’000
Australian
Radio
Network
HK
Outdoor
Investments
Corporate
Group
elimination
Total
225,036
9,089
59,815
783,570
288,228
59,815
(13,871)
(12,408)
(428)
(1,958)
(5,734)
2,716
17,931
(1,184)
44,879
Notes to the Consolidated Financial Statements
2020
$’000
Australian
Radio
Network
HK Outdoor
Investments
Corporate
Group
elimination
61
Total
196,061
5,998
49,336
693,263
201,020
49,336
(16,817)
(3,794)
10,728
(54,178)
(7,093)
(4,394)
(1,458)
(350)
4,799
350
(450)
(23,321)
62
Notes to the Consolidated Financial Statements
2020
$’000
2021
$’000
14,830
14,830
Number
Number
276,605,346
–
348,259
276,953,605
•
•
•
•
Notes to the Consolidated Financial Statements
63
2. Operating Assets and Liabilities
2020
$’000
Goodwill
Software
Radio
licences
Brands
Total
490
2,382
371,040
–
373,912
490
2,382
371,040
–
373,912
2021
$’000
Goodwill
Software
Radio
licences
Brands
Total
379,528
(6,915)
490
1,316
370,807
–
372,613
373,912
14
–
(558)
(755)
–
–
490
1,316
370,807
–
372,613
64
Notes to the Consolidated Financial Statements
Asset
Useful life
Amortisation
method
Acquired or
Internally generated
.
Notes to the Consolidated Financial Statements
65
Name of CGU
2020
Other non-
amortising
intangible
assets
$’000
2020
Goodwill
$’000
2021
Other non-
amortising
intangible
assets
$’000
367,451
–
367,451
2021
Goodwill
$’000
–
490
490
66
Notes to the Consolidated Financial Statements
•
•
Name of CGU(i)
Dec 2021
Post-tax
discount
rate
9.0%
Dec 2021
Pre-tax
discount
rate
12.2%
Dec 2021
Long-term
growth rate
1.5%
Dec 2020
Post-tax
discount
rate
Dec 2020
Pre-tax
discount
rate
Dec 2020
Long-term
growth rate
Notes to the Consolidated Financial Statements
67
•
•
•
68
Notes to the Consolidated Financial Statements
2020
$’000
Freehold
land
Buildings
Plant and
equipment
2,391
953
15,736
Total
79,169
(61,933)
1,844
19,080
22,132
1,881
(3,152)
(1,685)
(148)
60
(8)
2,391
953
15,736
19,080
2021
$’000
Freehold
land
Buildings
Plant and
equipment
2,391
909
15,478
Total
80,429
(64,697)
3,046
18,778
19,080
3,297
(3,171)
(367)
(66)
–
5
2,391
909
15,478
18,778
Notes to the Consolidated Financial Statements
69
•
•
70
Notes to the Consolidated Financial Statements
2020
$’000
2021
$’000
16,138
7,147
139
23,424
9,956
21,664
31,620
Notes to the Consolidated Financial Statements
71
2020
$’000
2021
$’000
3,439
6,201
305
9,945
1,540
2,332
465
72
Notes to the Consolidated Financial Statements
•
•
•
•
•
•
•
•
Notes to the Consolidated Financial Statements
73
•
•
•
•
74
Notes to the Consolidated Financial Statements
2021
$’000
6,270
450
6,720
1,212
2,885
4,097
Other
$’000
2021
Provision for
uncertain tax
treatment
$’000
–
3,335
2020
$’000
Total
$’000
4,236
3,641
(3,609)
(945)
12
3,335
Notes to the Consolidated Financial Statements
75
76
Notes to the Consolidated Financial Statements
3. Capital Management
2020
$’000
Note
2021
$’000
68,000
68,000
2,511
(1,761)
750
67,250
67,250
750
(257,068)
–
(189,068)
•
•
•
•
Notes to the Consolidated Financial Statements
Entities in the Group have access to:
77
2020
$’000
2021
$’000
258,826
(71,648)
187,178
1,500
–
1,500
78
Notes to the Consolidated Financial Statements
2020
$’000
2021
$’000
257,068
18,647
13,871
535
(9,786)
641
–
–
(2,019)
814
(17,931)
(1)
–
(5,635)
1,953
16,437
21,122
38,648
Notes to the Consolidated Financial Statements
79
80
Notes to the Consolidated Financial Statements
Note
2020
$’000
2020
$’000
2020
$’000
2021
$’000
48,835
(269)
48,566
2,785
51,351
2021
$’000
585
(236)
(80)
269
2021
$’000
44,942
3,193
451
95
154
48,835
Notes to the Consolidated Financial Statements
81
2020
2021
Less than one
year
$’000
Between one and
two years
$’000
Between two and
five years
$’000
Over five
years
$’000
Note
–
Less than one
year
$’000
Between one and
two years
$’000
Between two and
five years
$’000
Over five
years
$’000
Note
82
Notes to the Consolidated Financial Statements
•
•
•
•
•
•
2020
2021
Note
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
Note
Level 1
$’000
Level 2
$’000
Level 3
$’000
688
45,895
46,583
2,391
953
3,344
Total
$’000
4,196
4,196
2,391
909
3,300
Notes to the Consolidated Financial Statements
83
2020
$’000
2020
$’000
2021
$’000
1,475,706
2021
$’000
1,480,752
(5,046)
1,475,706
2021
Number shares
2020
Number shares
278,196,267
(3,041,367)
275,154,900
84
Notes to the Consolidated Financial Statements
Incentive plan
Vesting date
Weighted
average fair
value
2021
Number of
rights
115,955
765,802
(115,955)
23,094
788,896
Rights
2021
–
788,896
788,896
2021
1.0 years
2020
Number of
rights
2020
2020
Notes to the Consolidated Financial Statements
85
2020
$’000
2021
$’000
2,403
1,074
8,696
–
(53,283)
(1,566)
(42,676)
2,403
–
2,403
1,810
–
(438)
(298)
1,074
8,131
814
(68)
(181)
–
8,696
19,473
2,322
(21,795)
–
(53,283)
(53,283)
(1,737)
(10)
–
181
86
Notes to the Consolidated Financial Statements
2020
$’000
2021
$’000
(1,001,357)
14,830
21,863
(9,675)
(974,339)
Notes to the Consolidated Financial Statements
87
2020
$’000
2021
$’000
–
–
9,675
9,675
9,675
14,729
12,133
88
Notes to the Consolidated Financial Statements
4. Taxation
2020
$’000
2021
$’000
6,962
29,455
(8,103)
(2,082)
26,232
44,879
13,464
(243)
371
1,720
–
–
(4,326)
(297)
(2,936)
(2,082)
29,455
(9,341)
447
26,232
Notes to the Consolidated Financial Statements
89
90
Notes to the Consolidated Financial Statements
•
•
•
•
•
Notes to the Consolidated Financial Statements
2020
2021
Balance
1 Jan 20
$’000
Recognised in
profit or loss
$’000
Recognised
in equity
$’000
Other
movements
$’000
Offset
$’000
–
–
–
–
–
–
–
–
–
–
–
Balance
1 Jan 21
$’000
Recognised in
profit or loss
$’000
Recognised
in equity
$’000
Other
movements
$’000
Offset
$’000
91
Balance
31 Dec 20
$’000
1,588
150
2,258
(110,234)
(50)
(5,465)
7,213
(7,054)
(8,344)
(20)
(119,958)
Balance
31 Dec 21
$’000
2,161
79
2,296
–
(110,234)
1,421
(4,603)
6,297
(7,796)
(1,052)
(172)
(111,603)
92
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
93
5. Group Structure
Name of entity
Country of incorporation/
establishment
Equity holding
2021
%
2020
%
100
100
100
100
100
100
100
100
100
100
100
100
100
50
100
50
100
50
100
100
100
100
100
100
100
51
100
100
100
100
100
100
100
100
100
94
Notes to the Consolidated Financial Statements
Name of entity
Country of incorporation/
establishment
2020
%
Equity holding
2021
%
100
100
50
100
100
100
50
100
100
100
100
100
100
100
Notes to the Consolidated Financial Statements
95
Name of entity
Place of
business and country of
incorporation
Ownership interest
held by the Group
Ownership interest held by non-
controlling interests
2021
2020
2021
2020
Principal activities
Brisbane FM Radio Pty Ltd
2020
$’000
2021
$’000
10,864
1,031
9,833
67,318
47
67,271
77,104
38,552
22,742
6,855
–
6,855
3,428
1,342
5,835
–
(5,667)
168
96
Notes to the Consolidated Financial Statements
Note
2021
$’000
4,196
2020
$’000
Notes to the Consolidated Financial Statements
97
2020
$’000
Note
2021
$’000
52,561
52,561
9,786
Name of entity
Place of
business/
country of
incorporation
Ownership
interest
2021
25%
50%
Nature of
relationship
Measurement
method
2020
2021
$’000
51,320
9,786
(298)
(6,599)
–
2,019
(3,667)
52,561
Consolidated
carrying values
2020
$’000
2021
$’000
19,551
33,010
2020
$’000
98
Notes to the Consolidated Financial Statements
–
•
•
•
Dec 2021
Post-tax
discount
rate
9.0%
Dec 2021
Pre-tax
discount
rate
12.4%
Dec 2021
Long-term
growth rate
1.5%
Dec 2020
Post-tax
discount
rate
Dec 2020
Pre-tax
discount
rate
Dec 2020
Long-term
growth rate
In $’000s
+1.5%
-1.5%
+0.5%
-0.5%
+10%
-10%
Discount Rate
change
Long-term growth
rate change
Terminal EBITDA
forecast change
Notes to the Consolidated Financial Statements
99
100
Notes to the Consolidated Financial Statements
2021
$’000
2020
$’000
290
1,044,108
41,792
830,002
214,106
1,475,706
8,697
22,543
(9,675)
12,868
–
12,868
(1,068,586)
(214,579)
(1,283,165)
214,106
(214,579)
(214,579)
Notes to the Consolidated Financial Statements
101
2020
$’000
2021
$’000
165,072
26,562
(138,286)
(5,157)
–
(11,743)
(5,762)
9,786
40,472
(23,136)
17,336
(1,118,571)
17,336
(9,675)
21,863
(1,089,047)
102
Notes to the Consolidated Financial Statements
2020
$’000
2021
$’000
252,704
–
157,883
–
650
411,237
185,202
52,561
16,939
15,375
296,019
–
322
566,418
977,655
177,568
773
2,463
20,463
6,178
207,445
67,294
18,526
3,748
111,753
201,321
408,766
568,889
1,475,706
182,230
(1,089,047)
568,889
568,889
103
Notes to the Consolidated Financial Statements
6. Other
2020
$
2021
$
821,492
79,671
42,448
9,505
953,116
392,802
41,200
–
21,305
455,307
104
Notes to the Consolidated Financial Statements
2021
$
2020
$
Type of transaction
Class of other related party
2021
$
2020
$
Notes to the Consolidated Financial Statements
105
•
•
•
106
Notes to the Consolidated Financial Statements
•
•
•
IFRS Interpretations Committee Agenda Decision Configuration Costs in a Cloud Computing Arrangement
ARN Regional
2021
$
Directors' Declaration
107
Independent auditor’s report
To the members of HT&E Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of HT&E Limited (the Company) and its controlled entities (together the Group)
is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 31 December 2021 and of its financial
performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
●
●
●
●
●
●
the consolidated balance sheet as at 31 December 2021
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include significant accounting policies and other
explanatory information
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the Corporations
Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110
Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo NSW 2000, GPO BOX 2650 Sydney NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial report as a whole, taking into account the geographic and management structure of the Group, its
accounting processes and controls and the industry in which it operates.
Materiality
● For the purpose of our audit we used overall Group materiality of $2,200,000, which represents
approximately 5% of the Group’s profit before tax.
● We applied this threshold, together with qualitative considerations, to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the
financial report as a whole.
● We chose Group profit before tax because, in our view, it is the benchmark against which the performance
of the Group is most commonly measured.
● We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
Audit Scope
● Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
● The Group audit was aligned with the structure of the Group.
● The nature, timing and extent of audit work required on each component of the Group was determined by
the component's risk characteristics and financial significance to the Group and consideration as to
whether sufficient evidence had been obtained for our opinion on the financial report as a whole. The audit
work involved:
−
−
−
an audit of the Australian Radio Network financial information
specific risk focused audit procedures over Cody Outdoor International (HK) Limited financial
information
specific risk focused analytical procedures at the Group level.
−
further audit procedures at a Group level, including over the consolidation of the Group's reporting
units and the preparation of the financial report.
● For the work performed by other auditors (“component auditors”) of Cody Outdoor International (HK),
Soprano Design Limited, Nova Entertainment (Perth) Pty Limited and Group Financial Services shared
service centre operating under our instructions, we determined the level of involvement we needed to have
in the audit work at those locations to be satisfied that sufficient audit evidence had been obtained. We
communicated regularly with these component audit teams during the year through face-to-face meetings,
phone calls, and written instructions where appropriate
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report for the current period. The key audit matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. Further, any commentary on the outcomes of a particular audit procedure is made in that context.
We communicated the key audit matters to the Audit and Risk Committee.
Key audit matter
How our audit addressed the key audit matter
Impairment of intangible assets
(Refer to note 2.1) $367m
We performed the following procedures, amongst
others:
The Group has $367m of non-amortising intangibles
assets as at 31 December 2021, which relate to the
Australia Radio licences within the Australian Radio
Network (ARN) cash generating unit (CGU). These
are required by Australian Accounting Standards to
be tested annually for impairment at the CGU level.
In order to assess the recoverability of these assets,
the Group prepared a financial model as at 31
December 2021 to determine if the carrying value
was supported by forecasted future cash flows,
discounted to present value (“the model”).
The assessment of impairment was a key audit
matter due to the quantum of the balance as well as
the judgements and assumptions applied in
estimating the forecasted cash flows, growth rates
and discount rates.
●
considered whether the impairment model used
to estimate the recoverable amount of the assets
was consistent with the requirements of the
Australian Accounting Standards
●
●
●
●
●
●
compared forecast cash flows used in the model
to Board approved budgets
assessed the Group’s historical ability to forecast
future cash flows for the business by comparing
budgeted amounts to reported actual results for
the past five years
assessed if the discount rate assumption was
appropriate by comparing it to market data,
comparable companies and industry research,
with the assistance of our valuation specialists
assessed the appropriateness of the key
assumptions within the model compared to
observable market information where available,
and considered management’s ability to carry out
courses of action
tested the mathematical accuracy on a sample
basis of the model’s calculations
considered the Group’s sensitivity analysis on the
key assumptions used in the model to assess
Key audit matter
How our audit addressed the key audit matter
under which assumptions an impairment would
occur and whether this was reasonably possible
●
evaluated the adequacy of the disclosures made
in note 2.1, including those regarding the method
of measurement, the key assumptions, and the
reasonable possible change thereof, in light of the
requirements of Australian Accounting Standards.
Other information
The directors are responsible for the other information. The other information comprises the information included
in the annual report for the year ended 31 December 2021, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This
description forms part of our auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 35 to 50 of the directors’ report for the year ended 31
December 2021.
In our opinion, the remuneration report of HT&E Limited for the year ended 31 December 2021 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.
PricewaterhouseCoopers
Louise King
Partner
Sydney
23 February 2022
Shareholder information
1. Shares
Name
Name
113
Number
of shares
Number
of shares
% of
total shares
298,418,479
96.1%
114
Shareholder information
Holding
Number of
shareholders
% of total
shareholders
Number
of shares
% of
total shares
5,380
100.00
311,089,791
100.00
•
•
2. Unquoted Securities
3. Directors’ Interests
Director
4. Other Information
Number
of shares
Number
of options
Shareholder information
115
116
Corporate Directory
2022 Annual General Meeting
Notice is given that the 2022 Annual General
Meeting (AGM) of HT&E Limited will be held on
Thursday 5 May 2022 commencing at 9:00am.
Depending on the prevailing COVID-19 situation,
the Company reserves the right not to allow
Shareholders to physically attend the AGM. Prior to
the AGM, the Company will publish a virtual meeting
guide on the ASX and the Company’s website at
https://investorcentre.htande.com.au outlining
how Shareholders will be able to participate via
the internet.
HT&E LIMITED
ABN 95 008 637 643
Directors
Hamish McLennan (Chairman)
Ciaran Davis (CEO & Managing Director)
Roger Amos
Paul Connolly
Belinda Rowe
Alison Cameron (from 5 January 2022)
Company secretary
Jeremy Child
Registered office
3 Byfield St, Macquarie Park
Sydney NSW 2113
Telephone: +61 2 8899 9900
Share registry
Link Market Services Limited
Level 12, 680 George Street
SYDNEY NSW 2000
Locked Bag A14
SYDNEY SOUTH NSW 1235
Telephone: +61 1300 553 550
Fax: +61 2 9287 0303
Email: registrars@linkmarketservices.com.au
Website: www.linkmarketservices.com.au
Auditors
PricewaterhouseCoopers
One International Towers Sydney
Watermans Quay
BARANGAROO NSW 2000
Principal bankers
Bank of Queensland
Commonwealth Bank of Australia
HSBC
National Australia Bank
Westpac Banking Corporation
htande.com.au
HT&E Annual Report 2021