ANNUAL REPORT 2022
ALL AUDIO
More Connections that Count
HT&E owns Australia’s leading audio
company, ARN, connecting with over
8 million people1 each week through
broadcast and digital audio, across
every state and territory in Australia.
ARN delivers creative solutions for
advertisers that take advantage of the
full Audiosphere – from radio to music
streaming, podcasting and beyond.
The Group also maintains a number
of other investments across the media
and advertising sector.
HT&E Annual Report 2022 1
In this report
2 About
36 Board of Directors
6 Delivering our strategy
38 Senior management team
8 Chairman’s letter 2022
10 CEO’s letter 2022
12 Operating and Financial Review
16 Review of operations
22 2022 Awards
24 Environmental, Social and
Governance: InTune @ARN
26
InTune with Our Communities
30
InTune with Our Team
32
InTune with Our Planet
34
InTune with Best Practice
40 Directors’ Report and
Financial Report
46 Remuneration Report
62 Auditor’s Independence Declaration
63 Consolidated Financial Statements
120 Directors’ Declaration
121 Independent Auditor’s Report
127 Shareholder Information
130 Corporate Directory
2023 was ARN’s
best year ever.
#1
Metro Radio Network1
(12.7% YoY increase)
and highest annual
cume average)
5.9m
#1
Podcast Publisher2
download growth YoY3
+45%
1. GfK CY2022 Metro Radio, People 10+,
Mon–Sun 0530–12mn #1 based on share, increase based on cumulative reach
unless otherwise stated ratings, Xtra Insights regional ratings, most recent surveys.
2. Triton Digital Podcast Ranker, December 2022 (excludes New York Times).
3. Triton Australian Podcast Ranker, CY2022 vs CY2021.
Kian, Avneesha, Yaz – CADA
2
About
Creating quality connections for audiences and advertisers.
ARN’s ambition is to build the best radio and digital
audio business in Australia, offering our audiences
and clients a gateway to develop deeper connections
in the booming world of audio.
Content
Connecting Australian communities through Australia’s greatest depth and
breadth of audio content across live, local and on-demand formats.
Broadcast Networks
On-air talent
Podcasting
We are committed to maintaining the
46 local brands that act as a pillar of the
community they broadcast in. Just some
of those are represented here.
HT&E Annual Report 2022 3
A leading enabler for enterprise
communications within the CPaaS
industry, Soprano delivers secure
business mobile messaging
software solutions for large
organisations worldwide.1
A creative 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 in Hong Kong.
Commercialisation & Partnerships
Enabling access to our audience through
effective all-of-audio solutions and partnerships.
Distribution
Everywhere our listeners are connecting:
Broadcast Radio, DAB+ and Digital Streaming.
ARN is focused on
creating the content
that our audience
seek, delivering it
in the format they
want to hear it and
enabling access to
those audiences
for advertisers.
1. ARN announced the signing of a binding
share sale agreement on 3 January 2023, with
the sale conditional on the Foreign Investment
Review Board (FIRB) approval and expected to
complete in the first half of 2023.
Jase & Lauren – KIIS 101.1 Melbourne
44
HT&E Annual Report 2022
Creating over 8 million
connections every day
We are everywhere our listeners are,
providing the greatest breadth and
depth of audio content across every
state and territory in Australia.
At ARN we deliver unparalled live
and local content to over 8 million
people1 each week, connecting them
to their communities.
We enrich 4.7 million podcast
listeners2 lives, who access our
podcasts on-demand via every
available major digital audio platform.
And through offering a curated
listening experience, more than
2.4 million people3 have registered
on iHeartRadio to date.
Radio audience nationally
(weekly)1
Over 8m
YoY growth (Up 63%)
Digital websites reach
(monthly)4
Streaming listening hours
(+5% YoY)5
1.5m
124m
Galey & Emily Jade – Hot Tomato Gold Coast
HT&E Annual Report 2022HT&E Annual Report 2022 5
A strategic focus on delivering a variety of content
and listening options enabled by digital audio has
contributed to increasing our total audience footprint
across the last 12 months.
6
#1 Network
5.9m 12.7%
Best ever cume
YoY growth
#1FM
Melbourne Breakfast1
for GOLD 104.3’s Christian O’Connell
(21 in a row)
#1FM
Sydney Breakfast1
for KIIS 1065’s Kyle & Jackie O
(32 in a row)
1. Broadcast Radio, People 10+, Mon–Sun 0530–12mn unless otherwise stated – Gfk Metro radio
ratings, Survey 8, 2022, Xtra Insights regional ratings, most recent surveys.
2. Triton Digital Podcast metrics, December 2022 (excludes New York Times).
3. Adobe Analytics, iHeartRadio Australia Registration Data, Lifetime Users, Unique Visitors, 2022.
4. Google Analytics – ARN Metro Web Assets – Dec 2022.
5. AdsWizz/StreamGuys, Total Radio Streaming, Total Listening Hours 2022 vs 2021.
6. GfK CY2022 Metro Radio, People 10+, Mon–Sun 0530–12mn #1 based on share, increase
based on cumulative reach unless otherwise stated ratings, Xtra Insights regional ratings, most
recent surveys.
#1
ARN Regional Stations1
Hot Tomato
in the Gold Coast
Hitz 93.9
in Bundaberg
Hot 100
in Darwin
Star 102.7
in Cairns
Zinc 96.1
in Gympie
Power FM
in Ballarat
River 94.9
in Ipswich
Chilli FM
in Launceston
Star 101.9
in Mackay
666
Delivering our strategy
ARN’s 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.
Following the acquisition of a portfolio of
46 regional radio stations (ARN Regional)
from Grant Broadcasters on 4th January
2022, we were focused on integrating
ARN Regional while continuing to
grow our leading metro and podcast
network positions.
We did this in a considered and
deliberate way that ensured a
strengthening of core operations under
the strategic focus areas maintained
from 2021, with additional focus on
improving our culture through building
an engaged and thriving workforce.
Our strategic
focus areas
Our critical
priorities
ARN Key Performance
Indicators (KPIs)
Christian O’Connell – GOLD 104.3 Melbourne
Scale of audiences
We continued to grow our audience across broadcast radio, digital audio streaming and podcasting
though a considered content strategy that deliver Australia’s most popular content from world
class talent.
Multi-platform
content delivery
Continued evolution of the ‘podcast to broadcast’ strategy, launch of youth based brand CADA and
continued investment in the iHeart streaming platform have leveraged digital channels to expand our
total audience footprint and meet our audiences’ audio needs, wherever they may be.
Increasing digital
data and targeting
capabilities
Improved technical and operational capabilities has allowed for better performance monitoring and
to deliver more robust total audio targeting solutions for clients.
Ease of transaction
Optimisation of the Commercial team structure and national commercial products along with the
digital platforms that enables them, has improved our overall service delivery for clients.
Engaged and
thriving workforce
Continued embedding of our Culture In Action and development programs across leadership and
other critical capabilities has improved operational efficiencies and team engagement.
HT&E Annual Report 2022HT&E Annual Report 2022 77
Three pillars for growth
Content
Connecting Australian
communities through
Australia’s greatest depth
and breadth of audio
content across live, local
and on-demand formats.
Distribution
Everywhere our listeners
are connecting:
Broadcast Radio, DAB+
and Digital Streaming.
Innovation
Enabling access to
our audience through
effective all-of-audio
solutions and
partnerships.
Events &
Experiences
Audio
Branding
Radio
Audio
Innovation
Dynamic
Audio
DAB+
Streaming
Digital
Podcasts
ARN’s Audiosphere delivers the most
complete audio solutions in Australia
Our strategic
focus areas
Our critical
priorities
ARN Key Performance
Indicators (KPIs)
Scale of audiences
We continued to grow our audience across broadcast radio, digital audio streaming and podcasting
though a considered content strategy that deliver Australia’s most popular content from world
class talent.
Multi-platform
content delivery
Continued evolution of the ‘podcast to broadcast’ strategy, launch of youth based brand CADA and
continued investment in the iHeart streaming platform have leveraged digital channels to expand our
total audience footprint and meet our audiences’ audio needs, wherever they may be.
Increasing digital
data and targeting
capabilities
Improved technical and operational capabilities has allowed for better performance monitoring and
to deliver more robust total audio targeting solutions for clients.
ARN listenership (surveyed stations)1
Registered users (lifetime)2
6.8m
Metro Network
(Up 24% YoY)
2.1m
Regional Network
2.4m
(Up 13% YoY)
2.44m
2.17m
1.88m
2022
2021
2020
CADA brand growth (total audience connections)1
Podcast downloads (Dec 2021 to Dec 2022)3
+35%
P18–39
59k
43k
57k
2021
2022
2020
ARN revenue
$314.8m
(Up 61% YoY)
ARN Revenue
$314.8m
$195.6m
2021
$171.5m4
2020
2022
+40%
290m
Podcast downloads
290m
207m
126m 2020
2022
2021
Ease of transaction
Optimisation of the Commercial team structure and national commercial products along with the
digital platforms that enables them, has improved our overall service delivery for clients.
ARN EBITDA
ARN digital revenue
$86.5m
(Up 61% YoY)
$86.5m
$53.8m
2021
$46.0m4
2020
2022
$14.6m
(Up 56% YoY)
$14.6m
$9.4m
$6.3m4
2021
2020
2022
Engaged and
thriving workforce
Continued embedding of our Culture In Action and development programs across leadership and
other critical capabilities has improved operational efficiencies and team engagement.
1. Broadcast Radio, People 10+, Mon–Sun 0530–12mn unless otherwise stated – Gfk Metro radio ratings, Survey 8, 2022, GfK Regional Ratings Survey 3,
2022, Xtra Insights regional ratings, most recent surveys.
2. Adobe Analytics, iHeartRadio Australia Registration Data, Lifetime Users, Unique Visitors, 2022 vs 2021 vs 2020.
3. Triton, ARN Network Total, Jan–Dec 2022 vs Jan–Dec 2021 vs Jan–Dec 2020.
4. Excluding disposed businesses.
8
Chairman’s letter 2022
2022 has been a transformational year for HT&E
as we continued to deliver on our goal to be the
best audio business in Australia.
I am pleased to report another strong
performance for your business in a year
of considerable change. The Company
successfully completed the acquisition
of the largest regional radio network
in the country creating a truly national
broadcasting offering and the integration
programme is already delivering ahead of
expectations. We enhanced our position
as the leading radio broadcaster in the
country, we continued to expand our
digital audio content and monetisation
programme, and at the end of the year,
considerable value was unlocked for
shareholders through the sale of our
minority stake in Soprano for $66.3m cash
subject to FIRB approval.
ARN Regional acquisition
Unique position
What sets our new regional network
apart is our strong belief in the power
of local voices and the need to maintain
local programming and the connections
with regional communities across
the country.
Our unique and critical role in regional
communities was again highlighted
early in the year during the floods in
Queensland. It was our stations that kept
vital information flowing and saved lives
as communities rallied together in times
of need. This vital contribution we make
to Australian life is a responsibility we
take very seriously and are committed
to enhancing.
Our belief in local content also extends
into our news service. At a time when
regional newsrooms are disappearing,
we are elevating our offering across the
network by taking a ‘Local News First’
approach for regional markets, with local
news leading every bulletin between
6am – 9am workdays. This ensures we
create capacity amongst our journalists
to highlight key issues impacting
local audiences and make intimate
connections with listeners.
The Company has always focused on
identifying the right opportunities to drive
shareholder value and the acquisition
of 46 regional stations from Grant
Broadcasters, which became part of
ARN on 4th January 2022, has proven to
be an outstanding acquisition.
Our combined network is made up of
58 stations, 46 DAB+ stations across
33 markets. We represent an additional
77 stations which combined, delivers
more than 8 million listeners1 across
every state and territory in the country.
Exceptional progress was made with the
integration program as we secured our
target of approximately $7 million revenue
synergies in the year, whilst also growing
already strong regional revenues by +7%.
The new commercial structure is now
established and sales training programs
in place and together with the first phase
of the IT integration complete, we are
very pleased with the progress made
and are confident of concluding other
major integration components by the
end of 2023.
The Board has also benefited from
the contributions of new director,
Alison Cameron, who was previously
Chief Executive of Grant Broadcasters and
provided strategic guidance and insight
on the business as we have progressed
through this last 12 months.
ARN is delivering a superior
audio offering for audiences and
advertisers across its portfolio
of brands – KIIS, Pure Gold,
CADA, iHeartRadio and local
brands, which now entertain and
influence more than a third of
Australians each week.
HT&E Annual Report 2022 99
Platform for growth in 2023
The best content attracts the greatest
audiences which creates the most fruitful
commercial opportunities for advertisers
and in 2022, ARN delivered the best
outright ratings performance across the
category. This has laid the foundation for
the business to capitalise on commercial
opportunities from growth in total audio
consumption across 2023 and beyond.
We are focusing on creating even better
content across our networks. Part of
our strategy will mirror what has been
developed in our regional news offering
which lays the foundation for our Future
of News strategy to elevate news content
and position ARN as the industry leader
in short and longform audio news across
broadcast and digital platforms.
HT&E has an enviable owned and
represented podcast portfolio which is
incredibly important to us, and we will
consider further investment where the
content and audience align with our
radio brands, or where we perceive there
to be a commercially attractive under
serviced audience.
This forms part of our strategy
to continue to invest in reaching
new audiences along with our new
multi-platform youth brand CADA.
Strong capital
management focus
Considerable value was realised for
shareholders through the sale of our
long-held investment in Soprano for
$66.3 million in cash to Potentia Capital,
a leading Australian private equity
group focused on technology.
This was a great result given global
CPaaS and technology markets have
been challenged over the past 12 months
and HT&E views this transaction to be
a positive outcome in today’s market,
with Potentia better placed to support
Soprano in its next phase of growth.
The all-cash deal is expected to receive
FIRB approval in March 2023 and enables
the company to focus on its position as
a leading provider of audio services in
Australia, effectively eliminates existing
debt under the current financing facilities
and puts the Group in an enviable
position to take advantage of future
audio entertainment opportunities.
The Board is committed to maintaining
strong dividends for shareholders thanks
to the high cash generating nature of
our business and announced a fully
franked dividend of 5.2 cents per share
to be paid in March 2023. This dividend
is paid from parent entity profits since
1 January 2023.
In addition, HT&E’s accretive share
buy-back was maintained through the
second half delivering improved returns
for shareholders.
The year ahead
As we navigate an uncertain
macroeconomic environment, HT&E
is incredibly well placed to withstand
any potential short-term impacts to
advertising revenues.
We finished the year in a very strong
position with the best outright ratings
performance ever which reflects our
continued commitment to deliver quality
connections through a considered content
strategy, executed by world class talent.
ARN is delivering a superior audio offering
for audiences and advertisers across its
portfolio of brands – KIIS, Pure Gold,
CADA, iHeartRadio and local brands,
which now entertain and influence more
than a third of Australians each week.
There is genuine excitement and belief
in what we are creating amongst our team
and our customers.
Investment in content and platforms is
what we do well, and we will continue
to explore growth initiatives where
appropriate and given the strength of
our balance sheet. We remain particularly
focused on the expanding digital audio
streaming and podcasting sectors where
we have already established a very
strong offering.
Our Board has the right mix of skills and
experience to navigate the opportunities
and challenges which may emerge in 2023
and I would like to thank the directors for
their contribution and dedication.
I would also like to sincerely thank our
people, clients, and shareholders for their
continued support and look forward to
working with you all in the year ahead.
Hamish McLennan
Chairman
1. Broadcast Radio, People 10+, Mon–Sun 0530–12mn unless otherwise stated – Gfk Metro radio ratings, Survey 8, 2022, Xtra Insights regional ratings,
most recent surveys.
10
CEO’s letter 2022
We have extended our lead as Australia’s
best performing audio business across a
range of key metrics.
Despite global and inflationary concerns
impacting H2 consumer and advertising
sentiment, HT&E’s full year results
were in-line with market expectations
and considerable progress was made
delivering on our strategic intent to build
the best broadcast radio and digital
audio business in Australia.
2022 revenue significantly improved
on last year, up 5% to $344.9 million,
on a pro forma basis had HT&E owned
ARN Regional for the 12 months to
31 December 2021.
Costs before interest, tax, depreciation
and amortisation, and significant items
were up 9% to $266.2 million on a pro
forma basis, impacted by cost of sales on
improved revenues, the launch of new
youth platform, CADA in March, further
investment in digital audio capability and
macroeconomic inflationary pressures
driving a level of cost inflation.
Earnings before interest, tax,
depreciation and amortisation (EBITDA)
before significant items were down 4%
to $91.8 million on a pro forma basis.
Operating cash flows before income
taxes of $54.7 million grew 60% on the
prior period.
In ARN, an impairment charge of
$249.9 million was taken in the
second half, reflecting uncertainty
associated with the current
macro-economic environment.
ARN performance
In a highly competitive market, ARN
finished 2022 as the #1 metropolitan
network for people 10+, the #1 network
for people 25–54, and our highest
ever 25–54 audience share and largest
cumulative audience. Across our
metropolitan network, overall listeners
increased by close to 12.7% year on year.
Consistency remains a key part of our
ratings success as ARN continues to
be the #1 metropolitan radio network,
reaching over 6 million people a week
and culminating with our strongest
ever ratings performance in a survey
during 2022.
ARN dominates in the key metropolitan
markets with #1FM stations in Sydney
and Melbourne. In Melbourne,
GOLD104.3 is #1FM in all dayparts,
holding the overall leadership for FM
stations for the 24th consecutive survey,
led by The Christian O’Connell Show. In
Sydney, ARN has maintained its Breakfast
duopoly leadership with KIIS 1065’s
Kyle & Jackie O and WSFM’s Jonesy &
Amanda finishing in the #1FM and #2FM
spots respectively.1
Regionally, we delivered equally
impressive audience results. In the
largest non-metropolitan market, Gold
Coast, ARN’s Hot Tomato increased
cume year-on-year and remained a
strong #1. Of the other regional markets
surveyed featuring ARN stations, ARN
increased cume in five and holds the
#1 position in Bundaberg, Darwin,
Cairns, Mackay, Gympie, Ballarat, Ipswich
and Launceston.2
Australian’s insatiable appetite to
consume more audio showed no signs
of slowing during the year, with the
percentage of the population now
regularly listening to podcasts overtaking
that of the US during the year.
Launched under three years ago, the
iHeart Podcast Network Australia
has grown at scale and maintained
its position as the #1 Publisher on
the Australian Podcast Ranker for
32 consecutive months. Every month,
we now reach 4.7 million listeners via
the podcast network.3
In 2022, we launched several new radio
programs with established podcast
creators, including ‘Life Uncut’ and
‘She’s on the money’, as part of our
‘Podcast to Broadcast strategy’, with
the aims being to bring new younger
audiences into radio and create a path
for the uncovering the next generation
of radio talent.
In 2023 we will continue to invest in both
our owned and represented podcast
portfolio, ad tech & simplify our product
offering for advertisers.
Bigger, Better Together
We were really pleased to complete
the acquisition of what we now call
‘ARN Regional’ on 4th January 2022, and
in doing so, grew our network to deliver
over 8 million listeners across 135 stations
in every state and territory in the country.
We purchased ARN Regional from Grant
Broadcasters, Australia’s most successful,
oldest and family owned regional radio
business. It was critical that through the
integration we maintained the elements
that made it such a success.
We have fiercely protected the localised
nature of the individual regional station
brands and the connections to the
communities they serve, while providing
them with additional tools, opening
up access to centralised resources
such as people and culture, research
and marketing to improve on the
ground operations.
HT&E Annual Report 2022 1111
Australian’s insatiable
appetite to consume
more audio showed
no signs of slowing
during the year, with
the percentage of the
population now regularly
listening to podcasts
overtaking that of the
US during the year.
We are unique in Australia as we strongly
believe in the power of local voices and
have maintained local programming,
with a particular focus on key day parts;
breakfast and drive. We broadcast 226
live and local shows across the network
and where syndicated programming
makes sense, we adapt it to introduce
local voices, ensuring the connection to
the community is never broken.
The acquisition has also allowed us
to expand the distribution of some
of our most successful radio shows.
In January, we replaced all previously
licensed content across the regional
network with ARN original content.
This saw us grow distribution and
audiences for key properties and in turn
deliver greater value for our national
commercial partners.
Our commitment to delivering localised,
quality connections has proven the
investment case for ARN Regional. We
secured approximately $7 million of
revenue synergies in the year, whilst
growing already strong regional
revenues by +7%. Whilst the integration
program of work is substantial, we made
significant progress during the year and
remain on-track to conclude the major
components by the end of 2023.
Building the next generation of
content creators and audiences
With a vision to create a national
multi-platform youth media brand we
launched CADA on 31st March 2022,
delivered by talent representative of
the diversity of young Australia today.
Targeting Australia’s underserviced youth
audience, CADA is consumed in Sydney
on the 96.1FM frequency and around
Australia on iHeartRadio, DAB+ and
across podcast, social and digital.
Our focus for CADA this year has been
on building brand awareness, refining
the content offering and growing the
cross-platform audience. We have been
pleased with the support from our
key commercial partners, with CADA
delivering major integrated campaigns
for marquee clients including Bonds,
Netflix and Collarts.
Return on Investments
Materially improved local market
conditions and strong management
of our network of tunnel advertising
contracts, Cody Outdoor revenue
and earnings increased 9% and 31%
respectively, and the business returned
to cashflow profitability.4 The reopening
of international borders and removal of
quarantine requirements expected in
the first half of 2023 will further assist
the business.
Emotive, an independent creative agency
in which HT&E holds a 51% stake, had
its most successful year to date, further
expanding its client base, improving
revenues and earnings.
Looking to 2023
HT&E is in a strong position to drive
continued shareholder value in 2023 and
beyond and we have a powerful platform
for future commercial growth following
our best outright ratings performance
in 2022.
We believe we have the right formula to
continue to grow our audiences across
both our metropolitan and regional
networks and in digital audio and are
encouraged by Australian’s continued
appetite to consume more audio, and
the increasing willingness of advertisers
to connect with these new audiences.
Building a great place to work
Finally, investment in our people is
part of our DNA and during the year
we further embedded our “Culture in
Action” employee behaviours framework.
Just 18 months into a multi-year program
focused on creating a constructive
workplace culture and are very pleased
with the progress made.
We prioritised investment in a structured
Environmental, Social and Governance
(ESG) program, named ‘Intune @ARN’,
focusing on our Team, Communities,
Planet and Governance. We aim 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.
I am very proud to work with such a
passionate, creative and motivated group
of people and thank them all for their
efforts in another tough year. I would
also like to acknowledge and thank
the great management team that we
have, our Board for their guidance our
shareholders for their continued support.
See you all in 2023.
Ciaran Davis
CEO & Managing Director
1. GfK Radio Ratings, SMBAP, AM/FM/DAB+,
p10+, Mon–Sun, 0530–2359, S8 2022, CY22 vs
CY21 YoY comparison.
2. Gfk Radio Ratings Regional, Xtra Insights
regional ratings, most recent surveys.
3. Triton Australian Podcast Ranker,
December 2023.
4. Adjusted for the loss of HK Tramways contract
from May 2022.
12
Operating and Financial Review
This Operating and Financial Review should
be read in conjunction with the Chairman’s
letter and the Chief Executive Officer’s letter.
Overview
Summary of financial performance
HT&E Limited (HT&E) results for the year
ending 31 December 2022 were impacted
by the acquisition of ARN Regional in
January 2022. Statutory results for the year
benefited from the consolidation of ARN
Regional results. To enable comparability,
this overview discusses both statutory
and pro forma results which have been
adjusted as if HT&E owned ARN Regional
for the year ending 31 December 2021.
The operating results of ARN Metro and
ARN Regional are now presented as a
single operating segment reflective of the
interdependent nature of the underlying
assets and cashflows of the integrated
business. Cody Outdoor and Investments,
containing Emotive and Soprano, remain
separate operating segments in the
financial report.
On a statutory basis, Group revenues
from ordinary activities of $344.9 million
increased $119.9 million on the prior
period. $111.5 million is directly
attributable to ARN Regional, with
the balance predominately due to
strengthening digital audio & Emotive
revenues, offset by lower revenues for
Cody Outdoor following the loss of the
HK Tramways contract in May 2022.
Total group costs were up 52% to
$266.2 million from $175.0 million;
the majority of the increase was
attributable to ARN Regional, further
investment in digital audio, including
the launch of new youth brand, CADA
in March 2022, and expansion of ARN’s
podcast and streaming capability and
commercial offering.
Underlying group earnings before
significant items, interest, tax, depreciation
and amortisation (EBITDA) of $91.8 million
increased by 53% in the period.
The statutory loss attributable to HT&E
shareholders of $176.3 million was
impacted by an impairment charge on
goodwill and other intangible asset
balances in ARN of $249.9 million taken in
the second half.
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
Significant items net of tax4
NPAT attributable to
HT&E shareholders
EBITDA margin
Underlying basic EPS (cents)
Dividend per share (cents)
Dividend per share from 2023
profits (cps)5
Change
53%
>100%
7%
52%
53%
36%
>100%
56%
60%
55%
78%
49%
(12%)
57%
>100%
(>100%)
2022
344.9
3.4
9.7
2021
225.0
0.7
9.1
(266.2)
(175.0)
91.8
(17.8)
(2.4)
71.6
(5.6)
66.0
(17.5)
48.5
(3.4)
45.1
(221.5)
(176.3)
26.6%
14.6
5.0
5.2
59.8
(13.1)
(0.8)
46.0
(3.5)
42.5
(9.9)
32.6
(3.8)
28.8
(13.9)
14.9
26.6%
10.4
7.4
–
1. Totals may not add due to rounding.
2. EBITDA from continuing operations and before significant items, represents the Group’s total
segment result.
3. EBIT from continuing operations and before significant items.
4. Commentary on significant items is included in note 1.3 to the consolidated financial statements.
5. Subsequent event: Dividend declared in February 2023 of 5.2cps to be paid from parent entity
profits since 1 January 2023.
HT&E Annual Report 2022 13
HT&E revenue6
$344.9m
(Up 5% YoY)
2021
2022
$329.5m
$344.9m
HT&E EBITDA6
$91.8m
(Down 4% YoY)
2021
2022
$96.0m
$91.8m
Financial Position
The Group had net assets at
31 December 2022 of $359.4 million,
$133.7 million lower than December 2021
net assets of $493.1 million, driven
largely by the acquisition of ARN
Regional, offset by the impairment of
goodwill and other intangible assets in
the current year.
The acquisition was finalised on
4 January 2022, funded through
a combination of existing cash
reserves and undrawn debt totalling
$249.0 million and the issuance of
35.9 million new HT&E shares with a fair
value of $74.4 million.
The acquisition accounting for ARN
Regional was finalised in the period,
with intangible balances comprising
radio licences ($125.6 million), brands
($31.3 million), customer relationships
($16.6 million) and residual goodwill
($156.8 million) recognised, along
with first year amortisation of
customer relationships.
These intangible asset balances
were subsequently impacted by an
impairment charge recorded in the year.
During the year, the Group also paid the
remaining $20.0 million owing under the
binding heads of agreement reached
with the Australian Tax Office as part
of the New Zealand Branch matter,
completed the sale of its 4KQ Brisbane
radio station and licence for $12.0 million,
disposed its remaining interest in
Lux Group Limited for $8.8 million and
announced the signing of a binding
share sale agreement to sell its 25%
interest in Soprano Design Limited
(Soprano) for $66.3 million cash. The
Soprano sale is conditional upon
receiving FIRB approval and is
expected to be completed in
the first half of 2023.
Underlying Drivers
of Performance
HT&E completed the acquisition of ARN
Regional on 4 January 2022. If HT&E had
owned ARN Regional for the year ending
31 December 2021, pro forma revenues
in 2022 would have been up 5%, from
$329.5 million. On the same pro forma
basis, earnings before interest, tax,
depreciation and amortisation (EBITDA)
before significant items would have been
down 4% from $96.0 million.
Metropolitan broadcast advertising
revenues grew 3.4% to $192.5 million,
with increasing audiences further
strengthening ratings positions and
driving revenue onto key eastern
seaboard stations. Increased revenue
contribution from digital audio on a
pro forma basis, up 8% to $14.6 million
also assisted overall growth.
Regional advertising revenues grew 7%
on a pro forma basis, assisted by federal
government election related spend and
buoyant economic conditions in our key
regional markets of operation.
On a pro forma basis, Group operating
costs increased 9%, with people
and operating expenditure growth
reflecting our continued investment in
digital audio, including the launch of
CADA in the period, and the impacts
of macroeconomic factors driving
cost inflation, labour shortages and
salary pressures.
Depreciation and amortisation expense
of $20.2 million increased by 1% in the
year on a pro forma basis. This resulted
in EBIT before significant items of
$71.6 million compared with $76.0 million
in the prior year on a pro forma basis,
and net profit after tax attributable to
shareholders, before significant items
(NPAT) of $45.1 million.
Details on the significant items totalling
$221.5 million (net of tax), including an
impairment charge on goodwill and other
intangible asset balances in the current
year of $251.8 million are included in
note 1.3 to the Financial Report.
5. Podcast – Triton Digital Podcast Ranker,
December 2022 (excludes New York Times).
6. On a pro forma basis, as if HT&E had
owned ARN Regional for the year ending
31 December 2021.
14
Operating and Financial Review
(cont)
Cash flow generation
AUD million1
Operating cash flows and lease payments2
Tax payments and receipts
ATO settlement (including interest and penalties)
Cash flow from operating activities and lease payments
Investing cash flows3
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 year4
Bank loans
Net (debt)/cash
2022
54.7
(25.4)
(22.3)
7.0
(221.4)
17.0
–
(27.6)
(2.3)
(6.0)
257.1
0.1
23.9
(85.0)
(61.1)
2021
Change $
34.2
(9.8)
–
24.4
70.6
65.0
50.0
(9.7)
(5.0)
(3.3)
65.1
0.0
20.6
(15.6)
(22.3)
(17.3)
(292.0)
(48.0)
(50.0)
(18.0)
2.7
(2.7)
192.0
0.1
257.1
(233.2)
(68.0)
189.1
(17.0)
(250.2)
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. 2021 includes proceeds from the disposal of OML and Luxury Escapes investments. Excluding amounts transferred (to)/from short-term deposits.
4. Excludes amounts held in short-term deposit with banking institutions.
HT&E Annual Report 2022 15
Investing cashflows include $239.1 million
for the acquisition of ARN Regional,
offset by proceeds received on disposal
of 4KQ and the Group’s remaining
investment in Lux Group totalling
$20.8 million.
The accretive share buy-back was
maintained through the second
half delivering improved returns for
shareholders.
In consideration of the trading result
for the period and current economic
environment, the Company declared
a dividend of 5.2 cents per share. This
dividend is paid from parent entity
profits since 1 January 2023.
Cash and capital management
The balance sheet of the Group is in a
very strong position, with net debt of
$61.1m and leverage on a pro forma pre
AASB-16 basis 0.8 times EBITDA.
Cash proceeds from the disposal of
HT&E’s investment in Soprano5 expected
to be received in the first half of 2023 will
be used to pay down debt, effectively
eliminating existing debt under the
current financing facilities, providing
significant flexibility for HT&E to pursue
future growth opportunities as they arise.
The Group retains debt facilities with
undrawn limits of $141.6 million, most
of which expire in 2026.
Impacting operating cashflows in
the period include payments to the
ATO of $22.3 million and transaction
and integration costs associated with
the acquisition of ARN Regional of
$8.7 million. The tax payments made
were part of finalising settlements of two
long running taxation disputes with the
Australian Tax Office, announced in 2021.
Will & Woody – KIIS Network Drive
5. The sale is conditional upon
receiving FIRB approval.
16
Review of operations
2022 has been a year characterised by
growth at ARN and we extended our
lead as Australia’s best performing audio
business across a range of key metrics.
In a highly competitive market, ARN
finished 2022 as the #1 metropolitan
network for people 10+, the #1 network
for people 25–54, and with our highest
ever 25–54 audience share and largest
cumulative audience, while the iHeart
Podcast Network Australia maintained
its position as the #1 Publisher.
Even MORE Connections
that count
In 2022, we expanded our content slate
and touchpoints across all audio formats,
integrating 46 regional radio stations
acquired from Grant Broadcasters
(ARN Regional) and rolling out the iHeart
digital audio platform to regional areas.
We invested in the creation of original
podcast content, digital music formats
and a new multi-platform youth brand,
CADA, which has helped deliver valuable
new audiences to the network.
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. We do this by delivering
on our three pillars for growth.
1. The Infinite Dial, Edison Research, 2022, p12+.
2. Triton digital/Digital – Adobe, Google
Analytics, December 2022.
3. Gfk Radio Ratings, S8, SMBAP, Comm
Radio Gps (AM/FM/DAB+), Mon–Sun
5:30am–12:00mn, Share % P10+ and P 25–54.
Three pillars for growth
Real People
Creating meaningful relationships
and environments for shared and
trusted brand experiences.
Real Influence
ARN’s unique deep connections
drive an unmatched halo
of influence.
Real Results
Boosting ROI within an
audiosphere of real human
connections at every touchpoint.
#1 radio stations across
key markets: FM Syd, FM
Melb, FM Adl, national
DAB+ station
#1
Radio streaming app1
#1
Podcast publisher2
#1
Radio network share3
p10+ and p25–54
H222 digital audio revenue
(vs H122)
+28%
Content
Live and local
content delivered by
Australia’s best talent,
and supported by
brands that people
know and trust.
Distribution
Distributed across
our comprehensive
network of broadcast
radio stations and
on iHeartRadio,
Australia’s most
established digital
audio platform.
Double digit audience growth
across radio, podcast, streaming1
Innovation
Commercialised
through a suite of
innovative, data and
technology led products
and partnerships.
Continued momentum in
digital audio revenue growth
HT&E Annual Report 2022 1717
Leaders in local:
We have fiercely protected the
localised nature of the individual
regional station brands and the
connections to the communities they
serve, while providing our teams with
additional tools, opening up access to
centralised resources such as people
and culture, research and marketing to
improve on the ground operations.
We are unique in Australia as we strongly
believe in the power of local voices and
have maintained local programming,
with a particular focus on key dayparts;
breakfast and drive. We broadcast 2261
live and local shows across the network
and where syndicated programming
makes sense, we adapt it to introduce
local voices, ensuring the connection
to the community is never broken.
Delivering on the acquisition
business case:
Through providing our clients with the
ability to access more than a third of
Australian consumers, we identified the
potential for material revenue synergies
for ARN of up to $20 million per annum
within three years of completing the
acquisition of ARN Regional.
We set an ambitious revenue synergy
target of between $6–8 million in 2022
and despite the significant focus required
on the integration program were able to
secure approximately $7 million of new
revenues into the business.
With the Commercial structure now set,
training programs in place and first phase
IT integration complete, we are confident
we can deliver further synergies in 2023
to meet the acquisition business case.
Bigger, Better Together
On 4th January 2022, ARN
completed the acquisition of ARN
Regional from Grant Broadcasters,
growing the network to over
8 million listeners across 135 stations
in every state and territory in the
country. Grant Broadcasters is
Australia’s oldest, family owned and
successful regional radio business
and it was critical that the integration
of ARN Regional into the core
business maintained the elements
that made it such a success.
People first:
Crucial to the ongoing success of the
business has been a ‘people first’
integration effort. To ensure the success
of combining the two businesses in
February, we brought together over
120 leaders from across the business,
for the purpose of creating a shared
vision and generating strong working
relationships. This exercise was
replicated with a core group of leaders
in September, as a way of health
checking our progress and establishing
the foundations for continued
integration efforts.
The program of work was substantial
and we remain on-track to conclude the
major components by the end of 2023.
The integration consisted of numerous
individual workstreams encompassing
organisational structures, processes
and systems. The timeline below
illustrates the key milestones achieved
in 2022 and remaining for 2023.
Our Integration Timeline
Acquisition
completed
Agency upfront
presentations
Disposal of 4KQ
for $12m
Hot Tomato
(Gold Coast)
integration into
metro structure
Merger of metro
and regional
revenue & inventory
systems
Single accounting
system go-live
Sep 2022
May 2023
Oct 2023
Aug 2022
Apr 2023
Jul 2023
Enabling teams and
systems integrated
Integration of TRSN
into ARN Agency
Sales team
Selling@ARN
Capability@ARN
iHR regional
digital expansion
ARN syndicated
shows launched
1. Total show count is based on live and local shows across all ARN owned stations across Metro & Regional.
Mar 2022Jul 2022Feb 2022Jan 2022Jun 2022 18
HT&E Annual Report 2022
Review of operations
(cont)
ARN continues to have
the #1 metropolitan
radio network share in
Australia, with reach of
over 6 million people
a week. Consistency
remains a key part of
our ratings success,
culminating with
our strongest ever
metropolitan ratings
performance in the
final survey of 2022.
In Sydney, ARN has maintained its
Breakfast duopoly leadership with KIIS
1065’s Kyle & Jackie O and WSFM’s
Jonesy & Amanda finishing in the #1FM
and #2FM spots respectively, and in
Adelaide, Mix102.3 remains the #1FM
Station and Cruise1323 the #1 Commercial
AM Station.1
In the less regularly surveyed but equally
important regional markets, ARN drove
impressive results. In the largest non-
capital market of the Gold Coast, ARN’s
Hot Tomato increased cume YoY and
remained a strong overall #1. Of the eight
of ARN’s other major regional markets
surveyed in 2022, ARN increased cume
in five and held #1 rankings in Cairns,
Mackay & Gympie. Cume also increased
strongly in Wollongong and Hobart from
prior surveys.2
Growing our connections
through content
Growth from the core
ARN continues to be #1 metropolitan
radio network in Australia reaching over
6 million people a week. Consistency
remains a key part of our ratings success,
culminating with our strongest ever
metropolitan ratings performance in the
final survey of 2022.
In a highly competitive market, ARN
finished 2022 as the #1 metropolitan
network for people 10+, the #1 network
for people 25–54, and with our highest
ever 25–54 audience share and largest
cumulative audience. Across our
metropolitan network, overall listeners
increased by close to 12.7% year on year.
ARN continues to lead key metropolitan
markets with #1FM stations in Sydney,
Melbourne and Adelaide. In Melbourne,
GOLD104.3 is #1FM in all dayparts for
the 24th consecutive survey, led by The
Christian O’Connell Show.
1919
Expanding our most
powerful shows
The acquisition of ARN Regional has
allowed us to expand the distribution of
some of our most successful radio shows.
In February, we replaced all previously
licensed content across the regional
network with ARN original content.
This saw us grow distribution and
audiences for key properties and in turn
deliver greater value for our national
commercial partners.
Elevating our news offering
News is a key element in radio
programming and in September,
recognising the importance of local news
stories to the communities we serve,
changes were made to how we create
and deliver news across the network.
These changes better reflect who we are,
strengthen our news service delivery,
and enhance the quality of the content
we produce.
The benefits of the changes made have
been extensive, and include:
• A Local News First approach for regional
markets, with local news leading every
bulletin between 6am – 9am workdays.
This ensures we free-up our journalists
to highlight key issues impacting
local audiences and make intimate
connections with listeners.
• Creating a consistent approach to
news gathering across the network
and maximising the productivity
of ARN’s news force to generate
bespoke content for digital first
distribution, as audience behaviours
shift to on-demand listening.
The News Review lays the foundation
for our Future of News strategy to
elevate news content and position
ARN as the industry leader in short and
longform audio news across broadcast
and digital platforms.
Will & Woody – more than quadrupling their audience footprint
across Australia
2021
# of stations
2022
# of stations
5
24
Total Audience Reach Number3
1,623,700
+40% Growth (465,700)
Kyle & Jackie O – record breaking cume, reaching more listeners than any
other show in the country
2021
# of stations
2022
# of stations
5
41
Total Audience Reach Number3
1,362,500
+34%
Growth (348,500)
Jonesy & Amanda – substantial audience growth off a very strong base
2021
# of stations
2022
# of stations
4
27
Total Audience Reach Number3
805,100
+15% Growth (103,100)
Christian O’Connell – extending the lead in Australia’s biggest radio market
2021
# of stations
2022
# of stations
5
35
Total Audience Reach Number3
925,100
+29% Growth (208,100)
1. GfK CY2022 Metro Radio, People 10+, Mon–Sun 0530–12mn #1 based on share, increase based on cumulative reach unless otherwise stated ratings, Xtra
Insights regional most recent surveys | GfK, S8 2022, SMBAP, p10+, p25–54, 0530–2359, Share/Cume | Xtra Insights, most recent Surveys 10+.
2. GFK Gold Coast surveys 1–3 2021 vs surveys 1–3 2022, 10+ Share/Cume, Mon–Sun 530am–12mn | Xtra Insights most recent surveys, 10+ Station Listened to
Most, Cume, Mon–Sun 12mn–12mn.
3. GFK Metro Survey 8 2021 vs Survey 8 2022, 10+ All People Cume, Kyle & Jackie O Syd Mon–Fri 5.30am–9am & 6pm–7pm, SMBAP Mon–Fri 6pm–7pm, Will &
Woody SMBAP Mon–Fri 4pm–6pm, Jonesy & Amanda SMA Mon–Fri 5:30am-9am & 6pm–7pm, Christian O’Connell SMBAP Mon–Fri 5:30am-9am & 7pm–8pm
| Xtra Insights All People 10+ Cume (markets selected specific to show, most recent surveys), Kyle & Jackie O Nights Mon–Fri 7pm–12mn, Will & Woody Drive
Mon–Fri 4pm–7pm, Jonesy & Amanda Nights Mon–Fri 7pm–12mn, Christian O’Connell, Nights Mon–Fri 7pm–12mn.
20
HT&E Annual Report 2022
Review of operations
(cont)
Building the next generation of
content creators and audiences
Launch of CADA
We launched CADA on 31st March
2022, with the vision to create a national
multi-platform youth media brand,
delivered by talent representative of the
diversity of young Australia today.
Targeting Australia’s underserviced
youth audience (aged 18–29), CADA
is consumed in Sydney on the 96.1FM
frequency and around Australia on
iHeartRadio, DAB and across podcast,
social and digital.
Our focus this year has been on building
brand awareness, refining the content
offering and growing the cross-platform
audience. We have been pleased with the
support from our key commercial partners,
with CADA delivering major integrated
campaigns for marquee clients including
Bonds, Netflix and Collarts. Bonds
“Big Icon Energy” campaign saw Flex &
Froomes record their show in front of a
live studio audience with 170 attendees,
prize winners and influencers.
We have seen more success with the
Flex & Froomes podcast reaching 1
million downloads in six months and
becoming ARN’s 4th biggest catch-up
podcast within three months of launch.
CADA also presented some of the
biggest tours in Australia across the year
– including Kendrick Lamar, The Grass
Is Greener Festival, Central Cee and
Tyga, and launched CADA:Live as part
of BIGSOUND in Brisbane in September,
allowing hundreds of audience members
to experience CADA in real life.
Podcast listening continues to grow
Australians’ insatiable appetite to consume
more audio showed no signs of slowing
in 2022, with the percentage of the
population now regularly listening to
podcasts overtaking that of the US across
the year.
Consumers have an infinite number of
podcasts at their disposal, and therefore
the way we think about investing in a
particular genre or creator of content
across both our owned and represented
podcast portfolio is incredibly important.
We will consider investment where the
content and audience align with our
radio brands, or where we perceive there
to be a commercially attractive under
serviced audience.
At this point in time, we do not believe
the commercial opportunity attached to
long-form, investigative style podcast
content, justifies the investment for
our business.
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
securing our best ever results with
24 winners across 21 categories, and
Kyle and Jackie O being inducted into
the Commercial Radio Hall of Fame.
Looking to the future
Our focus for 2023 continues to be
delivering improved returns for HT&E
shareholders and we have a strong
platform for future commercial growth this
year following our best outright ratings
performance in 2022.
We are strongly placed to deliver on
our strategic intent 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 through;
1. Creating 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.
HT&E is confident that it will deliver on its
integration objectives, including second
year revenue synergy targets.
Launched under three years ago, the
iHeart Podcast Network Australia has
grown at scale and maintained its position
as the #1 Publisher on the Australian
Podcast Ranker for 32 consecutive
months. Every month, we now reach
a further 4.7 million listeners via the
podcast network.
In 2022, we launched several new radio
programs with established podcast
creators, including ‘Life Uncut’, ‘She’s On
The Money’ and ‘Collective Noun’, as part
of our ‘Podcast to Broadcast strategy’,
aiming to bring new younger audiences
into radio and create a path for uncovering
the next generation of radio talent.
In 2023 we will continue to invest in both
our owned and represented podcast
portfolio, ad tech and simplify our
product offering for advertisers.
Roadmap to building a
constructive workplace culture
Investment in our people is part of our
DNA and during the year we further
embedded our “Culture in Action”
employee behaviours framework. Just
18 months into a multi-year program
focused on creating a constructive
workplace culture, we remeasured our
culture using the Human Synergistics
Organisational Culture Index, with
pleasing progress made.
We prioritised investment in a structured
Environment Social and Governance
(ESG) program, named ‘InTune @ARN’,
focusing on our Team, Communities,
Planet and Governance. We aim 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 achieving strong performance
in two key industry measures, being
the bi-annual Media-i Industry Survey
(Media-i) and the annual Australian
Commercial Radio Awards (ACRAs).
2121
Emotive
Emotive, an independent creative agency
in which HT&E holds a 51% stake, had
its most successful year to date, further
expanding its client base, improving
revenues and earnings.
As a full-service creative agency,
Emotive is uniquely structured to respond
to its clients’ business needs, offering
strategy, creative and design, production,
creative amplification and brand
experience services.
Emotive entered the next exciting phase
of its growth in 2022, further expanding
the team and securing new premises by
the beach in Coogee.
Emotive works with an enviable roster of
local and international clients, including;
Optus, Audible, Google, Breville,
Danone, Pernod Ricard, ARN, Revlon,
Unilever and The NRL.
1. Adjusted for the loss of HK Tramways contract
from May 2022.
This transaction delivers HT&E
shareholders a meaningful return on
investment and provides further balance
sheet strength and financial flexibility
for HT&E to continue to invest in its core
media assets.
The sale is conditional upon receiving
FIRB approval and is expected to be
completed in the first half of 2023.
Cody Outdoor
With materially improved local market
conditions and strong management
of our network of tunnel advertising
contracts, Cody Outdoor revenue and
earnings before interest, tax,depreciation
and amortisation (EBITDA) before
significant items increased 9% and
31% respectively, and the business
returned to cashflow profitability.1
The reopening of international borders
and removal of quarantine requirements
expected in the first half of 2023 will
further assist the business.
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.
Recruiting and retaining the best people
will continue to be our focus and we
are confident that our investment in a
structured ESG program, ‘InTune @ARN’
will have a positive impact. We aim 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.
Having concentrated on growth from
the core, as we head into an uncertain
economic period we believe we have the
right formula to capitalise on the strengths
of radio, while meeting the demand
created by Australians’ insatiable appetite
to consume more audio via digital formats.
Investments
Soprano
In early January 2023, we announced the
signing of a binding share sale agreement
to dispose of our long held 25% interest
in Soprano Design Limited (Soprano)
to Potentia Capital (Potentia), a leading
Australian based technology focused
private equity firm for $66.3 million in cash
consideration.
After an extensive outreach process with
various interested parties, the Potentia
proposal was considered to be the
most attractive for HT&E shareholders.
Global CPaaS and technology markets
have been challenged over the past
12 months and HT&E views this
transaction to be a positive outcome
in today’s market, with an all-cash deal
enabling the company to focus on
its position as a leading provider
of audio services in Australia.
Robin, Terry & Kip – KIIS 97.3 Brisbane
22
2022 Awards
In 2022 our people lived our values of
“aim high” and “own it” with a number of
sought-after achievements recognised across
Radio, Podcasting and beyond. We celebrated
the following award wins across the business.
Australian Commercial Radio
Awards (ACRAs)
In its 33rd year, the ACRAs are a
celebration of the wealth of talent that
drives the Australian commercial radio
industry. Winners are awarded across
39 categories and cover all areas of
radio broadcasting.
In 2022, we reinforced our position
as Australia’s leading audio company,
taking home an astounding 25 awards,
the best year for ARN on record.
The standout achievement of the
night was the induction of KIIS 1065’s
Kyle & Jackie O into the Commercial
Radio Hall of Fame, a true reflection
of the calibre and excellence
ARN maintains.
Categories won by ARN
• Hall of Fame Inductees –
Kyle & Jackie O, KIIS Network
• Best On-Air Team (Metro) –
Kyle & Jackie O, KIIS 106.5 Sydney
• Best On-Air Team (Country
& Provincial) – Brooke & Bob,
Magic 93.1 Berri
• Best Talk Presenter (Provincial) –
Katie Woolf, Mix 104.9/Hot 100 Darwin
• Best Networked Program (Metro)
– Kyle & Jackie O Hour of Power,
KIIS Network
• Best Networked Program (Provincial) –
Tasmania Talks with Mike O’Loughlin,
ARN
• Best Current Affairs Presenter
(Non-Metropolitan) – Katie Woolf,
Mix 104.9/Hot 100 Darwin
• Best Entertainment Presenter
(Country) – Dana Hamilton,
Power 98.1 Muswellbrook
• Best Entertainment Presenter (Metro) –
Kyle Sandilands, KIIS 106.5 Sydney
• Best Music Presenter (Metro) –
Mitch Churi, KIIS Network
Ciaran Davis, Jackie O, Kyle Sandilands, Duncan Campbell – 2022 ACRAs
• Best Station Produced Comedy
Segment (Country) – Tracksuit Boys
‘Everybody’, Power FM Bega Bay
• Best Station Produced Comedy
Segment (Metro) – Barb Scams the
Summer, KIIS Network
• Brian White Award for Journalism
(Non-Metro) – Katie Woolf,
Mix 104.9 Darwin
• Best Radio Show Podcast (Metro) –
Jonesy & Amanda’s Time Travellers
Podcast, WSFM Sydney
• Best Sport Event Coverage
(Non-Metro) – Raiders On Mix –
Raiders v Titans Comeback Match,
Mix 106.3, Canberra, ARN/Southern
Cross Austereo
• Best Music Special (Provincial) –
30th Anniversary of Nevermind,
Power 100 Townsville
• Best Multimedia Execution – Station
(Metro) – Kyle & Jackie O’s Get
Vaxxed Baby! KIIS 106.5 Sydney
• Best Station Promotion (Metro) –
Kyle and Jackie O’s Set You Up For
Life, The Kyle & Jackie O Breakfast
Show, KIIS 1065 Sydney
• Best Show Producer – Talk/Current
Affairs (Non-Metro) – Rhea Gillie,
LAFM Launceston
• Best Program Director (Metro) –
Mike Byrne, WSFM Sydney
• Best Music Director (Metro) –
Brad McNicol, KIIS 106.5 Sydney
• Engineering Excellence – ARN’s
VPlayer, Bryan Amos, ARN
• Best Direct Salesperson (Non-Metro)
– Caroline Lowe, Magic 899 & 5CC,
Port Lincoln SA
• Best Station Sales Achievement
(Non-Metro) – Gold FM98.3 & AM1071
Sales Team, Bendigo VIC
• Best Newcomer Off-Air (Provincial) –
Scott Gilchrist; Hot 104.7 & Mix
106.3, Canberra ARN/Southern
Cross Austereo
HT&E Annual Report 2022 Media i Awards
The Media i Awards provide recognition
in sales excellence for teams and
individuals across all media channels.
The awards are the culmination of over
2,000 media agency peers voting for
the individuals and teams they believe
achieved excellence in the discipline
and are the only awards program of its
kind in Australia.
Australian Podcast Awards
Recognising the Australian podcast
industry’s 2022 achievements, These
Awards celebrate amazing content,
campaigns and talent – both on the
mic and behind the scenes. Chosen
by a panel of over 60 independent
international and Australian judges
working in the sector, ARN were
recognised across 7 categories in 2022.
Categories won by ARN
• QLD Sales Team of the Year –
ARN Agency Team
• QLD Radio Sales Representative
of the Year – Liam Armstrong
• VIC Radio Sales Representative
of the Year – Tess McLeod
• NSW Radio Sales Representative
of the Year – Tom Bonnell
Radio Today Podcast Awards
Radio Today’s Annual Podcast Awards,
recognise the most innovative podcasts
in Australia and the people driving
success behind the scenes. ARN was
extremely pleased that Kyle & Jackie O
took out the Radio Show Podcast of the
Year for the second year running, with
a total of 3 out of 16 category wins.
Categories won by ARN
• Radio Show Podcast of The Year –
Kyle & Jackie O
• Podcast Executive Leader of
The Year – Corey Layton
• Podcast Publisher of The Year (Indie) –
Victoria Devine, She’s On The Money
LearnX Summit and Awards The
LearnX Awards are an international
and professional awards program that
recognises multiple fields of learning
and talent development. In 2022, ARN
was recognised for two of their learning
programs that were developed entirely in
house by our People & Capability team.
Categories won by ARN
• Leadership Training – Gold Winner,
ARN People & Culture
• Sales Training – Gold Winner,
ARN People & Culture
Categories won by ARN
Gold Winners
• Listeners Choice – Life Uncut
• Best Creative Campaign – She’s
On The Money & Budget Direct,
Victoria Devine
Silver Winners
• Spotlight Award – Life Uncut
• Best Sex & Relationship Podcast –
Hooked, Hitched & Hung Up
• Best Creative Campaign –
Queens of the Drone Age
Bronze Winners
• Best New Podcast – Flex & Froomes
• Rising Star – Indianna Symons
• Best Podcast Sales House – ARN
B&T Women in Media Awards
B&T’s Women in Media Awards
recognises those exceptional women
who have achieved success in their
professional arenas and celebrates their
invaluable contribution through their
leadership, innovation and courage
to their industry. In 2022, our Chief
Strategy & Connections Officer, Lauren
Joyce was awarded Marketer of the Year.
Radio Today 30 under
30 Awards
Radio Today’s 30 under 30 Awards
unearth Australia’s youngest and
brightest minds in radio, audio and
podcasting. In 2022, year ARN secured
one third of the awards with 10 rising
stars recognised for their excellence in
the industry.
Awards won by ARN
• Jake Powell – CADA
• Brooke Humble – Magic 93.1
• Brooke Taylor – CADA
• Juan Estapa – ARN
• Michael Gallo – ARN
• Liam Armstrong – ARN
• Kate Valance – KIIS
• Lachlan Perry – 2ST/949 Power
• Tom Bonnell – ARN
• Ben McDowell – KIIS
23
Agency Sales Team
Individual Awards
Across the Advertising Industry in
Australia, some of the major Ad Agencies
acknowledge their media partners
with awards to recognise excellence in
innovation or partnership throughout
the year.
Awards won by ARN
• Carat Sales Rep, Q1 – Adelaide
• Mindshare Rep of the Month –
March – Melbourne
• Initiative Sales Person of the Month –
July – Melbourne
• Initiative Sales Person of the Month –
Sept – Melbourne
• Initiative Sales Person of the Year 2022
– Melbourne
• Initiative Media of the Year 2022 –
Melbourne
• Starcom Rep of the Quarter, Q3 –
Sydney
• Media Partners Rep of the Year – Metro
• Media Partners Rep of the Year –
Regional
Ipswich Chamber of Commerce
Business Excellence Awards
Celebrating the bold work that propels
their business community forward,
inspiring a competitive marketplace and
fostering meaningful connections within
and across business and industry sectors.
• The President’s Award – River 949
Mediaweek Power List
In its second year, Mediaweek released
its annual Power 100 list. The list
recognises the media executives who
control the content across the Media
industry in Australia.
Mediaweek 100 Power List
• Ciaran Davis
• Peter Whitehead
• Duncan Campbell
• Corey Layton
Mediaweek Star Power 25 List
• Kyle & Jackie O
• Christian O’Connell
• Laura Byrne and Brittany Hockley
• Amanda Keller and Brendan Jones
• Will and Woody
24
Environmental, Social & Governance: InTune @ARN
Positively Impacting
Our People and Planet
We are contributing to
the achievement of local
and global Environmental,
Social and Governance
(ESG) goals by making
sustainable, measurable,
continuous improvements
across our businesses with
a focus on ARN.
To do this, we have
developed an ESG strategy,
translated into practical
actions to make a positive
and tangible impact to
people and the planet.
We call this program of
work “InTune @ARN”.
Our InTune efforts are
focused in four areas:
Our Communities
By supporting our audiences
and communities.
Our Team
By building the most constructive
workplace culture possible.
Our Planet
By measuring and mitigating our
environmental footprint.
Best Practice
By ensuring robust and transparent
governance structures, reporting
and controls.
We call ESG “InTune @ARN”.
Flex & Froomes – CADA
HT&E Annual Report 2022 25
InTune with
Our Communities
Building quality connections with
our communities (audiences, clients,
partners), by understanding what’s
important to them and giving back
in big and small ways.
InTune with
Our Team
Our people are the reason for our
success. We believe diverse teams
who collaborate constructively find
even more ways to grow, innovate,
achieve and do their life’s best work.
The InTune
@ARN
Framework
Key programs of work
undertaken in 2022
IPG Mediabrands’ Media
Responsibility Index
OMG’s Sustainability and
DE&I Partner Survey
Read more on
page 26
InTune with
Our Planet
We are heard in suburbs,
cities and regions near and
far, so we strive to protect and
regenerate those communities
today to sustain tomorrow.
Key programs of work
undertaken in 2022
Decarbonisation strategy, plus scope
1&2 carbon auditing
Founding membership of ‘Green Ears’
audio industry sustainability program
Read more on
page 32
Key programs of work
undertaken in 2022
Award-winning capability
programs, including:
Leadership@ARN and
Selling@ARN
Establishing an
evidence-based Diversity
and Inclusion Strategy
Group-wide culture survey
re-test with statistically
significant improvements
Read more on
page 30
InTune with
Best Practice
Ethical, transparent and
accountable governance
structures and controls
are the foundation of
our success.
Key programs of work
undertaken in 2022
ISS ESG’s Corporate Ratings
Consolidated and redrafted
the HT&E Code of Conduct
Read more on
page 34
26
Environmental, Social & Governance: InTune @ARN
InTune with
Our Communities
As a media
broadcaster, ARN is
in a unique position
to support social
issues important
to vast and diverse
groups of people
from our audiences,
to customers,
communities,
shareholders,
partners and
team members.
Community Service
Announcements
In 2022, we supported 254 different
community service organisations by
supplying airtime and digital inventory
to promote causes including Movember,
Starlight Children’s Foundation, Clean
Up Australia, Bravehearts, The Salvation
Army, Polished Man and R U OK? Day.
In this arena, we delivered over 1.4m
impressions and 211,395 radio spots
which equates to over $18.7m in
value. We also supported some of
these charities with airtime vouchers
to the value of $396k to auction off at
fundraising events throughout the year.
Impressions
1.4m
Radio spots
211k
+441% YoY
Value
$18.7m
+153% YoY
Airtime auction vouchers
$396k
Mel & Chris Dzelde with Ali Clarke, Mix 102.3 Adelaide
HT&E Annual Report 2022 27
Damien Leith, WAVE FM Illawarra
On Air Activities
With loyal and engaged listeners, our
talent consistently use their platforms
for good, bringing awareness to those
whose stories need to be heard. From
Christian O’Connell raising the money
to give a car to a loyal listener with a
disability so she could take her kids
to school, to Paul ‘Galey’ Gale raising
money for Gold Coast families with
“Galey to the rescue”, the end goal is
always the same – giving people a voice,
raising money for charities or groups
in need whilst, bringing our audience
something heartfelt and meaningful –
with community at the forefront.
Kyle & Jackie O’s Givebacks
“Givebacks” are one of our most popular
content segments as Kyle & Jackie O
get to use their radio powers for good,
in 2022 they helped raise and giveaway
over $250,000 to those in need. Kyle &
Jackie O ran several giveback segments
in 2022, one of the most heart-warming
being for the family of Jaclyn Michelle
who tragically died after being struck
by a train, leaving behind six children.
Our listeners and clients overwhelmingly
dug deep, raising close to $100,000 for
Jaclyn’s family.
Christian O’Connell’s
Hamper Claus
Throughout November, Christian ran an
on-air fundraiser, the goal was to raise
$32,500 to provide 500 hampers for
the Charity Mum’s Supporting Families
in need and ended up raising close
to $80,000!
Bravehearts Day
In its 26th year, Bravehearts Day is
Australia’s largest and longest-running
campaign, dedicated to preventing
child sexual abuse. We supported this
initiative with social posts/stories and on
air messaging across 43 regional stations,
delivering over $460,000 in value.
Camp Quality
For over 10 years, the teams at Mix 104.9
and Hot 100 in Darwin have been running
this charity day in partnership with Camp
Quality. This year we ran an all-day
radio auction, clothing collections, an
outside broadcast and of course putting
our listeners on the air and playing
requests for donations all day long.
In 2022 a massive $35,000 was raised
for NT families.
R U OK? Day
The KIIS Network once again went
silent for 10 seconds every hour and
encouraged listeners to use that silence
to ask each other ‘R U OK?’ Our team
at Townsville’s Power 100 received a
call from a listener to thank announcers
Archie, Bretz, Karina and Wildy who
in his words said, “you guys saved my
life”. After having had a major setback
in his life, it was Power 100 that got him
through. Reinforcing the meaningful way
that our teams connect with our listeners.
Mix 102.3’s Spirit of Christmas
Mix 102.3 along with Power FM in South
Australia told the story of Mel Dzelde
who has been diagnosed with stage
4 rectal cancer and late last year was
diagnosed with MND. As the sole carer
for Mel, her husband Chris could no
longer work. In an Adelaide first, the two
stations combined forces simulcasting
their breakfast shows, with the aim
to raise $50,000 to help clear Mel &
Chris’s debts, and any additional money
going to Mary Potter Hospice. Joined
by icons such as Kate Ceberano, Hans
the German and Erin Phillips – as well as
special guest Oprah Winfrey (who also
contributed $15,000) they raised a total
of $75,000 for Mel and her family.
Koinz 4 Kids
Throughout the month of July, SeaFM
Devonport, Burnie, 7AD and 7BU raised
money via Koinz for Kids for The Cancer
Council Tasmania, helping children
who are impacted by Cancer on the
Northwest Coast. With the help of
businesses, schools, and the community,
they were able to raise over $36,000.
Hoodies for the Homeless
Over the course of four weeks, WAVE
FM in the Illawarra collected and
donated an overwhelming 12,000 items
to St Vincent De Paul through their
“Hoodies for the Homeless” campaign.
The donations were distributed out to
anyone experiencing homelessness
within the Illawarra and South Coast area
so that they could stay warm during the
winter months.
All in for Aspen
Sunshine Coast’s Hot91 urged listeners
to roll up their sleeves (or get their
speedos on) in support of two-year-old
Aspen, who had been diagnosed with
leukemia. Sam & Ash in Breakfast asked
listeners to pledge blood instead of
money with the goal of 1000 litres of
blood pledges. In turn they would swim
100km in a day at Cotton Tree Pool.
On the event day 850km in total were
swum across 12 hours and 100 blood
donations registered.
Will & Woody’s “Most Distant
Shave” for Movember
In support of Movember, KIIS Drive hosts
Will & Woody attempted the World
Record for the most ‘distant’ shave.
They used their platform to start the
conversation about men’s mental health,
attempting to shave Will’s mo from
a 20 metre drop off a building.
28
Environmental, Social & Governance: InTune @ARN
InTune with
Our Communities (cont)
Disaster Reporting
The power of radio is undisputed during
times of crisis. When people want to feel
a sense of community, connection and
hope, audio plays a vital role regardless
of whether audiences access content
via broadcast, on-demand audio or
social media.
The resilience of broadcast radio
is unparalleled particularly during
times of natural disaster. As phone
and wifi networks faulter, radio waves
become the most reliable format for
communication and are crucial for
disseminating life saving information to
the affected communities.
Our networks came together in a major
way with the flood coverage during
February and March 2022 where so many
communities were affected. Robin Bailey
from KIIS 97.3 in Brisbane broadcast
live from her balcony while the Brisbane
River lapped at her front door, the local
stations in affected areas such as Ipswich,
Gympie, Sunshine Coast, Brisbane and
Wollongong worked double-time as they
increased their news, weather and live
bulletins, as well as social updates.
One example of this was in Ipswich where
River 94.9 covered the emergency in their
area like no other station could. They
provided the community with updates as
they happened and with how to access
assistance. They had a direct line to
evacuation centres as a way of updating
listeners as soon as their doors opened
with information direct from SEQ water,
councillors and mayors across the region,
as it became available.
On the first day of the floods they put
between 150–200 callers to air, the
priority was getting information to their
listeners that could help the community.
Some of the stories the station heard that
day were remarkable, from people stuck
on the roofs of their house to narrowly
escaping cars on the major highway.
The live updates were critical for helping
the community to navigate the changing
weather conditions in real time.
Radio is incredibly agile and all relevant
shows across our network pivoted
their normal programming to provide
our listeners with the most accurate
updates from government agencies and
emergency services, as well as satisfying
our audience’s desire for light-hearted
escapism and sharing stories of hope.
Volunteering and Donating
At ARN every staff member has been
allocated one day a year of paid leave
to use to support their charity of choice
by volunteering. A number of staff took
up this offer in 2022, in addition to
organised activities, supporting charities
and allowing staff to ‘be their best
selves’. With COVID restrictions easing
in 2022, we saw a 500% increase in the
amount of Charity Days that staff took.
Supporting Charities
ARN supports various charities through
donations and organised events across
the year, coordinated by our local
“ARNSocial” teams. This serves to
raise money but also awareness of the
causes. Some examples of this activity
in 2022 include:
• Biggest Morning Tea for
Cancer Council
• AusMusic T-Shirt Day
• Remembrance Day
• Movember
• Mater Chicks in Pink
• Lifeline
• Perrin Institute for Research
Ipswich Floods, February 2022
HT&E Annual Report 2022 29
Partnerships
In 2022 ARN invested in programmes
to support select charities aligned to
our key values. A long-time partner is
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 immerse themselves in a range of
charities and contribute their time and
expertise through a series of events
across the year.
In 2022 we
• Engaged over 100 participants in
38 events across all metro markets
• Sponsored five activations across
4 x golf days and 2 x soccer
tournaments helping to raise
$305,000
• Raised $7,000 for Support Act at
the Ricochet Ball
• Partnered with UnLtd as a Gold
Sponsor to the value of $250,000
value in media airtime
• Played a critical role in raising
$284,000 across their cricket,
Three Peaks (hiking) and golf events
• Contributed to over $565,000 being
raised for BackTrack at the Unltd
Big Dream Ball
As part of the UnLtd Partnership ARN
specifically supports Musicians Making
A Difference (MMAD), an Australian
charity that transforms young lives
through music. In 2022, we supported
MMAD day nationally to help deliver
the organisation their most successful
to date.
Our support included a campaign
valued at $200,000 that spanned
consumer and trade audiences.
As a result of the campaign MMAD
experienced 18,000 interactions on the
‘Get Help’ website page on MMAD Day
alone and a total campaign reach of
almost 20 million people worldwide.
Salvation Army Street Level
Mission – Surry Hills
“My husband & I are both lucky
enough to work at places where
they see value allowing staff to
utilise a “volunteer day” and we
always spend the day working
at The Salvation Army Street
Level Mission in Surry Hills with
our two eldest daughters. Our
day consists of many things
including, cooking lunch for the
homeless, cleaning up, serving
the homeless their lunch or just
chatting with them. Volunteering
has opened up our eyes to a
world we never understood or
even knew existed and it’s given
us the opportunity to meet a
wide range of different people
from different backgrounds and
to see that everybody has a
story. It’s a great eyeopener for
our kids and a fantastic way to
do our little bit to give back and
realise just how lucky we are.
We wouldn’t be able to do this
without the support of ARN.”
Karen Harris,
Strategy Manager
Samaritan’s Purse –
Operation Christmas Child
“We are so lucky at ARN to
get access to one day a year to
give back in any way we like.
I chose to use my day this year
helping Samaritan’s Purse in
Western Sydney – they check
and pack thousands of boxes
of donated presents for kids in
Cambodia, who would otherwise
not get anything for Christmas
at all. The thought of putting a
smile on some little one’s faces
from all the way over here is
heart‑warming and I feel so
blessed to be able to help!“
Tegan Kirkby,
Client Strategy Director
“We are so lucky at ARN
to get access to one day
a year to give back in any
way we like.”
Tegan Kirkby
Client Strategy Director
30
Environmental, Social & Governance: InTune @ARN
(continued)
InTune with
Our Team
Our sustained focus
and investment in
our people reaped
many rewards for
our business and
teams in 2022.
With the acquisition of Grant
Broadcasters early in the year, ARN’s
workforce and operational complexity
increased. In response our people
stepped up and delivered on their
business-as-usual work whilst executing
the full integration of our metro and
regional stations.
18 months later, and at the end of
a year of significant change and
integration work, we retested our
culture, with pleasing progress made.
The interventions to shift the culture had
the desired impact with all constructive
(blue) styles increasing and defensive
(red and green) styles decreasing.
We continued to build on the
foundations set in 2021 and made
progress against our plan of building the
most constructive culture possible. This
is brought to life through our ‘Culture in
Action’ framework – a set of behaviours
hardwired into every day which articulate
what constructive culture looks like.
At the beginning of 2021, we
benchmarked our culture using Human
Synergistics’ Organisational Culture
Index (OCI) which measures the current
culture of an organisation through
shared behavioural norms (behaviours
people believe are required to “fit in”).
Using the same model, we set an
ambition for our ideal future culture.
Investment in People Capability
An essential part of our constructive
culture is investment in people. In 2022
this included succession planning for
existing team members, as well as
recruiting new team members to close
current and future capability gaps. This
was delivered across most functions of
the business but with a primary focus on
Digital & Technology, Finance & Legal
and People & Culture.
Key appointments in 2022 include
• Chief Digital & Technology Officer
• Chief Legal Officer & Company
Secretary
• Head of Organisational Effectiveness
• Director – Commercial Strategy
& Growth
Further Developing and
Embedding Capability
Continuously developing our people’s
knowledge and capability remained a
core focus – and while it is our view the
best learning happens across a multitude
of touchpoints (formal and informal), two
significant and structured programs were
delivered in 2022.
Mix 102.3 & Cruise1323 staff enjoyed a staff gathering, including a smoking ceremony
HT&E Annual Report 2022 31
Establishing an Evidence-Based
Diversity and Inclusion Strategy
We also continued to build on our culture
work by developing a diversity and
inclusion (D&I) strategy which draws on an
evidence-base we access as members of
the Diversity Council of Australia (DCA).
Health, Safety and Wellbeing
In 2021 we renewed our Workplace
Health and Safety Management System
(WHSMS). Now in place for over
12 months, and we have maintained our
industry-low incident record, with zero
serious incidents.
In addition, we participated in the
DCA Member Survey, accessed open
programs and attended the Annual
Diversity Debate. Further, we have
registered to participate in the 2023
DCA national ‘Inclusion at Work
Index’ tracking the state of inclusion in
Australian workplaces. ARN’s ELT has
also made a commitment to developing
their D&I capability by participating
in DCA knowledge programs and
cascading learnings across the business.
Workplace flexibility is brought to
life through the behaviours of our
constructive culture and we encourage
each team member to work with their
leader to agree the best processes
and places for them to deliver their
agreed outcomes.
ARN is also proud to have formalised
our commitment to embedding the
principles and purpose of reconciliation
by registering with Reconciliation
Australia to commence developing a
Stage One “Reflect” Reconciliation
Action Plan for implementation in 2023.
Since the onset of COVID-19, we have
focused on keeping our people, safe,
well and informed by complying with
government requirements including
encouraging vaccination and enabling
people to work flexibly and from home
as/when necessary – and will continue
to do so if/when required.
Our Social Committees coordinate a
range of opportunities for our teams to
connect and celebrate. The ‘feel good
philosophy’ these volunteers creates
many moments of joy for our people
online and face-to-face. With the need
for interpersonal and social connection
at an all-time high, the significance of our
Social Committees’ work has increased
and we continue to support them with
budget and resource allocations to bring
this important and unique part of our
culture to life.
Another support structure in place for
our people’s health, safety and wellbeing
is an Employee Assistance Program
(EAP) providing confidential and free
counselling support for team members
and their immediate family.
Britt, Laura & Mitch – THE PICK UP, KIIS Network
1. Leadership@ARN
Because leaders have the greatest
impact on culture and results, we
continued to develop our leaders’
capabilities to achieve measurable
outcomes including but not limited to:
1. Cascading and delivering
strategic goals
2. Driving success and achieving
ambitious commercial outcomes
3. Increasing engagement,
performance and effectiveness
4. Reducing attrition and attracting
high caliber talent
Our program received a participant
Net Promoter Score of 70, a
reported 20% increase in leadership
confidence and an uplift on all
ROI metrics. Leadership@ARN is also
the winner of a 2022 Gold LearnEx
Award for Leadership Training.
2. Selling@ARN
To capitalise on the opportunities
of 2022, we also turned our focus
to our sales teams, developing a
new learning solution giving every
salesperson increased capability to
connect with customers.
In addition to increased sales revenue,
Selling@ARN achieved in all key
impact areas identified as measures of
success and the highest rating on the
Kirkpatrick Training Evaluation model.
Selling@ARN is also the winner of the
Gold LearnEx Award for Sales Training.
We continued
to build on the
strength of the
foundations set
in 2021 and made
progress against our
plan of building the
most constructive
culture possible.
32
Environmental, Social & Governance: InTune @ARN
InTune with
Our Planet
In 2022 we have
taken significant
steps to understand
our carbon profile
and identify steps
to reduction.
To understand
our emissions and
potential in this
area, we partnered
with a specialist
sustainability advisory,
Edge Environment,
to calculate our
Greenhouse Gas (GHG)
emissions and identify
our impacts and
opportunities.
Immediate Objectives
2022 Project Scope
1. Quantify and understand ARN and
Emotive’s carbon footprint in line
with the Greenhouse Gas Protocol.
2. Improve internal understanding
of carbon outputs and impact,
plus pathways to decarbonisation.
3. Understand our emissions profile
including areas for priority attention.
4. Increase stakeholder
understanding of sustainability.
5. Consider longer-term opportunities
for carbon reductions and
communicating progress.
We measured our carbon emissions
across the reporting period
1 October 2021 – 30 September 2022:
1. Emissions from the use of fuels and
refrigerants (Scope 1)
2. Emissions from the use of electricity
(Scope 2)
* Note: Assets where we have no operational
control over utilities are with Scope 3 and not
included within this assessment.
Results and Emissions Breakdowns
On completion of analysis, data was split into several specific areas of impact
and opportunity.
This chart sets our base benchmark for improvement. As more corporations monitor
their environmental impact and industry comparisons become available, we will
establish targets commensurate to our size and ambitions.
Emissions by Scope
Scope 1
Scope 2
Emissions by Asset Type
Offices
Transmission Sites
Emissions by Office Control
Leased Offices
Owned Offices
Emissions by Vehicles
Owned Vehicles
Carbon
Output
569 tCO2 -e
4,354 tCO2 -e
Carbon
Output
3,008 tCO2 -e
1,915 tCO2 -e
Carbon
Output
2,388 tCO2 -e
663 tCO2 -e
Carbon
Output
240 tCO2 -e
% Total Operational
Emissions
12%
88%
% Total Asset
Emissions
61%
39%
% Total Office
Emissions
78%
22%
% Total Operational
Emissions
5%
HT&E Annual Report 2022 33
Summary
This carbon footprint highlights
opportunities to be addressed in
our next phase of work which may
include: more robust data collection;
mitigation and reduction planning;
target trajectories; opportunities
for stakeholder influencing; internal
knowledge-building; investor
communication packs; and leveraging
opportunities within existing operations
to reduce our carbon footprint.
One such example of reducing our
carbon footprint is the development of
our new Port Lincoln studio. Within this
facility almost all major components of
the broadcast technology were sourced
from other decommissioned studios and
then successfully “upcycled” to create
a new broadcast facility. This included
studio on-air consoles, Broadcast and
IT servers, phone system and computer
hardware – thus providing
the blueprint for a more
sustainable, replicable solution
for a wide range of future
studio builds and re-builds.
In addition to these initiatives,
in 2022 ARN became
founding members of the
audio industry’s inaugural
sustainability committee
‘Green Ears’ which will
work toward the continued
improvement of each
member’s and our industry’s
environmental performance
and impact as a whole with the
goal of establishing a ‘green
audio checklist’.
Almost all major
components of the
broadcast technology
were sourced from other
decommissioned studios
and then successfully
“upcycled” to create a
new broadcast facility.
34
Environmental, Social & Governance: InTune @ARN
InTune with
Best Practice
HT&E’s long-term
success requires
strong governance,
across both corporate
and media areas
of operation.
Corporate Governance
HT&E is an ASX listed company with
an objective of increasing shareholder
value within an appropriate framework
of corporate governance. The
Company has considered the best
practice recommendations established
by the ASX Corporate Governance
Council and complied with those
ASX recommendations.
The documents detailing the
Company’s corporate governance
framework are available at
htande.com.au/corporate-governance/.
Most relevant are the Corporate
Governance Statement and Code
of Conduct.
Charters also exist to guide the Board,
the Audit and Risk Committee and
the Remuneration, Nomination and
Governance Committee.
The Company also has detailed policies
regarding Market Disclosure, Risk
Management, Securities Trading, Fraud,
Diversity, Conflict of Interest, Modern
Slavery and Whistleblowers.
The Whistleblower program ensures
people can raise concerns regarding
actual or suspected contravention
of the Company’s ethical and legal
standards without fear of reprisal or
feeling threatened by doing so. It
includes an externally managed hotline
to give whistleblowers confidence and
the ability to make complaints on an
anonymous basis.
These policies were reviewed during
2022 and updated accordingly.
Media Governance
ARN takes its obligations as a provider
of news content to its audiences and
the Australian community seriously. We
operate under strict editorial controls
to ensure fair representation and
accuracy. The company has expertise
in regulatory and pre-publication
review including defamation, content
regulation, privacy and anti-surveillance,
advertising restrictions and consumer
protection legislation.
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
policies and legislative requirements
governing news content.
HT&E Annual Report 2022 35
ARN understands the
significance of the news,
current affairs and emergency
information that it broadcasts to
its audiences. This has become
even more important following
the acquisition of ARN Regional,
which services many regional
communities that rely on radio,
particularly after the floods that
occurred during 2022.
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
integrity and professionalism in news
gathering and production activities.
ARN understands the significance of
the news, current affairs and emergency
information that it broadcasts to its
audiences. This has become even more
important following the acquisition of
ARN Regional, which services many
regional communities that rely on radio,
particularly after the floods that occurred
during 2022.
ARN also understands the critical role
of news information in contributing to
civic life, political engagement and an
effective democracy and are committed
to delivering news across all settings
without political agenda or commercial
influence. The company delivers 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.
Approach to Intellectual
Property Protection
HT&E has a well-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 connect
with 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 its obligations in relation to
moral rights, performers’ consents and
crediting sources are carefully observed
at all times and that 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 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.
Radio’s unique mix of music,
personalities, talk and information create
an unrivalled connection with audiences
which we unequivocally protect.
36
Board of Directors
Hamish McLennan
Ciaran Davis
Roger Amos FCA, FAICD
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).
CEO & Managing Director
(since 24 Aug 2016)
Non-executive Director
(since 30 Nov 2018)
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.
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 over 20 years media experience
working in over 15 countries throughout
Europe and the Middle East.
In 2022, Ciaran became Chair
of Commercial Radio and Audio
in Australia – the industry body
representing the interests of commercial
radio broadcasters throughout Australia.
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.
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).
HT&E Annual Report 2022 37
Alison Cameron B Ec
Paul Connolly BComm, FCA
Belinda Rowe BA
Non-executive Director
(since 5 Jan 2022)
Non-executive Director
(since 18 Oct 2012)
Non-executive Director
(since 5 Feb 2019)
Alison is an experienced media executive
with a 34 year career spanning finance,
sales and management in commercial
radio. From 1993–2021, Alison 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
Audit & Risk Committee.
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.
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. and
UNICEF Ireland.
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
Nominated Director of Soprano Design
Limited, Non-Executive Director of
Sydney Swans Limited, Temple & Webster
Group Ltd and 3P Learning, SecondBite
NSW Chair Advisory Committee.
Previous directorships of other
Australian listed companies
(last three years)
Nil.
Previous directorships of other
Australian listed companies
(last three years)
Nil.
38
Senior management team
Ciaran Davis
Andrew Nye BBus, CA
Jeremy Child BBus LLB MSc
CEO & Managing Director
(since 24 Aug 2016)
Chief Financial Officer
(since 14 Aug 2019)
Refer to biography above.
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.
Chief Legal Officer & Company
Secretary
(since 14 Aug 2019)
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.
HT&E Annual Report 2022 Directors’ Report and Financial Report
39
40 Corporate Governance Statement
3. Capital management
40 Directors’ Report
46 Remuneration Report
62 Auditor’s Independence
Declaration
63 About The Financial Statements
64 Consolidated Financial Statements
64
Consolidated Statement
of Comprehensive Income
65 Consolidated Balance Sheet
66
67
Consolidated Statement
of Cash Flows
Consolidated Statement
of Changes in Equity
Notes To The Consolidated
Financial Statements
1. Group performance
68 1.1 Revenues
70 1.2 Expenses
70 1.3 Segment information
73 1.4 Earnings per share
87 3.1 Bank loans
88 3.2 Cash flow information
89 3.3 Financial risk management
91 3.4 Fair value measurements
93 3.5 Contributed equity
94 3.6 Share-based payments
95 3.7 Reserves and
accumulated losses
97 3.8 Dividends
4. Taxation
98 4.1 Income tax and deferred tax
5. Group structure
103 5.1 Controlled entities
106 5.2 Interests in other entities
107 5.3 Shares in other corporations
108 5.4 Investments accounted for
using the equity method
111 5.5 Parent entity
financial information
112 5.6 Deed of cross guarantee
2. Operating assets and liabilities
6. Other
74 2.1 Intangible assets
80
2.2 Property, plant
and equipment
82 2.3 Leases
85 2.4 Provisions
114 6.1 Business combination
115 6.2 Disposals
116 6.3 Contingent liabilities
116 6.4 Remuneration of auditors
117 6.5 Related parties
118 6.6 Other significant
accounting policies
119 6.7 Subsequent events
120 Directors’ Declaration
121 Independent Auditor’s Report
127 Shareholder Information
130 Corporate Directory
40
HT&E Annual Report 2022
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 2022. 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 36 and 37.
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 38.
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 and regional radio broadcaster and home to the
national KIIS and Pure Gold networks and youth radio network The Edge. On 4 January 2022, ARN acquired regional radio and
digital operations (ARN Regional) from Grant Broadcasters (refer note 6.1 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 370 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. On 31 December 2022,
the Group signed a binding share sale agreement to sell its 25% interest in Soprano Design Limited (Soprano) to Potentia Capital
(Potentia), a leading Australian technology focused private equity firm.
Under the agreement the Group will receive approximately $66.3 million in cash as consideration for the sale of its entire interest.
The sale is conditional upon receiving FIRB approval and is expected to be completed in the first half of 2023.
41
Directors’ Report
(Continued)
Dividends
Dividends paid to owners of HT&E Limited during the financial year were as follows:
Dividends
Type
Final 2021
Interim 2022
Cents
per share
AUD
million Date of Payment
3.9
5.0
12.1 23 March 2022
15.6
15 Sept 2022
Since the end of the financial year, the Directors have declared the payment of a fully franked dividend of 5.2 cents per ordinary
share. This dividend is paid from parent entity profits since 1 January 2023. This dividend is payable on 23 March 2023.
4. 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 8 to 21.
5. 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.
6. Matters Subsequent to the End of The Financial Year
Events occurring after balance date are outlined in note 6.7 to the consolidated financial statements.
7. 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 8 to 11 and
the Operating & Financial Review on pages 12 to 21.
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.
8. 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.
42
HT&E Annual Report 2022
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
Remaining relevant to advertisers and audiences is critical to meeting the Group’s strategic
audience preferences
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 acquisition of ARN Regional. 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.
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.
Advertising spend has improved in 2022 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
While considered unlikely, the loss of an Australian radio broadcasting licence would have
licence
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
There are a number of technology systems that are critical to the operations of the Group and
systems, security breaches
protection of privacy of data.
and data privacy
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.
43
Directors’ Report
(Continued)
9. 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.
10. Remuneration Report
The Remuneration Report is set out on pages 46 to 61 and forms part of this Directors’ Report.
11. 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
Alison Cameron
Belinda Rowe
Board of Directors
Audit & Risk
Committee
Remuneration, Nomination
and Governance Committee
Held
Attended
Held
Attended
Held
Attended
6
6
6
6
6
6
6
6
6
6
6
6
4
4
4
4
4
4
N/A1
N/A1
3
4
3
4
3
3
3
N/A
N/A
3
3
3
3
N/A
N/A
3
1 Ciaran Davis attended all Audit & Risk Committee meetings
Committees were formed for purposes of approving the half-year financial statements, annual financial statements, 2021 Annual
Report and 2022 Notice of Annual General Meeting. These meetings were attended as follows (Held/Attended): Hamish McLennan
(2/2), Ciaran Davis (2/2).
12. Directors’ Interests
The Remuneration Report on pages 46 to 61 contains details of shareholdings of the Directors and Executive Key Management
Personnel for the year ended 31 December 2022.
13. Shares Under Option
There were no unissued shares of HT&E Limited under option at 31 December 2022 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.
14. 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).
44
HT&E Annual Report 2022
Directors’ Report
(Continued)
15. 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.
16. 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.
17. 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 $632,436 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 6.4 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 62. 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.
18. 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 62.
45
Directors’ Report
(Continued)
19. 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
21 February 2023
46
HT&E Annual Report 2022
Remuneration Report
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 2022.
The Chairman’s and CEO & Managing Director’s reports outline the performance of the Group in 2022. In a year of significant
transformation, the Group maintained its market leading metropolitan radio audience share, successfully delivered on key
milestones in the integration of ARN Regional and advanced several long-term strategic projects.
Key projects furthered included the expansion of the Group’s digital audio capability, launch of multi-platform youth media brand,
CADA, continued investment in the ‘Culture in Action’ employee behaviours framework and the launch of InTune@ARN, our
ESG program.
The sale of HT&E’s long-held investment in Soprano for $66.3 million (subject to FIRB approval) following a lengthy process,
represents a significant return on investment and places the Group in a strong position to reduce existing debt and take advantage
of future audio opportunities.
HT&E’s financial performance for 2022 finished behind ambitious revenue targets, and the remuneration outcomes set out below
reflect this performance.
Remuneration Approach and Changes For 2022
Following the acquisition of ARN Regional which significantly increased the revenues, EBITDA, cost base and complexity of the
Group, and the critical role of KMP in managing the integration, the below changes were enacted in 2022;
•
the CEO & Managing Director’s Total Financial Remuneration (‘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%;
•
• Non-executive Director Board Member fees increased to $135,000 per annum; and
•
the Chairman’s fees increased to $320,000 per annum
The structure and financial metrics of the Group’s Total Incentive Plan (TIP) in 2022 remained consistent with the 2021 plan.
Performance and Remuneration Outcomes For 2022
As previously outlined, HT&E’s financial performance in 2022 fell short of ambitious revenue targets and accordingly the financial
performance thresholds below were not met;
•
Reported EBITDA before significant items and discontinued operations, of $91.8 million was up 53% verses 2021 and 12.1%
below target;
•
•
EPS on a post-tax basis, before significant items, of 14.6 cents was 18.5% below target; and
ROIC, calculated based on earnings before interest and tax (EBIT) and before significant items, of 10.7%, compared to target
of 12.5%.
Executive KMP also met some of their key performance indicator (KPIs) targets.
A review of KMP remuneration was undertaken in late 2021, 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.
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
47
Remuneration Report
(Continued)
Our Detailed Remuneration Report
This Remuneration Report for the year ended 31 December 2022 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 2022 reward was linked to performance
D. Total remuneration for Executive KMP
E. Actual remuneration for 2022
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
Non-executive Director (from 5 January 2022)
No other changes have occurred to the composition of KMP since 31 December 2022 up to the date of this report.
48
HT&E Annual Report 2022
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.
The Committee reviews KMP remuneration on a periodic basis, often with the assistance of external remuneration specialists.
A review was last undertaken in 2021, 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
Rewards the creation of
A holistic “total reward”
A focus on stretch goal
alignment against a peer
shareholder value through the
offering across financial and
achievement, leveraging
group of companies of a
sustainable delivery of short
non-financial elements that
financial and non-financial
similar size and complexity
and long-term business
balances reward with
KPIs to balance the “what”
outcomes
retention
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.
49
Remuneration Report
(Continued)
The Executive KMP remuneration framework is summarised below.
Element
Delivery
Structure
Fixed
Total Fixed
Cash and
– Base pay aligned to market, role scope and complexity, and
Remuneration (TFR)
Superannuation
skills, knowledge, and experience of the individual
Contributions
– Superannuation aligned to SGC
Variable
Total Incentive Plan
Cash 50%
– KPIs set at the start of the financial year
‘At risk’ and
linked to
performance
(TIP)
Financial
performance of the
company and
individual
performance over
the year
Delivered at the end of
– 75% financial KPIs (weighted equally between ROIC,
the financial year
EBITDA, and EPS)
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
– 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.
50
HT&E Annual Report 2022
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 significant items, per the table below.
EBITDA and EPS
ROIC
EBITDA and EPS
Percentage of target
performance
opportunity awarded
ROIC performance
Percentage of target
opportunity awarded
<95% of budget
95% of budget
0%
25%
Below threshold1
At threshold
>95% to <100%
Pro-rata between
Between threshold
of budget
25% and 100%
100% of budget
100%
and budget
At budget
>100% to <110%
Pro-rata between
Between budget
of budget
100% and 150%
and stretch
0%
25%
Pro-rata between
25% and 100%
100%
Pro-rata between
100% and 150%
At or above 110%
150%
At or above stretch
150%
of budget
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 2022 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 2022 was derived from EBIT as a percentage of adjusted total equity. Both measures
were on a pre-significant 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
annual Group budget.
51
Remuneration Report
(Continued)
Non-financial KPIs make up 25% of the target TIP and are aligned to key strategic priorities for the Group. For 2022, the Executive
KMPs were accountable for delivering the following outcomes to achieve their non-financial KPIs:
Strategic Priority
Outcomes Delivered
Leadership of ARN people
and culture transformation
•
•
Strong shifts in culture as measured through the Human Synergistics OCI
and OEI tools. All styles improved and key areas targeted (leadership, collaboration,
communication) improved significantly
Improvement in leadership capability through ongoing investment in development
programmes
• Development and implementation of a sales capability programme
ARN Regional integration
•
Successful integration of TRSN into national sales and all enabling functions (Finance, IT, P&C,
etc), with core technology and payroll / people systems integrated by 1st May
• ARN Regional Business Area established and business performance maintained under new
leadership
Digital business
development
• Development of a 2-year business transformation programme
• Digital transformation team established focused on 4 areas – Product Development; Listener
Experience; Sales & Fulfillment; People Experience
• Ongoing investment in cyber security capability and data management
Balance sheet, cost and
•
Successful disposals of 4KQ and non-core investments in Lux Group Limited and Soprano
capital management
Design (subject to FIRB approval)
• Creation of appropriate capital structure for the Group on completion of ARN Regional
acquisition
• Continued in-sourcing of key processes and investment in systems to gain efficiencies
52
HT&E Annual Report 2022
Remuneration Report
(Continued)
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.
There has been no change to the target remuneration mix for Executive KMP in 2022.
CEO & MD
CFO
Variable -
TIP
53%
Fixed - TFR
47%
Variable -
TIP
50%
Fixed - TFR
50%
Fixe d - TFR
Variab le - TIP
Fixe d - TFR
Variab le - TIP
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 (e q uity)
53
Remuneration Report
(Continued)
Other plan features
Feature
Dividends
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 allocation
Equity is granted based on the face value of the rights calculated at the commencement of the
methodology
performance period.
Clawback
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
Awards are forfeited for ‘bad’ leavers (e.g. resignation or termination for cause), while ‘good’ leavers
cessation of employment
(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
Participants receive pro-rated awards based on the extent to which performance and service conditions
change of control
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.
54
HT&E Annual Report 2022
Remuneration Report
(Continued)
C. How 2022 Reward was Linked to Performance
Performance Measures
The overall Company performance for 2022 is reflected in the performance measures below. Results for 2019 onwards reflect the
adoption of AASB 16 Leases in 2019.
2022
2021
2020
2019
2018
Group EBITDA1
Net profit after tax before amortisation (NPAT)1
$91.8m
$45.1m
$59.8m
$28.8m
$49.3m
$15.4m
$75.6m
$105.5m
$34.2m
$51.2m
Weighted average number of shares outstanding
309,873,237
276,605,346
279,530,868
283,605,019
307,528,973
Basic (NPAT) EPS (cents)
ROIC
Dividend paid to shareholders (cents per share) 2
Increase/(decrease) in share price (%)3
14.6
10.7%
8.9
(54%)
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%
(1) Continuing operations before significant items. 2018 includes Adshel’s results for the period it was owned by HT&E. 2019 onwards includes
impact of adoption of AASB 16 Leases.
(2) 2018 closing share price increased to reflect payment of special dividend.
Performance and Impact on Remuneration
2022 TIP Award
HT&E’s continuing operations EBITDA, EPS and ROIC performance in 2022 fell short of targets set at the beginning of the year, and
consequently the financial component (75%) was not achieved and no awards were made under this component of the 2022 TIP.
Performance for the 2022 financial year is outlined in the table below:
2022 TIP financial metrics
EBITDA performance
EPS performance
ROIC performance
Group: continuing operations
Between target and maximum;
Between target and maximum;
Between target and maximum;
87.9% of target achieved
81.5% of target achieved
85.2% of target achieved
55
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 financial performance conditions in 2022 were not met and no awards were made for the financial components of the TIP.
The financial performance in 2021 surpassed the stretch target on all financial performance conditions resulting in the maximum
award for financial metrics.
The table below summarises the 2022 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
155,250
66,844
155,250
310,500
66,844
133,688
22.5%
23.3%
16.4%
16.9%
83.6%
83.1%
(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.
56
HT&E Annual Report 2022
Remuneration Report
(Continued)
D. Total Remuneration for Executive KMP
Details of the Executive KMP remuneration for 2022 and comparatives for 2021 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
Cash salary
and fees1
$
Non-
monetary
benefits2
$
Cash
incentives3
$
Super-
annuation4
$
1,139,930
37,440
155,250
979,934
19,159
905,625
551,432
498,306
938
787
66,844
357,500
1,691,362
38,378
222,094
1,478,240
19,946
1,263,125
24,430
22,631
24,430
22,631
48,860
45,262
Other
long-term benefits
Long
service
leave5
$
Fair value
equity
awards6
$
Total
$
60,444
24,212
586,851
2,004,345
513,867
2,465,428
3,869
234,276
881,789
939
202,851
1,083,014
64,313
25,151
821,127
2,886,134
716,718
3,548,442
Executive KMP
Ciaran Davis
2022
2021
Andrew Nye
2022
2021
Total
2022
2021
(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) 2022 superannuation benefit incorporates the change to the super guarantee from 1 July 2022.
(5) Long service leave relates to amounts accrued during the year.
(6) The fair value is derived using the closing share price on the grant date.
57
Remuneration Report
(Continued)
E. Actual Remuneration for 2022
The following section sets out the value of remuneration which has been received by Executive KMP for the 2022 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 2022 is the value of the TIP
that was granted in 2021 and vested at the end of 2022 based on the share price at 31 December 2022, consistent with prior
Remuneration Reports.
Executive KMP
Ciaran Davis
2022
2021
Andrew Nye
2022
2021
Total
2022
2021
TFR1
$
TIP
$
Vested
TIP2
$
Total
$
1,200,589
155,250
551,480
1,907,319
1,020,937
905,625
–
1,926,562
575,862
66,844
217,700
860,406
520,937
357,500
–
878,437
1,776,451
222,094
769,180
2,767,725
1,541,874
1,263,125
–
2,804,999
(1) TFR comprises base salary, retirement benefits and other remuneration related costs.
(2) Vested TIP in 2022 includes the shares in relation to 2021 TIP that have now vested valued at the share price at vesting date.
58
HT&E Annual Report 2022
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
Continuing
Notice by individual/Company
Employment may be terminated by either party. Notice periods vary
according to contractual terms: CEO & Managing Director –
12 months and CFO – six months.
Termination of employment (for cause)
All contracts provide that employment may be terminated at any
time without notice for serious misconduct.
Termination of employment (without cause)
Where employment is terminated by the Company, payment may
Redundancy
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.
Non-compete/restraint
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.
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
2022
$
Chair fee1
302,5002
20,000
2023
$
Member fee
Chair fee1
Member fee
135,000
10,000
320,000
20,000
135,000
10,000
20,000
10,000
20,000
10,000
(1) The Board Chair does not receive Committee fees.
(2) The Board Chair fee increased from an annual fee of $284,700 to $320,000 effective 1 July 2022.
59
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 2022 and none is expected for 2023.
Details of the Non-executive Directors’ fees for 2022 and 2021 are set out in the table below:
Non-executive Directors
Hamish McLennan
2022
2021
Roger Amos
2022
2021
Paul Connolly
2022
2021
Belinda Rowe
2022
2021
Alison Cameron (from 5 January 2022)
2022
2021
Total
2022
2021
Fees
$
Superannuation
$
Total(1)
$
278,857
263,006
150,000
105,023
150,000
105,023
140,909
95,890
24,430
22,631
15,375
10,240
15,375
10,240
14,098
9,349
303,287
285,637
165,375
115,263
165,375
115,263
155,007
105,239
127,435
13,073
140,508
–
–
–
847,201
568,942
82,351
52,460
929,552
621,402
(1) Total fees may differ from Annual fees set out in previous table due the application of the new superannuation guarantee rate from 1 July 2022.
60
HT&E Annual Report 2022
Remuneration Report
(Continued)
H. Share-Based Remuneration
Terms and Conditions of Share-Based Remuneration
2022 TIP Awards
Executive KMP received a grant of rights under the 2022 TIP during 2022. Based on HT&E’s performance, rights have been awarded
at the end of 2022 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 2022 rights that were awarded and remain unvested at the end of 2022.
Executive KMP
Grant date1
Vesting Date
Number
of rights
granted
Number
of rights
awarded
Number
of rights
forfeited
Ciaran Davis
16 February 2022
31 December 2023
332,691
74,856
257,835
Andrew Nye
16 February 2022
31 December 2023
138,622
32,230
106,392
Value per
right at grant
date
$
1.95
1.95
Maximum
value to be
recognised
in future years
$
72,985
31,424
(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
2022 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
Vested and exercisable
Unvested
Total
Andrew Nye
Vested and exercisable
Unvested
Total
Total
Vested and exercisable
Unvested
Total
Balance at start
of the year
2020 TIP
Exercised/
vested
2021 TIP
Exercised/
vested1
Awarded
Dividend uplift
Balance at end
of the year
–
524,121
524,121
–
206,900
206,900
–
731,021
731,021
–
–
–
–
–
–
–
–
–
524,121
(524,121)
–
206,900
(206,900)
–
–
44,415
568,536
74,856
74,856
6,344
81,200
50,759
649,736
–
17,533
224,433
32,230
32,230
2,733
34,963
20,266
259,396
731,021
–
(731,021)
107,086
61,948
9,077
792,969
116,163
–
107,086
71,025
909,132
(1) Held in trust until the end of the 2-year holding lock which is 31 Dec 2024 for the 2021 TIP.
61
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
Alison Cameron
(from 5 Jan 2022)
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
–
–
–
–
–
–
–
–
–
–
–
73,000
16,250
65,935
–
35,934,8912
35,934,891
1,220,157
50,476
109,246
6,709
–
–
1,329,403
57,185
(1) 115,955 of shares for the 2019 TIP released from the two-year holding lock.
(2) Shares held by Grant Broadcasters Pty Ltd. Alison Cameron holds, directly and indirectly, less than 0.005% of the issued capital in Grant
Broadcasters. Janet Cameron, Alison’s mother, holds 99.9% of the issued capital in Grant Broadcasters.
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
$37,671 director fees received directly from Soprano Design Pty Limited by Belinda Rowe for services performed in the first half of
2022. An additional $36,906 director fees were paid to Belinda Rowe by the Company in relation for services performed on the
Board of Soprano Design Pty Limited in the second half of 2022.
The Group paid $782,289 property rental to entities associated with Alison Cameron on commercial arm’s length terms.
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 85% of ‘yes’ votes on its Remuneration Report for the 2021 financial year. No major remuneration
related concerns were raised which required the Company’s attention during the 2022 financial year.
External Remuneration Consultants
During 2022, HT&E did not receive advice from any external remuneration consultants.
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Consolidated Financial Statements
63
About the Financial Statements
The financial statements are for the consolidated entity consisting of HT&E Limited (Company) and its controlled entities (collectively the
Group). The Company is a for profit company limited by ordinary shares, incorporated and domiciled in Australia. The ordinary shares are
publicly traded on the Australian Securities Exchange.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 21 February 2023. The Directors have the
power to amend and reissue the financial statements.
Basis of Preparation
These general purpose financial statements have been prepared in accordance with the Corporations Act 2001, Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) and International Financial Reporting Standards
issued by the International Accounting Standards Board (IASB).
The Group changed its accounting policy in relation to land and buildings, refer to note 6.6 for more information. All remaining new and
amended Australian Accounting Standards and Interpretations issued by the AASB that are relevant to the Group and effective for the
current reporting period have been adopted. Refer to note 6.6 for further details.
The financial report is presented in Australian dollars which is the Company’s functional and presentation currency.
It has been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and liabilities.
The Company presents reclassified comparative information, where required, for consistency with the current year’s presentation.
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 the financial report. Amounts in the financial
report have been rounded off in accordance with that Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Key Judgements and Estimates
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom
equal the related actual results. Management also needs to exercise judgement in applying accounting policies. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of the assets and liabilities within
the next and subsequent years can be found in the following notes:
• Note 2.1 Intangible assets;
• Note 2.3 Leases;
• Note 4.1 Income tax and deferred tax;
• Note 5.3 Shares in other corporations; and
• Note 5.4 Investments accounted for using the equity method.
• Note 6.1 Business combinations
Significant Events in the Current Reporting Period
Acquisition of ARN Regional from Grant Broadcasters
On 4 January 2022, HT&E completed its acquisition from Grant Broadcasters of 46 regional radio stations and digital operations. Refer to
note 6.1 for more details.
Sale of 4KQ
On 1 July 2022, HT&E completed the sale of its 4KQ Brisbane radio station and license to a subsidiary of Sports Entertainment Group
Limited (ASX: SEG) for consideration of $12.0 million. Refer to note 6.2 for more information.
Sale of investments in Lux Group Limited (Luxury Escapes)
The Group disposed of its remaining investment in Lux Group Limited in the period for consideration of $8.8 million.
Sale of Soprano Design Pty Limited
On 31 December 2022, the Group signed a binding share sale agreement to sell its 25% interest in Soprano Design Limited (Soprano) to
Potentia Capital (Potentia), a leading Australian technology focused private equity firm. Under the agreement the Group will receive
approximately $66.3 million in cash as consideration for the sale of its entire interest. The sale is conditional upon receiving FIRB approval
and is expected to be completed in the first half of 2023. Please refer to note 6.2 for more information.
64
HT&E Annual Report 2022
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
Revenue
Other revenue and income
Total revenue and other income
Note
1.1
1.1
2022
$’000
344,890
9,022
353,912
2021
$’000
*Restated
225,036
18,965
244,001
Expenses before impairment, finance costs, depreciation and amortisation
1.2
(275,914)
(184,313)
Impairment of intangible assets
Associate impairment reversals
Finance costs
Depreciation and amortisation
Share of profits of associates and joint ventures accounted for using the
equity method
(Loss)/Profit before income tax
Income tax credit/(expense)
(Loss)/Profit for the year
Other comprehensive (loss)/income
Items that may be reclassified to profit or loss:
Net exchange difference on translation of foreign operations
Share of associate’s other comprehensive loss
Item that will not be reclassified to profit or loss:
Changes in the fair value of equity investments recorded at fair value
through other comprehensive income
Other comprehensive (loss)/income, net of tax
Total comprehensive (loss)/income
(Loss)/Profit for the year is attributable to:
Owners of the parent entity
Non-controlling interests
(Loss)/Profit for the year
Total comprehensive (loss)/income is attributable to:
Owners of the parent entity
Non-controlling interests
Earnings per share
Basic/diluted earnings per share
1.3, 2.1
(251,798)
1.3, 5.4
1.2
1.2
5.4
–
(5,911)
(20,200)
9,691
(190,220)
4.1
17,230
(172,990)
–
2,019
(12,743)
(13,839)
9,786
44,911
(26,232)
18,679
3.7
3.7
5.3
(44)
(163)
(438)
(298)
–
2,322
(207)
(173,197)
1,586
20,265
(176,345)
3,355
(172,990)
(176,552)
3,355
(173,197)
14,862
3,817
18,679
16,448
3,817
20,265
Cents
Cents
1.4
(56.9)
5.4
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
*Comparative information has been restated to reflect the change in accounting policy detailed in note 6.6.
Consolidated Balance Sheet
As at 31 December 2022
65
Current assets
Cash and cash equivalents
Receivables
Other current assets
Asset held for sale
Total current assets
Non-current assets
Shares in other corporations
Investments accounted for using the equity method
Property, plant and equipment
Intangible assets
Right-of-use assets
Other non-current assets
Total non-current assets
Total assets
Current liabilities
Payables
Contract liabilities
Lease liabilities
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Bank loans
Lease liabilities
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total parent entity interest
Non-controlling interests
Total equity
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
*Comparative information has been restated to reflect the change in accounting policy detailed in note 6.6.
Note
3.2
3.3(B)
6.2
5.3
5.4
2.2
2.1
2.3
2.3
4.1
2.4
3.1
2.3
2.4
4.1
2022
$’000
23,852
65,654
4,069
23,788
2021
$’000
*Restated
257,068
51,351
1,896
–
117,363
310,315
677
33,327
49,138
4,196
52,561
16,179
437,309
372,613
35,807
851
23,424
1,683
557,109
470,656
674,472
780,971
31,323
41,461
5,021
8,823
4,083
14,527
63,777
84,394
29,555
8,269
4,966
9,956
20,511
6,720
83,614
67,250
21,664
4,097
129,072
111,250
251,290
204,261
315,067
287,875
359,405
493,096
3.5
3.7
3.7
1,547,690
1,475,706
(46,025)
(45,078)
(1,178,034)
(974,183)
323,631
456,445
35,774
36,651
359,405
493,096
66
HT&E Annual Report 2022
Consolidated Statement of Cash Flows
For the year ended 31 December 2022
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Dividends received
Interest received
Interest paid
Income taxes paid
Settlement of tax in dispute
Net cash inflows from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for software
Proceeds from sale of property, plant and equipment
Proceeds from sale of investments
Proceeds from sale of controlled entities
Acquisition of controlled entities, net of cash acquired
Receipts from short-term deposits
Net loans from/(to) associate
Dividends received from associate
Net cash (outflows)/inflows from investing activities
Cash flows from financing activities
Proceeds from borrowings
Payments for borrowing costs
Principal elements of lease payments
Payments for treasury shares
Dividends paid to company’s shareholders
Payments for share buyback
Net payments to non-controlling interests
Net cash (outflows)/inflows from financing activities
Change in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Effect of exchange rate changes
Note
2022
$’000
2021
$’000
383,907
238,387
(311,284)
(187,162)
51
313
(5,390)
(25,389)
(22,305)
19,903
–
422
(3,205)
(9,794)
–
38,648
(7,923)
(3,297)
(345)
195
8,806
12,045
(239,106)
–
(45)
5,019
(14)
32
63,628
–
–
50,000
3,667
6,599
(221,354)
120,615
17,000
(266)
(12,854)
(1,470)
(27,648)
(2,339)
(4,294)
(31,871)
(233,322)
257,068
106
65,003
(80)
(14,278)
(10)
(9,675)
(5,046)
(3,216)
32,698
191,961
65,080
27
4.1
3.2
2.2
2.1
5.3
6.2
6.1
5.4
3.1
2.3
3.7
3.8
3.5
Cash and cash equivalents at end of the year
3.2
23,852
257,068
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
67
Contributed
equity
$’000
Reserves
$’000
Accumulated
losses
$’000
Note
Non-
controlling
interests
$’000
Total
$’000
Total
equity
$’000
1,480,752
(25,605)
(1,001,233)
453,914
36,051
489,965
–
14,862
14,862
3,817
18,679
Balance at 31 December 2021 Restated*
1,475,706
(45,078)
(974,183)
456,445
36,651
493,096
–
(3,217)
(3,217)
1,475,706
(45,078)
(974,183)
456,445
36,651
493,096
–
(176,345)
(176,345)
3,355
(172,990)
Balance at 1 January 2021
Restated*
Profit for the period
Other comprehensive income
Share-based payments
Share buy-back
Dividends paid to company’s shareholders
Transfers within equity
Treasury shares vested to employees
Acquisition of treasury shares
Transactions with non-controlling interests
Balance at 1 January 2022
Profit/(loss) for the year
Other comprehensive loss
Share-based payments
Contributions to equity, net
of transaction costs
Share buy-back
Dividends paid to shareholders
Transfers within equity
Treasury shares vested to employees
Acquisition of treasury shares
Acquisition of non-controlling interest
Transactions with non-controlling interests
–
–
–
(5,046)
–
–
–
–
–
3.7
3.5
3.8
3.7
3.7
3.7
–
–
–
74,323
(2,339)
–
–
–
–
–
–
3.7
3.5
3.5
3.8
3.7
3.7
3.7
6.1
1,586
633
–
–
–
–
–
1,586
633
(5,046)
(9,675)
(9,675)
(21,863)
21,863
181
(10)
–
–
–
–
–
181
(10)
(207)
(560)
–
–
–
(142)
1,432
(1,470)
–
–
–
–
–
–
(207)
(560)
74,323
(2,339)
(27,648)
(27,648)
142
–
1,432
(1,470)
–
–
–
–
–
–
–
–
–
–
–
1,586
633
(5,046)
(9,675)
–
181
(10)
–
–
–
–
–
–
–
–
(207)
(560)
74,323
(2,339)
(27,648)
–
1,432
(1,470)
Balance at 31 December 2022
1,547,690
(46,025)
(1,178,034)
323,631
35,774
359,405
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
*Comparative information has been restated to reflect the change in accounting policy detailed in note 6.6.
–
–
37
37
(4,269)
(4,269)
68
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
1. Group Performance
1.1 Revenue
Revenue and other income
Revenue
Revenue from contracts with customers
Gain on financial assets held at fair value through profit or loss
5.3
Dividend income
Other
Other income
Interest income
Total other revenue and income
Total revenue and other income
Revenue recognised in the year ended 31 December 2022 that was included in the contract liabilities balance as at 1 January 2022
is $4.8 million (2021: $4.2 million).
Note
2022
$’000
2021
$’000
344,890
344,890
5,292
51
3,361
8,704
318
9,022
225,036
225,036
17,931
–
699
18,630
335
18,965
353,912
244,001
69
Notes to the Consolidated Financial Statements
(Continued)
1.1 Revenue (Continued)
ACCOUNTING POLICY
Revenue
The key revenue streams and policies are detailed below:
Under AASB 15 Revenue from Contracts with Customers, revenue is recognised when a customer obtains control of the goods or
services. Determining the timing of the transfer of control requires judgement. The Group recognises revenue when control of the
services or goods passes to the customer. Revenue is recognised gross of rebates and agency commissions. Payment terms vary
between 30 and 45 days from the invoice issue date.
Type of
product/service Segment
ARN & HK
Outdoor
Segment
Advertising
revenue
(Regional,
Metro, Digital
and Other)
Nature and timing of satisfaction of performance obligations
Advertising revenue includes broadcast revenue, display revenue, sponsorship revenue, web
advertising revenue, revenue from online radio platforms, and advertising from podcasts.
•
Broadcast revenue is recognised when each advertisement is aired per the contract
terms.
• Web revenue is recognised over the time period which the advertisements are
•
displayed.
Revenue from online radio platforms is recognised at a point in time when each
advertisement is aired.
•
Revenue from podcast advertising is recognised when advertisements are served.
•
Revenue from sponsorships is recognised when advertisements are aired.
• Display revenue (HK Outdoor) is recognised over the time period which the
advertisements are displayed.
Services
revenue (Other)
HK Outdoor
&
Investments
Includes production and installation revenue. Production and installation revenue, where it is a
distinct service, is recognised by reference to stage of completion of the service.
Also includes cleaning and maintenance revenue, which is recognised when the service occurs.
Historically the Group has acted as principal when recognising revenue on broadcast radio contracts. With the introduction of
podcast and streaming contracts, the Group has had to assess whether it acts as a principal or agent. The Group makes this
assessment based on the requirements of AASB 15 Revenue from Contracts with Customers, including whether it has inventory and
credit risk, and the extent to which the Group can determine the price. Where the Group assesses that its acts as principal in the
contract it recognises revenue on a gross basis, with a corresponding expense for any fees. Alternatively, where the Group assesses
that it acts as agent in the contract, it recognises revenue net of any corresponding fees.
Contract costs
The Group applies the practical expedient under AASB 15 Revenue from Contracts with Customers to expense contract acquisition
costs as they are incurred, as the expected costs have an amortisation period of less than 12 months.
Contract assets and liabilities
Contract assets relate primarily to the Group’s rights to consideration for work completed but not billed at each reporting date.
Contract assets are transferred to receivables when the rights become unconditional. This usually occurs when the Group issues an
invoice to a customer.
Contract liabilities primarily relate to consideration received in advance from customers, for which the performance obligation is yet
to be satisfied.
Government subsidies and grants
Subsidies from relevant governments compensates the Group for employee benefits expense incurred and is recognised in profit or
loss on a systematic basis in the period in which the expense is recognised.
For the years ending 31 December 2021, Canberra FM received the Public Interest News Gathering Fund grant. This has been
recorded in other income.
For the year ending 31 December 2021 and 31 December 2022, Hong Kong domiciled entities within the Group were eligible for the
Hong Kong Government Employment Support Scheme. This has been recorded within Other Income.
70
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
1.2 Expenses
Employee benefits expense
Production and distribution expense
Selling and marketing expense
Rental and occupancy expense
Professional fees
Repairs and maintenance costs
Travel and entertainment costs
Penalties – tax settlement
Acquisition costs
Costs associated with sale of business
Other expenses
Total expenses before impairment, finance costs, depreciation and
amortisation
Interest – lease liabilities
Interest and finance charges
Interest – tax settlements
Borrowing costs amortisation
Total finance costs
Depreciation – right-of-use assets
Depreciation – other assets
Amortisation
Total depreciation and amortisation
Note
1.3
1.3
1.3
2.3
4.1
2.3
2.2
2.1
2022
$’000
166,930
18,668
47,744
11,920
5,379
4,958
3,819
–
5,334
888
10,274
275,914
1,899
3,600
–
412
5,911
11,623
6,178
2,399
20,200
2021
$’000
Restated*
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
3,139
755
13,839
*Comparative information has been restated to reflect the change in accounting policy detailed in note 6.6.
1.3 Segment information
Description of segments
The Group has identified its operating segments based on the internal reports reviewed by the Chief Operating Decision Maker
(“CODM”) in assessing performance and determining the allocation of resources. At 30 June 2022, the Group determined there
were four operating segments being ARN Metro, ARN Regional, HK Outdoor and Investments. With the integration of the ARN
Metro and ARN Regional segments now largely complete, Australian Radio Network (ARN) is now reporting as one segment to the
CODM. The revised segment reporting will now include three segments as follows:
Reportable segment
Principal activities
ARN
Metropolitan and Regional radio networks, on-demand radio, streaming and podcasting (Australia)
HK Outdoor
Billboard, transit and other outdoor advertising (Hong Kong)
Investments
Includes controlling interests in Emotive Pty Limited (creative agency) and equity accounted investments
in Soprano Design Pty Limited (software vendor for secure messaging services)
The CODM assesses the performance of the operating segments based on a measure of earnings before interest, tax, depreciation
and amortisation (EBITDA) from continuing operations which excludes the effects of significant items such as gains or losses on
disposals of businesses and restructuring related costs.
71
Notes to the Consolidated Financial Statements
(Continued)
1.3 Segment information (Continued)
Results by operating segment
The segment information provided to the CODM for the year ended 31 December 2022 is as follows:
ARN
HK Outdoor
Investments
Corporate
Group
elimination
Total
192,524
107,687
14,600
–
–
–
–
19,487
19,487
–
8,750
19,243
14,253
–
–
–
10,997
10,997
4,400
5,949
33,759
–
–
–
–
–
–
(9,452)
11,774
7,648
221,205
–
–
–
(405)
(405)
–
–
–
–
2022
$’000
Revenue
Metro
Regional
Digital
Other
Revenue from contracts with customers
314,811
Share of profits of associates
Segment result
Segment assets
Segment liabilities
5,291
86,549
609,696
71,961
Reconciliation of segment result to loss before income tax
Segment result
Depreciation and amortisation A
Net finance costs
ARN Regional acquisition costs B
Integration costs C
Loss on disposal of 4KQ D
Implementation of software as a service (SaaS) products E
Impairment of intangible assets
Gain on financial asset held at fair value through profit and loss F
Loss before income tax
Explanation of statutory adjustments
(A) Consists of depreciation of $17.8 million and amortisation of $2.4 million (refer to note 1.2).
(B) Transaction costs associated with the acquisition of ARN Regional (refer to note 6.1).
(C) Costs relating to the integration of ARN Regional and ARN Metro.
(D)
(E) Relates to one off expenditure for new systems implemented.
(F) Gain recognised on fair value uplift of HT&E’s investment in Lux Group Limited (refer to note 3.4).
Impairment of $1.9 million, PP&E disposal of $0.4 and sale costs of $0.5 million recognised on the sale of 4KQ.
192,524
107,687
14,600
30,079
344,890
9,691
91,796
674,472
315,067
91,796
(20,200)
(5,593)
(5,334)
(3,043)
(2,795)
(452)
(249,891)
5,292
(190,220)
72
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
1.3 Segment Information (Continued)
2021
$’000
*Restated
Revenue
Metro
Digital
Other
186,226
9,358
–
Revenue from contracts with customers
195,584
Share of profits of associates
Segment result
Segment assets
Segment liabilities
4,760
53,821
483,847
46,747
Reconciliation of segment result to loss before income tax
Segment result
Depreciation and amortisation A
Net finance costs B
Cost associated with sale of business C
Acquisition costs D
Penalties – tax settlements E
Associate share of impairment gain/(loss) and other adjustments F
Gain on financial asset held at fair value through profit and loss G
Implementation of software as a service (SaaS) products H
Profit before income tax
Explanation of statutory adjustments
ARN
HK Outdoor
Investments
Corporate
Group
elimination
Total
–
–
21,851
21,851
–
10,506
20,362
17,368
–
–
8,322
8,322
4,329
5,582
–
–
–
–
–
(10,094)
25,740
251,022
3,371
220,389
–
–
(721)
(721)
–
–
–
–
186,226
9,358
29,452
225,036
9,089
59,815
780,971
287,875
59,815
(13,839)
(12,408)
(428)
(1,958)
(5,734)
2,716
17,931
(1,184)
44,911
(A) Consists of depreciation of $13.1 million and amortisation of $0.8 million (refer to note 1.2).
(B)
Includes $8.9 million interest expense on tax settlement (refer to note 4.1).
(C)
(D)
Transaction costs associated with the disposal of investment in OML and unsuccessful disposal of investment in Soprano.
Initial costs related to the acquisition of ARN Regional incurred in the period.
Penalties on ATO settlement (refer to note 4.1).
(E)
(F) Consists of part reversal of previous impairment in Nova Perth investment ($2.0 million) (refer to note 5.4) and adjustment to associate revenues
($1.3 million), offset by $0.6 million impairment of goodwill held by Soprano.
(G) Gain recognised on fair value uplift of HT&E’s investment in Luxury Escapes, prior to its partial disposal (refer to note 5.3).
(H)
Relates to one off expenditure on new systems implemented.
Other segment information
The Group is domiciled in Australia and operates predominantly in Australia and Hong Kong. Revenue from contracts with
customers in Australia is $325.4 million (2021: $203.2 million) and in Asia is $19.5 million (2021: $21.9 million). Segment revenues
are allocated based on the country in which the customer is located.
The total of non-current assets located in Australia is $548.8 million (2021: $461.1 million) and in Hong Kong is $8.3 million (2021:
$9.5 million). Segment assets are allocated to countries based on where the assets are located.
73
Notes to the Consolidated Financial Statements
(Continued)
1.3 Segment Information (Continued)
ACCOUNTING POLICY
Segment revenues and expenses comprise amounts that are directly attributable to a segment and the relevant portion that
can be allocated on a reasonable basis. Corporate overheads, including centralised finance, legal and administrative costs,
are not allocated against operating segments but rather are included above as unallocated amounts.
Segment revenues and results exclude transfers between segments. Such transfers are priced on an arm’s length basis and
are eliminated on consolidation.
1.4 Earnings per share
(a) Reconciliation of earnings used in calculating earnings per share (EPS)
(Loss)/Profit attributable to owners of the parent entity
(Loss)/Profit attributable to owners of the parent entity used in calculating basic/diluted EPS
2022
$’000
2021
$’000
*Restated
(176,345)
(176,345)
14,862
14,862
Number
Number
(b) Weighted average number of shares
Weighted average number of shares used as the denominator in calculating basic EPS
309,873,237
276,605,346
Adjusted for calculation of diluted EPS:
Unvested/unexercised rights
45,499
348,259
Weighted average number of shares used as the denominator in calculating diluted EPS
309,918,736
276,953,605
*Comparative information has been restated to reflect the change in accounting policy detailed in note 6.6.
ACCOUNTING POLICY
Basic earnings per share
Basic earnings per share is determined by dividing:
•
the net profit or loss attributable to owners of the Company; by
•
the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in
ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking into account:
•
the after-tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
•
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
74
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
2. Operating Assets and Liabilities
2.1 Intangible Assets
2021
$’000
Cost
Goodwill
Software
490
3,754
Accumulated amortisation and impairment
–
(2,438)
Net book amount
Movements
490
1,316
Opening net book amount
490
2,382
Additions
Disposals
Transfers and other adjustments
Amortisation
Impairment charge
Foreign exchange differences
–
–
–
–
–
–
14
–
(558)
(522)
–
–
Closing net book amount
490
1,316
Customer
relationships
–
–
–
–
–
–
–
–
–
–
–
Radio
licences
375,284
(4,477)
370,807
371,040
–
–
–
(233)
–
–
370,807
Brands
Total
–
–
–
–
–
–
–
–
–
–
–
379,528
(6,915)
372,613
373,912
14
–
(558)
(755)
–
–
372,613
2022
$’000
Cost
Accumulated amortisation and impairment
Net book amount
Movements
Opening net book amount
Additions
Goodwill
Software
Customer
relationships
Radio
licences
Brands
Total
490
–
490
490
–
4,096
12,310
402,313
25,751
444,960
(2,940)
-
(4,711)
–
(7,651)
1,156
12,310
397,602
25,751
437,309
1,316
345
–
–
370,807
–
–
–
372,613
345
Acquisition of subsidiary
156,770
16,622
125,555
31,295
330,242
Disposals
Transfers and other adjustments
Amortisation
Impairment charge *
Foreign exchange differences
Closing net book amount
–
–
–
–
(1)
–
–
(11,694)
–
(504)
(1,662)
(233)
–
–
–
(11,694)
(1)
(2,399)
(156,770)
–
490
–
–
(2,650)
(86,833)
(5,544)
(251,797)
–
–
–
–
1,156
12,310
397,602
25,751
437,309
*Impairment charge relates to $249.9 million for the ARN CGU and $1.9 million for radio licenses recognised on the sale of 4KQ.
75
Notes to the Consolidated Financial Statements
(Continued)
2.1 Intangible Assets (Continued)
ACCOUNTING POLICY
Summary of goodwill and other intangible assets
Asset
Goodwill
Customer relationships
Brand
Software
Radio licences
Digital radio licence
Goodwill
Useful life
Indefinite
10 years
Indefinite
3-5 years
Indefinite
20 years
Amortisation
method
Acquired or
Internally generated
No amortisation
Straight-line basis
No amortisation
Acquired
Acquired
Acquired
Straight-line basis
Internally generated
No amortisation
Straight-line basis
and acquired
Acquired
Acquired
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable
assets of the acquired business at the date of acquisition. Goodwill is not amortised but rather is subject to impairment
testing as described below.
Brands
Brands are accounted for as identifiable assets and are brought to account at cost. The Directors have considered the
geographic location, legal, technical and other commercial factors likely to impact the assets’ useful lives and consider
that they have indefinite lives. Accordingly, no amortisation has been provided against the carrying amount for brands.
Customer relationships
Customer relationships represent future income streams attributable to customer relationships. They are accounted for as
identifiable assets and carried at cost less accumulated depreciation and any accumulated impairment loss. Amortisation is
calculated on a straight-line basis over the useful life of the asset.
Software
Costs incurred in developing systems and acquiring software and licences are capitalised to software. Costs capitalised
include materials, services, payroll and payroll related costs of employees involved in development. Amortisation is calculated
on a straight-line basis over the useful life of the asset.
Where expenditure relates to Software-as-a-Service (SaaS) arrangements, an assessment is undertaken to determine if this can
be capitalised.
Radio licences
Commercial radio licences are accounted for as identifiable assets and are brought to account at cost. The Directors believe
the licences have indefinite lives and accordingly, no amortisation has been provided against the carrying amount. The
commercial radio licences held by the Group are renewable every five years under the provisions of the Broadcasting Services
Act 1992. The Directors understand that the revocation of a radio licence has never occurred in Australia and have no reason
to believe the licences will not be renewed from time to time for the maximum period allowable under the Act and without
imposition of any conditions. As a result, the radio licences have been assessed to have indefinite useful lives.
The digital radio licence is accounted for as an identifiable asset and is brought to account at cost. The licence is amortised
over the term of the contract on a straight-line basis.
76
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
2.1 Intangible Assets (Continued)
Year-End Impairment Review
A comprehensive impairment review was conducted at 31 December 2022. The recoverable amount of each cash generating unit
(CGU) that includes goodwill or indefinite life intangible assets was reviewed. Below is the allocation of goodwill and other
non
amortising intangible assets to cash generating units (CGUs) as at period-end, subsequent to the impairment test:
‑
Name of CGU
ARN
Emotive
Total goodwill and other non-amortising intangible assets
2022
Goodwill
$’000
2022
Other non-amortising
intangible assets
$’000
–
490
490
420,224
–
420,224
2021
Goodwill
$’000
–
490
490
Other non
2021
amortising
intangible assets
$’000
‑
367,451
–
367,451
For the six months period ended 30 June 2022, ARN Metro and ARN Regional operated as separate CGU’s. During the six months
to December 2022, significant progress was made on the integration of ARN Metro and ARN Regional. At 31 December 2022 the
Group determined there to be only one CGU and operating segment for ARN.
The Australian Radio Network (ARN) CGU incorporates metropolitan and regional radio networks, on-demand radio, streaming and
podcasting in Australia which includes indefinite life intangible assets.
At 31 December 2022 an impairment of $249.9 million was recorded in the ARN CGU and apportioned across intangible assets
as follows: goodwill was fully impaired $156.8 million, radio licenses were impaired by $84.9 million, brands were impaired by
$5.5 million and customer relationships were impaired by $2.7 million at 31 December 2022. The impairment reflects an increase in
the ARN CGU discount rate and the estimated impacts of the current macro-economic environment on future advertising revenues.
At 30 June 2022, a $1.9 million impairment charge was recognised on the sale of the 4KQ radio license. Refer to note 6.2 for more
information.
The recoverable amount of the ARN CGU was estimated based on value in use calculations, using management budgets and
forecasts for a 5-year period, after adjusting for central overheads.
The key assumptions for the impairment review as at 31 December 2022, used to calculate the recoverable amount are
presented overleaf.
77
Notes to the Consolidated Financial Statements
(Continued)
2.1 Intangible Assets (Continued)
(A) Cash flows
Year 1 cash flows
Based on Board approved annual budget derived with reference to a range of internal and relevant
external industry data and analysis. Revenue forecasts are discounted by a factor of approximately 6%
reflecting recent historical accuracy of budget achievement.
Years 2, 3, 4 and 5
Revenue forecasts are prepared based on management’s current assessment for each CGU, with
cash flows
consideration given to internal information and relevant external industry data and analysis. In general:
• market growth in the ARN CGU is forecast across the cash flow period. The revenue forecast
assumes the Australian radio market will return to historical pre-COVID-19 pandemic levels within
the forecast period, and the ARN CGU will gain some additional market share or reclaim lost
market share through continued investment in content, marketing and operations. Revenue
forecasts for radio, streaming and podcasting take into account a range of internal and relevant
external industry data and analysis;
•
•
•
•
the ARN CGU is forecast to benefit from revenue synergies over the forecast period through
optimizing a national network of metropolitan and regional radio stations; and
Revenue forecasts are adjusted for the discount to year 1 cash flows, reflecting recent historical
accuracy of budget achievement.
expenses are forecast on a detailed basis, based on their nature. Variable costs are forecast to
move in line with revenue movements. Personnel costs are forecast to move in line with
headcount and adjusted for expected inflation. Other costs are forecast based on management
expectations, considering existing contractual arrangements.
the above assumptions result in EBITDA CAGR of 2.8% for ARN CGU across the cash flow
period.
Terminal value cash flows Cash flows are extrapolated at growth rates not exceeding the long-term average growth rate for the
industry in which the CGU operates.
(B) Discount rate and long-term growth rate
The discount rates (per annum) used reflect specific risks relating to the relevant segments.
Name of CGU
ARN
Dec 2022
Post-tax
discount rate
Dec 2022
Pre-tax
discount rate
Dec 2022
Long-term
growth rate
Dec 2021
Post-tax
discount rate
Dec 2021
Pre-tax
discount rate
Dec 2021
Long-term
growth rate
10.25%
14.0%
1.5%
9.0%
12.2%
1.5%
78
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
2.1 Intangible Assets (Continued)
(C) Estimation uncertainty and key assumptions
KEY JUDGEMENTS AND ESTIMATES
The Group tests whether goodwill and other non-amortising intangible assets have suffered any impairment, in accordance
with the accounting policy stated below. The recoverable amounts of cash generating units have been determined based on
the higher of fair value less costs to sell, or value in use, calculations. These calculations require the use of assumptions. Refer
below for details of these assumptions and the potential impact of changes to these assumptions.
Value in use calculations are prepared based on the Board approved annual budget, reforecast for current conditions and extended
over the forecast period using growth rates derived with reference to a range of internal and relevant external industry data analysis,
including but not limited to publicly available broker reports and media industry experts. The discount rate used is based on an
internally prepared weighted average cost of capital (WACC) calculation and reflects risks associated with underlying assets.
Terminal value cashflows have been extrapolated at growth rates not exceeding the long-term average growth rate for the industry
in which the CGU operates.
At 31 December 2022, an impairment loss of $249.9 million was recorded against the goodwill, radio licences, customer
relationship, and brands in the ARN CGU, reflecting a recoverable amount of $436.8 million. $1.9 million of the impairment loss
related to the impairment of 4KQ radio license. The carrying values of the other assets in the ARN CGU were considered equal to
their value in use. After the impairment loss, the estimated recoverable amount of the ARN CGU, based on a value in use
calculation, equals its carrying amount. The impairment reflects an increase in the ARN CGU discount rate and the estimated
impacts of the current macro-economic environment on future advertising revenues.
At 31 December 2022 the market capitalisation of the Group was $301.3 million based on the closing share price at
31 December 2022, representing a $169.8 million deficiency to the adjusted enterprise value (adjusted for debt, minority interest
and other relevant items) of $461.9 million, after the current year impairment of $249.9m. The Group considered the likely reasons
for the deficiency and concluded the value in use calculations are appropriate in supporting the carrying values of the ARN CGU at
31 December 2022.
Any variation in the key assumptions used to determine the value in use would result in a change in the recoverable amount of the
ARN CGU. The directors and management have considered and assessed reasonably possible changes in key assumptions and the
approximate impact on the recoverable amount;
•
•
•
1.0 % increase in the post-tax discount rate
1.0% reduction in the long-term growth rate
Impact of 10.0% EBITDA shortfall per annum on EBITDA CAGR
Discount rate change
Long-term growth rate change
EBITDA CAGR (EBITDA shortfall of 10% per annum)
From
To
10.25%
11.25%
1.5%
2.8%
0.5%
0.7%
Change to
carrying value
(53,093)
(37,961)
(63,059)
79
Notes to the Consolidated Financial Statements
(Continued)
2.1 Intangible Assets (Continued)
ACCOUNTING POLICY
Impairment
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment and whenever there is an indication that they may be impaired. Assets that are subject to amortisation are tested
for impairment whenever changes in circumstances indicate that the asset’s carrying amount may exceed its recoverable
amount. An impairment charge is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell, and value in use. For the purpose of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which
are largely independent of the cash inflows from other assets or groups of assets (CGUs). Non-financial assets other than
goodwill that suffer an impairment are reviewed for possible reversal of the impairment at each reporting date.
80
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
2.2 Property, Plant and Equipment
2021
$’000
*Restated
Cost or fair value
Accumulated depreciation and impairment
Capital works in progress
Net book amount
Movements
Opening net book amount
Additions
Depreciation
Transfers and other adjustments
Disposal
Foreign exchange differences
Closing net book amount
2022
$’000
Cost or fair value
Accumulated depreciation and impairment
Capital works in progress
Net book amount
Movements
Opening net book amount
Acquisition of subsidiary
Additions
Depreciation
Transfers and other adjustments
Disposal
Foreign exchange differences
Closing net book amount
Freehold land
Buildings
423
–
–
423
423
–
–
–
–
–
603
(325)
–
278
290
3
(15)
–
–
–
Plant and
equipment
76,989
(64,557)
3,046
15,478
15,736
3,294
(3,124)
(367)
(66)
5
Total
78,015
(64,882)
3,046
16,179
16,449
3,297
(3,139)
(367)
(66)
5
423
278
15,478
16,179
Freehold land
Buildings
11,464
–
–
11,464
423
11,341
–
–
–
(300)
–
8,422
(611)
–
7,811
278
7,992
37
(411)
22
(108)
–
Plant and
equipment
90,329
(65,616)
5,150
29,863
15,478
13,680
7,886
(5,767)
(871)
(553)
11
Total
110,215
(66,227)
5,150
49,138
16,179
33,013
7,923
(6,178)
(849)
(961)
11
11,464
7,810
29,864
49,138
The Group had capital commitments of $nil as at 31 December 2022 (2021: $147,240).
*Comparative information has been restated to reflect the change in accounting policy detailed in note 6.6.
81
Notes to the Consolidated Financial Statements
(Continued)
2.2 Property, Plant and Equipment (Continued)
ACCOUNTING POLICY
Property, Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
Depreciation
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or
revalued amounts, net of their residual values, over their estimated useful lives, as follows:
•
buildings: 20–50 years;
•
plant and equipment: 3-30 years; and
The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each balance date. Gains and losses
on disposals are determined by comparing proceeds with carrying amount and are included in the income statement.
Refer to the change in accounting policy note in note 6.6.
Impairment of assets
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount. Assets that are subject to depreciation (amortisation) are tested for impairment
whenever changes in circumstances indicate that the asset’s carrying amount may exceed its recoverable amount. An
impairment charge is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
Assets that suffer an impairment are reviewed for possible reversal of the impairment at each reporting date.
82
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
2.3 Leases
As a lessee, the Group leases several assets including property, advertising spaces, motor vehicles and other equipment. The
weighted average lease term is 9.2 years (2021: 9.3 years).
(A) Amounts recognised in the balance sheet
Property
Advertising concession agreements
Motor vehicle and other
Total right-of-use assets
Current
Non-current
Total lease liabilities
2022
$’000
29,318
5,621
868
35,807
8,823
29,555
38,378
2021
$’000
16,138
7,147
139
23,424
9,956
21,664
31,620
Additions to the right-of-use assets during the 2022 financial year were $22.7 million (2021: $2.6 million). $13.6 million additions
related to the acquisition of ARN Regional.
KEY JUDGEMENTS AND ESTIMATES
Whenever changes in circumstances indicate that the right-of-use asset carrying amount may exceed its recoverable amount,
the Group applies judgement when testing whether right-of-use assets have suffered any impairment. An impairment charge
is recognised for the amount by which the right-of-use asset’s carrying amount exceeds its recoverable amount. Right-of-use
assets that suffer an impairment are reviewed for possible reversal of the impairment at each reporting date.
(B) Amounts recognised in the consolidated statement of comprehensive income
The consolidated statement of comprehensive income shows the following amounts relating to leases:
Property
Advertising concession agreements
Motor vehicle and other
Depreciation charge of right-of-use assets
Interest expense on lease liabilities
Rental and occupancy expense relating to short-term leases
Rental and occupancy expense relating to variable lease payments not included in the
2022
$’000
6,106
5,233
284
11,623
1,899
1,625
2021
$’000
3,439
6,201
305
9,945
1,540
2,332
measurement of the lease liability
968
465
The total cash outflow for leases, inclusive of principal and interest was $14.8 million (2021: $15.8 million).
As at 31 December 2022, there were indications that the carrying amount of HK Outdoor Advertising Concession Agreements may
exceed their recoverable amount, so an impairment test was performed which determined no impairment to be recognised. The
recoverable amount of the right-of-use assets were based on the discounted cash flow analysis over the contractual period for right
of-use assets, which takes into account the financial performance of specific advertising concession agreements as 31 December
2022.
Notes to the Consolidated Financial Statements
(Continued)
83
2.3 Leases (Continued)
ACCOUNTING POLICY
The Group leases various properties, advertising spaces, motor vehicles and other equipment. Rental contracts are typically
made for fixed periods of 1 to 15 years, however may be more than 20 years and include extension options.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the
lease and non-lease components based on their relative stand-alone prices.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
Leased assets may not be used as security for borrowing purposes.
Lease liabilities
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
•
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
•
•
•
amounts expected to be payable by the Group under residual value guarantees;
the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease liability excludes non-lease components including variable lease amounts which are not linked to a rate or index.
These components are expensed as incurred.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not
included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take
effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
84
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
2.3 Leases (Continued)
ACCOUNTING POLICY (Continued)
Incremental borrowing rate
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset
in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
• where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect
changes in financing conditions since third-party financing was received;
•
uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Group,
which does not have recent third-party financing; and
• makes adjustments specific to the lease, e.g. term, country, currency and security.
Right-of-use assets
Right-of-use assets are measured at cost comprising the following:
•
the amount of the initial measurement of lease liability;
•
•
•
any lease payments made at or before the commencement date, less any lease incentives received;
any initial direct costs; and
restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line
basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the
underlying asset’s useful life.
Extension and termination options
Extension and termination options are included in a number of property leases across the Group. These are used to maximise
operational flexibility in terms of managing the assets used in the Group’s operations. The majority of extension and
termination options held are exercisable only by the Group and not by the respective lessor.
In determining the lease term, management considers all facts and circumstances that create an economic incentive to
exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options)
are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
Rental and occupancy expense
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised
on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
Low
value assets comprise IT equipment and small items of office furniture.
Rental outgoings are treated as non-lease components and are recognised as expense in profit or loss. Other property
‑
expenses which do not transfer substantially all of the asset's economic benefits to the Group are recognised on a
straight
line basis as expense in profit or loss.
‑
Notes to the Consolidated Financial Statements
(Continued)
2.4 Provisions
Current
Employee benefits
Make good
Other
Total current provisions
Non-current
Employee benefits
Make good
Total non-current provisions
2022
$’000
11,862
2,615
50
14,527
2,216
6,053
8,269
Movements in each class of provision during the financial year, other than employee benefits, are set out below:
2022
Carrying amount at beginning of the year
Additional amounts recognised
Acquired
Amounts used
Reversal
Foreign exchange differences
Carrying amount at end of the year
Make good
$’000
2,885
1,240
4,760
(233)
–
16
8,668
Other
$’000
450
50
–
(37)
(413)
–
50
85
2021
$’000
6,270
–
450
6,720
1,212
2,885
4,097
Total
$’000
3,335
1,290
4,760
(270)
(413)
16
8,718
86
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
2.4 Provisions (Continued)
ACCOUNTING POLICY
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate
that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the
provision due to the passage of time is recognised as interest expense.
Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave, and long service leave, in respect of
employees’ services up to the reporting date expected to be settled wholly within 12 months from the reporting date are
measured at the amounts expected to be paid when settled.
Liabilities for annual leave and long service leave not expected to be settled wholly within 12 months after the end of the
reporting date are measured as the present value of expected future payments to be made. Consideration is given to
expected future wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the reporting date on corporate bonds rates with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows. Remeasurements as a result of experience
adjustments and changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the consolidated balance sheet if the entity does not have an
unconditional right to defer settlement for 12 months after the reporting period, regardless of when the actual settlement
is expected to occur.
Make good
The Group will recognise a make good provision when they are included in lease agreements for which the Group has a legal
or constructive obligation. The present value of the estimated costs of dismantling and removing the assets and restoring the
site is recognised as a provision. At each reporting date, the liability is remeasured in line with changes in discount rates,
estimated cash flows and the timing of those cash flows.
These costs have been capitalised to right of use assets and property, plant and equipment and are amortised over the
shorter of the term of the lease and the useful life of the assets.
Notes to the Consolidated Financial Statements
(Continued)
87
3. Capital Management
3.1 Bank loans
Non-current bank loans
Bank loans – unsecured
Total non-current bank loans (i)
Deduct:
Borrowing costs
Accumulated amortisation
Net borrowing costs
Total non-current interest-bearing liabilities (i)
Net debt (i)
Non-current bank loans
Net borrowing costs
Cash and cash equivalents
Net cash
Note
2022
$’000
85,000
85,000
2,470
(1,864)
606
84,394
84,394
606
2021
$’000
68,000
68,000
2,511
(1,761)
750
67,250
67,250
750
3.2
(23,852)
(257,068)
61,148
(189,068)
(i)
The majority of the Group’s debt facilities do not expire until after December 2025.
The Group’s debt facilities has a maximum leverage covenant of 3.25 times and a minimum interest cover covenant of 3.0 times.
As at 31 December 2022 the leverage ratio was 0.79 times and the interest cover ratio was 23.6 times.
(A) Capital Risk Management
The Group is focused on safeguarding its ability to continue as a going concern, so that it can provide returns for shareholders and
benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain an optimal capital structure, the Group may:
•
adjust dividends paid to shareholders;
•
•
•
return capital to shareholders;
issue new shares; or
sell assets to reduce debt.
(B) Standby arrangements and credit facilities
Entities in the Group have access to:
Loan facilities (i)
Unsecured bank loan facilities
Amount of facility utilised (ii)
Amount of available facility
Overdraft facilities
Unsecured bank overdraft facilities
Amount of credit utilised
Amount of available credit
Pertaining to the revolving cash advance facility.
(i)
(ii) Relating to bank loan and guarantees drawn (refer to note 6.3).
2022
$’000
2021
$’000
229,397
(87,853)
141,544
1,550
–
1,550
258,826
(71,648)
187,178
1,500
–
1,500
88
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
3.1 Bank Loans (Continued)
ACCOUNTING POLICY
Interest bearing liabilities are initially recognised at fair value less attributable transaction costs and subsequently measured
at amortised cost. Any difference between cost and redemption value is recognised in the income statement over the period
of the borrowing on an effective interest basis.
Costs incurred in connection with the arrangement of borrowings are deferred and amortised over the period of the
borrowing. These are shown as an asset in the balance sheet.
3.2 Cash Flow Information
Reconciliation of cash
Cash at end of the year, as shown in the statement of cash flows, comprises:
Cash at bank and on hand
23,852
257,068
The below reconciliation relates to both continued and discontinued operations.
Reconciliation of (loss)/profit for the year to net cash inflows/(outflows) from
2022
$’000
2021
$’000
operating activities:
(Loss)/Profit for the year
Depreciation and amortisation
Borrowing costs amortisation
Share of profits of associate and joint ventures
Other non-cash items
Impairment of intangible assets
Impairment reversal on associate and joint venture
Share-based payments expense
(172,990)
20,200
412
(9,691)
263
251,798
–
873
18,679
13,839
535
(9,786)
641
–
(2,019)
814
Gains on financial assets held at fair value through profit or loss
(5,292)
(17,931)
Net gain on sale of non-current assets
Fair value gains on financial assets
Changes in assets and liabilities net of effect of acquisitions and changes
in accounting policy:
(Increase)/decrease in receivables
(Increase)/decrease in prepayments
Increase/(decrease) in current tax /deferred tax liabilities
Increase/(decrease) in payables and provision for employee benefits
Net cash inflows from operating activities
(29)
(63)
(1)
–
3,644
(1,487)
(50,278)
(17,457)
19,903
(5,635)
1,953
16,437
21,122
38,648
ACCOUNTING POLICY
For the purposes of presentation on the statement of cash flows, cash and cash equivalents include cash on hand and
deposits held at call with financial institutions, net of bank overdrafts, with maturities 90 days or less.
89
Notes to the Consolidated Financial Statements
(Continued)
3.3 Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk and foreign exchange risk),
credit risk and liquidity risk.
The Group’s overall financial risk management program focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the Group. The Group uses different methods to measure different types
of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and foreign exchange risk and
ageing analysis for credit risk.
Financial risk management is carried out by the Group Treasury function under policies approved by the Board of Directors. The
policies provide principles for overall risk management, as well as covering specific areas, such as interest rate risk, foreign exchange
risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
(A) Market risk
(i) Cash flow and fair value interest rate risk
The Group is exposed to interest rate risk through its long-term borrowings issued at variable rates as well as through its cash and
cash equivalents balance. Based on the outstanding net debt as at 31 December 2022, a change in interest rates of +/- 1% per
annum with all other variables being constant would impact equity and post-tax profit by $0.4 million higher/lower.
(ii) Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities that are denominated in a
currency that is not the entity’s functional currency. Individual transactions are assessed, and forward exchange contracts are used to
hedge the risk where deemed appropriate.
While the Group has assets and liabilities in multiple currencies, individual entities in the Group do not have a significant foreign
exchange exposure to receivables or payables in currencies that are not their functional currency.
(B) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. Group credit risk principally arises from customer receivables, cash and cash equivalents, short-term deposits with banks
and financial institutions and financial guarantees (refer to note 6.3 for details).
For banks and financial institutions, the creditworthiness is assessed prior to entering into arrangements and approved by the Board.
For customer receivables, the maximum exposure to credit risk at the reporting date is the higher of the carrying value and fair value
of each receivable. Risk control involves the assessment of the credit quality, taking into account financial position, past experience
and other factors. The utilisation of credit limits is regularly monitored.
Where appropriate, the Group undertakes all of its transactions in foreign exchange contracts with financial institutions.
Impairment of financial assets – trade receivables
The Group applies the AASB 9 Financial Instruments simplified approach to measuring expected credit losses (ECL) which uses a
lifetime expected loss allowance for all trade receivables and contract assets.
To measure the ECL, trade receivables and contract assets have been grouped based on shared credit risk characteristics. The
contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the trade receivables for the
same types of contracts. The Group has therefore concluded that the ECL rates for trade receivables are a reasonable
approximation of the loss rates for the contract assets.
90
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
3.3 Financial risk management (Continued)
(B) Credit risk (Continued)
The carrying amount of receivables as at reporting date was as follows:
Note
Trade receivables
Loss allowance
Other receivables
Total receivables
The loss allowance determined for trade receivables as at 31 December 2022 and 2021 is as follows:
Opening loss allowance as at 1 January
Expected credit losses recognised/(reversed) in profit or loss
Acquisition of ARN regional
Receivables written off as uncollectible
Closing loss allowance
The aging of trade receivables that were not impaired at the end of the reporting date was as follows:
Current
Past due less than 1 month
Past due 1 to 3 months
Past due 3 to 6 months
Past due over 6 months
Trade receivables
ACCOUNTING POLICY
2022
$’000
60,895
(519)
60,376
5,278
65,654
2022
$’000
269
(18)
373
(105)
519
2022
$’000
55,984
2,858
1,435
274
344
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
60,895
48,835
Trade receivables are generally settled within 30 to 45 days and therefore classified as current. Trade receivables are
recognised initially at the amount of consideration that is unconditional unless they contain significant financing components,
when they are recognised at fair value. Due to their short-term nature, the carrying value represents fair value. The Group
holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them
subsequently at amortised cost using the effective interest method.
91
Notes to the Consolidated Financial Statements
(Continued)
3.3 Financial risk management (Continued)
(C) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through
an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the
underlying business, Group Treasury aims at maintaining flexibility in funding by keeping committed credit lines available.
Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flows. The Group has
$141.5 million in undrawn facilities at 31 December 2022, please refer to note 3.1 for more information.
The tables below analyse the Group’s financial liabilities, including interest to maturity into relevant maturity groupings based on
the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the tables are the contractual
undiscounted cash flows.
2021
Non-derivative Financial Liabilities
Payables
Bank Loans
Lease Liabilities
Total non-derivatives
Less: interest
Total financial liabilities
2022
Non-derivative Financial Liabilities
Payables
Bank Loans
Lease Liabilities
Total non-derivatives
Less: interest
Total financial liabilities
3.4 Fair Value Measurements
Note
3.1
2.3
Note
3.1
2.3
Less than
one year
$’000
Between one and
two years
$’000
Between two and
five years
$’000
Over five
years
$’000
41,461
1,139
11,157
53,757
(1,139)
52,618
–
1,139
5,774
6,913
(1,139)
5,774
–
68,584
8,617
77,201
(584)
–
–
14,785
14,785
–
76,617
14,785
Less than
one year
$’000
Between one and
two years
$’000
Between two and
five years
$’000
Over five
years
$’000
31,323
4,059
9,984
45,366
(4,059)
41,307
–
21,324
6,930
28,254
(3,324)
24,930
–
70,532
11,446
81,978
(3,532)
78,446
–
–
21,218
21,218
–
21,218
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis:
•
financial assets at fair value through profit or loss; and
•
financial assets at fair value through other comprehensive income.
Fair value hierarchy
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following fair value
measurement hierarchy:
•
level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
•
•
level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
or indirectly; and
level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
92
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
3.4 Fair Value Measurements (Continued)
(A) Recognised fair value measurements
The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair value at
31 December 2021 and 2022:
2021
Recurring fair value measurements
Financial assets
Note
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
Financial assets at fair value through profit or loss
Shares in other corporations
5.3
Total financial assets
–
–
–
–
4,196
4,196
4,196
4,196
2022
Recurring fair value measurements
Financial assets
Financial assets at fair value through profit or loss
Shares in other corporations
Total financial assets
Note
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
5.3
–
–
–
–
677
677
677
677
The Group also has a number of assets and liabilities which are not measured at fair value, but for which fair values are disclosed
in the notes. The carrying amounts of trade receivables and payables are assumed to approximate their fair values due to their
short
term nature. The fair value of bank loans approximates the carrying amount.
The level 3 inputs used by the Group are derived and evaluated as follows.
‑
The fair value of lease liabilities disclosed in note 2.3 is estimated by discounting the minimum lease payments at the Group’s
incremental borrowing rate. For the period ended 31 December 2022, the borrowing rates were determined to be between
2.3% and 6.9% per annum, depending on the type of lease.
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the
case for shares in other corporations that are measured through profit and loss. During the year a fair value gain of $5.3 million
(2021: $17.9 million) was recorded in other income for shares in other corporations relating to the disposal of the Groups remaining
investment in Lux Group Holdings for $8.8 million (refer to note 5.3 for more information). The fair value gain relating to the Group’s
remaining investment in Lux Group Limited as at 31 December 2021 was valued with reference to the sale price attained on the
partial disposal in the period ending 31 December 2021, incorporating adjustments for minority interest and marketability.
93
Notes to the Consolidated Financial Statements
(Continued)
3.5 Contributed Equity
Issued and paid up share capital
2022
$’000
2021
$’000
1,547,690
1,475,706
(A) Movements in contributed equity during the financial year
2022
Number shares
2021
Number shares
2022
$’000
2021
$’000
Balance at beginning of the year
275,154,900
278,196,267
1,475,706
1,480,752
Share issue (i)
Share buy-back (ii)
35,934,891
–
(2,009,189)
(3,041,367)
74,323
(2,339)
–
(5,046)
Balance at end of the year
309,080,602
275,154,900
1,547,690
1,475,706
(i)
Issue of ordinary shares (net of costs directly attributable) in January 2022 as consideration for the purchase of ARN Regional. Refer to note 6.1.
(ii) During 2022, the Company purchased and cancelled on-market 2.0 million shares (2021: 3.0 million). The shares were acquired at an average
price of $1.16 per share (2021: $1.66).
(B) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the
number of and amounts paid on the shares held.
On a show of hands, every holder of ordinary shares present at a meeting in person or by proxy, attorney or corporate
representative is entitled to one vote, and upon a poll each share is entitled to one vote.
ACCOUNTING POLICY
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown
in equity as a deduction, net of tax, from the proceeds.
94
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
3.6 Share-Based Payments
As at 1 January
Awarded
Exercised
Other changes
Balance at end of the year
2022
Number of
rights
788,896
107,086
2021
Number of
rights
115,955
765,802
–
(115,955)
75,930
971,912
23,094
788,896
Share rights outstanding at the end of the year have the following vesting date and weighted average fair value:
Incentive plan
2021 TIP and incentive award (1)
2022 TIP and incentive award (2)
Balance at end of the year
Vesting date
31-Dec-22
31-Dec-23
Weighted
average fair
value
$2.01
$1.95
Rights
2022
855,749
116,163
971,912
2021
788,896
–
788,896
2022
2021
Weighted average remaining contractual life of rights outstanding at end of period
0.1 year
1.0 year
(1) The date on which the fair value of the 2021 TIP rights were calculated, is the deemed grant date of the rights for accounting purposes. An
actual grant of rights was not made to the CEO & Managing Director until after shareholder approval had been received at the Annual General
Meeting, and for all other Executive KMP on 16 February 2022. 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. 66,853 additional rights were issued to satisfy this requirement.
(2) The date on which the fair value of the 2022 TIP rights were calculated, is the deemed grant date of the rights for accounting purposes. The
performance conditions were met on 31 December 2022 and approved on 15 February 2023. 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. 9,077 additional rights were issued to satisfy this requirement. This is disclosed in other changes above.
Share-based payments expense related to the above tables for the year was $872,000 (2021: $814,000).
Further information of the rights granted to Executive KMP is contained in the Remuneration Report found on pages 46 to 61 of the
Annual Report.
ACCOUNTING POLICY
Share-based compensation benefits are provided to employees via share-based payments as part of a Total Incentive
Plan (TIP) and other management incentive plans.
The fair value of rights granted is recognised as an employee benefits expense with a corresponding increase in equity.
The fair value is measured at grant date and recognised over the period during which the employee becomes unconditionally
entitled to the rights.
The fair value is derived using the closing share price on the grant date.
The fair value of the rights granted is adjusted to reflect any market vesting condition but excludes the impact of non-market
vesting conditions. Non-market vesting conditions are included in assumptions about the number of rights that are expected
to become exercisable. At each reporting date, the Group revises its estimate of the number of rights that are expected to
become exercisable.
The employee benefits expense recognised each period takes into account the most recent estimate. The impact of the
revision to the original estimates, is recognised in profit or loss with a corresponding adjustment to equity.
Notes to the Consolidated Financial Statements
(Continued)
95
3.7 Reserves and Accumulated Losses
Reserves
Foreign currency translation reserve
Share-based payments reserve
Investment revaluation reserve
Transactions with non-controlling interests reserve
Treasury shares reserve
Total reserves
Foreign currency translation reserve
Balance at beginning of the year
Net exchange difference on translation of foreign operations
Share of associates foreign exchange reserve
Balance at end of the year
Share-based payments reserve
Balance at beginning of the year
Share-based payments expense
Transfer to retained earnings
Treasury shares vested to employees
Balance at end of the year
Investment revaluation reserve
Balance at beginning of the year
Fair value adjustment on financial assets
Transfer to retained earnings
Balance at end of the year
Transactions with non-controlling interests reserve
Balance at beginning of the year
Balance at end of the year
Treasury shares reserve
Balance at beginning of the year
Acquisition of treasury shares
Treasury shares vested to employees
Balance at end of the year
2022
$’000
868
7,994
–
(53,283)
(1,604)
(46,025)
1,075
(44)
(163)
868
8,696
872
(142)
(1,432)
7,994
–
–
–
–
(53,283)
(53,283)
(1,566)
(1,470)
1,432
(1,604)
2021
$’000
*Restated
1,075
8,696
–
(53,283)
(1,566)
(45,078)
1,811
(438)
(298)
1,075
8,131
814
(68)
(181)
8,696
19,473
2,322
(21,795)
–
(53,283)
(53,283)
(1,737)
(10)
181
(1,566)
*Comparative information has been restated to reflect the change in accounting policy detailed in note 6.6.
96
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
3.7 Reserves and Accumulated Losses (Continued)
Nature and purpose of reserves
Foreign currency translation reserve
Exchange differences arising on translation of any foreign controlled entities are recognised in other comprehensive income and the
foreign currency translation reserve as described in note 6.6.
Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of performance rights issued but not yet vested as described
in note 3.6.
Investment revaluation reserve
The investment revaluation reserve is used to recognise the fair value of shares in other entities that are measured at fair value
through other comprehensive income. Refer to note 5.3 for more information.
Transactions with non-controlling interests reserve
The transactions with non-controlling interest reserve is used to record the differences described in note 5.2 which may arise as a
result of transactions with non-controlling interests that do not result in a loss of control.
Treasury shares reserve
APN News & Media Employee Share Trust (Trust), a controlled entity, was established in 2017. The Trust purchased 788,896
(2021: 6,099) additional shares in the Company during the year. 850,772 shares were issued to employees during the year
(2021: 103,919). The total shareholding in the Company as at 31 December 2022 was 904,851 shares at an average price of
$1.77 (2021: 966,727 shares at $1.62). This shareholding is disclosed as treasury shares and deducted from equity.
Performance rights that relate to the 2018 and 2019 TIP have vested and converted into shares. Unissued shares remain in the Trust.
The treasury shares reserve is used to recognise the value of shares purchased by the Trust.
Accumulated losses
Movement in accumulated losses are as follows:
Balance at beginning of the year
(Loss)/Profit attributable to owners of the parent entity
Transfer from reserves
Dividends paid to shareholders
Balance at end of the year
2022
$’000
2021
$’000
*Restated
(974,183)
(1,001,233)
(176,345)
142
(27,648)
14,862
21,863
(9,675)
(1,178,034)
(974,183)
*Comparative information has been restated to reflect the change in accounting policy detailed in note 6.6.
97
Notes to the Consolidated Financial Statements
(Continued)
3.8 Dividends
Final dividend for the year ended 31 December 2021 of 3.9 cents per share fully franked
(2020: nil cents)
Paid in cash
Interim dividend for the year ended 31 December 2022 of 5.0 cents per share fully franked
(2021: 3.5)
Paid in cash
Total dividends
Franking credit balance available as at 31 December (at 30% corporate tax rate)
Dividends not recognised at year end
2022
$’000
12,133
12,133
15,515
15,515
27,648
87,690
2021
$’000
–
–
9,675
9,675
9,675
14,729
Subsequent to year end, the Directors have declared a fully franked dividend of 5.2 cents
16,072
12,133
per share. The aggregate amount of the dividend expected to be paid on 23 March 2023
(paid from parent entity profits since 1 January 2023) but not recognised as a liability at year
end is:
98
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
4. Taxation
4.1 Income Tax and Deferred Tax
(A) Income tax
Current tax expense
Tax settlement
Deferred tax benefit
Adjustment for current tax of prior periods
Income tax (benefit)/expense
Income tax expense differs from the prima facie tax as follows:
Profit/(Loss) before income tax (benefit)/ expense
Prima facie income tax at 30%
Difference in international tax treatments and rates
Non-deductible acquisition costs
Non-deductible penalties on tax settlement
Non-deductible impairment charge
Capital losses utilised against the gain on disposal of investment in Luxury Escapes
Unrecognised tax losses/(tax losses realised)
Share of profits of associates
Adjustment for current tax of prior periods
Tax settlement
Capital losses utilised against the gain on disposal of investment in oOh!Media
Capital losses utilised against the sale of 4KQ
Other
Income tax (benefit)/expense
2022
$’000
11,967
–
(27,211)
(1,986)
(17,230)
(190,220)
(57,066)
(103)
84
–
47,031
(2,641)
(126)
(2,907)
(1,986)
–
–
(569)
1,053
2021
$’000
6,962
29,455
(8,103)
(2,082)
26,232
44,911
13,473
(243)
371
1,720
–
(4,326)
(297)
(2,936)
(2,082)
29,455
(9,341)
–
438
(17,230)
26,232
KEY JUDGEMENTS AND ESTIMATES
The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant judgement is
required in determining the provision for income taxes. There are certain transactions and calculations undertaken during the
ordinary course of business for which the ultimate tax determination is uncertain. The Group estimates its tax liabilities based
on the Group’s understanding of the tax law. Where the final tax outcome of these matters is different from the amounts that
were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in
which such determination is made.
Tax expense for 31 December 2022 is impacted by the reassessment of the deferred tax liability in relation to the sale of the
4KQ radio license, which has resulted in a decrease to the tax expense of $2.9 million.
Previously unrecognised capital losses of $3.2 million have been recognised in the period to offset deferred tax liabilities of
$3.2 million, due to the sale of 4KQ assets and Lux Group Limited shares.
99
Notes to the Consolidated Financial Statements
(Continued)
4.1 Income Tax and Deferred Tax (Continued)
(A) Income Tax (Continued)
New Zealand Branch Matter
As previously disclosed, the Company reached a binding heads of agreement on 29 October 2021 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. A deed of
settlement to formalise the binding heads of agreement was also executed on 1 February 2022.
The settlement amount of $70.7 million was made up of $56.6 million tax, $5.4 million penalties and $8.7 million interest.
The Company had already deposited $50.7 million with the ATO, and the remaining $20.0 million was paid on 1 March 2022.
The $8.7 million interest amount is deductible for income tax. Given the dispute is now completed, remitted interest previously
taken as deductions has been treated as assessable income in the tax return for the year ended 31 December 2021, the final net
interest assessable was $47.2 million (before tax).
Capital Losses
As previously noted, the New Zealand branch matter settlement agreement also recognised that 62.5% of the capital losses arising
from the disposal of the New Zealand mastheads in 2016 which may be carried forward, subject to the usual loss carry forward rules
regarding change of ownership and same business test. These capital losses totalled $345.9 million pre-tax, with 62.5% equating to
$216.2 million pre-tax.
These are subject to the usual loss carry forward rules regarding change of ownership and same business test.
Assuming various rules are met, these capital losses should be available to shelter future capital gains. No deferred tax asset is
recorded for these capital losses as they may only be utilised in the event of capital gains and it is not currently probable there will
be capital gains against which the losses will be utilised.
Other Matters: Loan Forgiveness
As previously disclosed, the Company and the ATO also settled the Loan Forgiveness matter. The ATO had indicated it would
apply the market value substitution rules to the loan forgiveness, with the tax adjustment being $5.8 million plus potential penalties
and interest.
On 22 December 2021, 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. The amount owing of $2.3 million as at
31 December 2021 was paid on 18 January 2022.
There are no other matters currently under review by the ATO.
100
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
4.1 Income Tax and Deferred Tax (Continued)
(A) Income Tax (Continued)
ACCOUNTING POLICY
AASB Interpretation 23 Uncertainty over Income Tax Treatments explains how to recognise and measure deferred and current
income tax assets and liabilities where there is uncertainty over a tax treatment. In particular, it discusses:
•
how to determine the appropriate unit of account, and that each uncertain tax treatment should be considered
separately or together as a group, depending on which approach better predicts the resolution of the uncertainty;
•
•
•
•
that the entity should assume a tax authority will examine the uncertain tax treatments and have full knowledge of all
related information, i.e. that detection risk should be ignored;
that the entity should reflect the effect of the uncertainty in its income tax accounting when it is not probable that the
tax authorities will accept the treatment;
that the impact of the uncertainty should be measured using either the most likely amount or the expected value
method, depending on which method best predicts the resolution of the uncertainty; and
that the judgements and estimates made must be reassessed whenever circumstances have changed or there is new
information that affects the judgements.
While there are no new disclosure requirements, the Group used the guidance of this Interpretation to provide information
about judgements and estimates made in relation to its existing tax in dispute matters.
Notes to the Consolidated Financial Statements
(Continued)
101
4.1 Income Tax and Deferred Tax (Continued)
(B) Deferred tax assets and liabilities
2021
*Restated
Employee benefits
Doubtful debts
Accruals/restructuring
Capital losses
Intangible assets
Depreciation
Right-of-use assets
Lease liabilities
Investments accounted for using the
equity method
Balance
1 Jan 21
$’000
1,588
150
2,258
–
(110,234)
(50)
(5,465)
7,213
(7,054)
Recognised in
profit
or loss
$’000
Recognised
in equity
$’000
Other
movements
$’000
Offset
$’000
Balance
31 Dec 21
$’000
573
(71)
38
–
–
18
862
(916)
(742)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9,341
(9,341)
2,161
79
2,296
–
(110,234)
1,421
(4,603)
6,297
(7,796)
–
–
–
–
–
9,341
(1,052)
–
–
181
(111,250)
–
1,453
–
–
–
–
–
Shares in other corporations
(8,344)
(1,054)
Other
333
53
(995)
(206)
*Comparative information has been restated to reflect the change in accounting policy detailed in note 6.6.
(119,605)
(1,239)
(1,201)
10,794
2022
Employee benefits
Doubtful debts
Accruals/restructuring
Capital losses
Balance
1 Jan 22
$’000
2,161
79
2,296
–
Recognised
in profit
or loss
$’000
Acquisition
of ARN
Regional
$’000
59
(36)
137
–
1,916
112
2,191
–
Intangible assets
(110,234)
29,007
(52,042)
Depreciation
Right-of-use assets
Lease liabilities
Investments accounted for
using the equity method
1,421
(4,603)
6,297
(7,796)
(26)
156
(426)
(274)
Shares in other corporations
(1,052)
(1,586)
(1,908)
(4,081)
3,338
–
–
Other
181
200
(149)
(111,250)
27,211
(50,623)
Recognised
in equity
$’000
Other
movements
$’000
Offset
$’000
Balance
31 Dec 22
$’000
–
–
–
–
–
–
–
–
–
–
(275)
(275)
–
–
72
3,210
2,939
(316)
–
–
–
(3)
(37)
5,865
–
–
–
(3,210)
4,136
155
4,696
–
569
(129,761)
–
–
–
–
(829)
(8,528)
9,209
(8,070)
2,641
–
–
–
(80)
(129,072)
The Group has not recognised deferred tax assets of $5.8 million (2021: $5.5 million) in respect of HK Outdoor tax losses
carried forward.
102
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
4.1 Income Tax and Deferred Tax (Continued)
(B) Deferred tax assets and liabilities (Continued)
ACCOUNTING POLICY
The income tax expense for the year is the tax payable on the current year’s taxable income based on the applicable income
tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
between the tax bases of assets and liabilities and their carrying amounts in the financial statements and also adjusted for
unused tax losses utilised in the year.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Group’s subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the
tax authorities.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets
are recovered or liabilities are settled, based on those enacted tax rates applicable to each jurisdiction. The relevant tax rates
are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset
or liability.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases
of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future. Temporary differences in relation
to indefinite life intangible assets are determined with reference to their respective capital gains tax bases in respect of assets
for which capital gains tax will apply.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset
where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and
settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised in other comprehensive income are also recognised
in other comprehensive income.
The Company and its wholly-owned Australian controlled entities are part of a tax-consolidated group under Australian
taxation law. HT&E Limited is the head entity in the tax-consolidated group. The wholly owned Australian subsidiaries
acquired as part of the acquisition of ARN Regional entered the tax consolidated group in 2022, of which the HT&E is the
head entity, in accordance with Australian taxation law. Entities within the tax-consolidated group have entered into a tax
funding arrangement and a tax sharing agreement with the head entity. Under the terms of the tax funding arrangement,
HT&E Limited and each of the other entities in the tax-consolidated group have agreed to pay (or receive) a tax equivalent
payment to (or from) the head entity, based on the current tax liability or current tax asset of the entity. Each entity in the tax-
consolidated group measures its current and deferred taxes as if it continued to be a separate taxable entity in its own right.
Judgement is required in relation to the recognition of carried forward tax losses as deferred tax assets. The Group assesses
whether there will be sufficient future taxable profits to utilise the losses based on a range of factors, including forecast
earnings and whether the unused tax losses resulted from identified causes which are unlikely to recur.
103
Notes to the Consolidated Financial Statements
(Continued)
5. Group Structure
5.1 Controlled Entities
The consolidated financial statements incorporate the assets, liabilities and results of the following controlled entities in accordance
with the accounting policy described in note 6.6.
Name of entity
5AD Broadcasting Company Pty Ltd 1
Ambersky Pty. Limited 1, 2, 4
AMI Radio Pty Limited 1, 2, 4
APN News & Media Employee Share Trust
ARN Adelaide Pty Ltd 1
ARN Brisbane Pty Ltd 1, 2
ARN Broadcasting Pty Ltd 1
ARN Communications Pty Ltd 1, 2
ARN Limited Partnership
ARN New Zealand Pty. Limited 1, 2
ARN Overseas Pty. Limited 1,2
ARN Perth Pty Limited 1
ARN Regional Pty Ltd 1, 2, 4
ARN South Australia Pty Limited 1
Australian Radio Network Pty Limited 1,2
Bass Radio Pty Limited 1, 2, 4
Biffin Pty. Limited 1, 2
Black Mountain Broadcasters Pty. Limited
Blue Mountains Broadcasters Pty Limited 1
Bluwin Pty Ltd
Brisbane FM Radio Pty Ltd
Bundaberg Broadcasters Pty. Ltd 1, 4
Bundaberg Narrowcasters Pty. Ltd. 1, 2, 4
Burnie Broadcasting Service Proprietary Limited.1, 2, 4
Buspak Advertising (Hong Kong) Limited
Cairns Broadcasters Pty Ltd 1, 2, 4
Canberra FM Radio Pty Ltd3
Capital City Broadcasters Pty. Limited 1
Catalogue Central Pty Limited 1
Cody Outdoor International (HK) Limited
Commercial Broadcasters Proprietary Limited 1, 2, 4
Commonwealth Broadcasting Corporation Pty Ltd 1, 2
Conversant Media Pty Ltd 1
Covette Investments Pty Limited 1, 2
Digi-Lution Pty Ltd 1, 2, 4
Country of
incorporation/
establishment
Equity holding
2022
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Hong Kong
Australia
Australia
Australia
Australia
Hong Kong
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
50
100
50
50
100
100
100
100
100
50
100
100
100
100
100
100
100
100
2021
%
100
–
–
100
100
100
100
100
100
100
100
100
–
100
100
–
100
50
100
–
50
–
–
–
100
–
50
100
100
100
–
100
100
100
–
104
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
Name of entity
Digital Radio Broadcasting Darwin Pty Ltd 1, 2, 4
Double T Radio Pty Ltd 1
East Coast Radio Pty. Limited 1, 2, 4
Emotive Pty Limited
Evitome Pty Limited 1
Eyre Peninsula Broadcasters Pty Ltd 1, 4
Gergdaam Capital Pty Limited 1, 2
Gulgong Pty. Limited 1, 2
Haswell Pty. Limited 1, 2
Hot 91 Pty Ltd 1, 2, 4
Hot Tomato Australia Pty Limited 1, 4
Hot Tomato Narrowcasting Pty Limited 1, 2, 4
HT&E Broadcasting (Regionals) Pty. 1, 2
HT&E Digital Pty Ltd 1
HT&E Finance Pty Limited 1, 2
HT&E International Pty Ltd 1, 2
HT&E Online (Australia) Pty Ltd 1
HT&E Operations Ltd 1, 2
Level 3 Investments Pty Limited 1
Mackay Broadcasters Pty Ltd 1, 2, 4
Melbourne F.M. Facilities Pty. Limited
North East Tasmanian Radio Broadcasters Proprietary Limited 1, 2, 4
Northern Tasmania Broadcasters Proprietary Limited 1, 2, 4
Northern Territory Broadcasters Pty Ltd 1, 4
Queensland Regional Broadcasters Pty Ltd 1, 4
Radio 96FM Perth Pty Limited 1
Radio Ballarat Pty. Ltd. 1, 2, 4
Radio Barrier Reef Pty Ltd 1, 2, 4
Radio Cairns Pty Ltd 1, 2, 4
Radio Central Victoria Pty Ltd 1, 2, 4
Radio Gladstone Pty Ltd 1, 2, 4
Radio Hunter Valley Pty. Limited 1, 2, 4
Radio Mackay Pty Ltd 1, 2, 4
Radio Murray Bridge Pty Limited 1, 2, 4
Radio Rockhampton Pty Ltd 1, 2, 4
Radio Townsville Pty Ltd 1, 2, 4
Radio West Coast Pty Ltd 1, 4
Riverland Broadcasters Pty Ltd 1, 2, 4
Country of
incorporation/
establishment
Equity holding
2022
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
51
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
50
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
2021
%
–
100
–
51
100
–
100
100
100
–
–
–
100
100
100
100
100
100
100
–
50
–
–
–
–
100
–
–
–
–
–
–
–
–
–
–
–
–
Notes to the Consolidated Financial Statements
(Continued)
Name of entity
South Coast & Tablelands Broadcasting Pty Ltd 1, 4
Southern State Broadcasters Pty. Limited 1
Speedlink Services Pty Ltd 1
Spencer Gulf Broadcasters Pty Ltd 1, 2, 4
Star Broadcasting Network Pty Ltd 1, 2, 4
Sydney FM Facilities Pty Ltd
Tasmanian Broadcasters Pty Ltd 1, 2, 4
The Hot Tomato Broadcasting Company Pty Limited 1, 2, 4
The Internet Amusements Group Pty Limited 1
The Level 3 Partnership
The Radio Sales Network Pty Ltd 1, 2, 4
The Roar Sports Media Pty Ltd 1
Tibbar Broadcasting Pty Limited 1
Wesgo 1, 2
Wilson & Horton Australia Pty Ltd 1
Wilson & Horton Finance Pty Ltd 1,2
Wollongong Broadcasters Pty. Limited 1, 2, 4
Country of
incorporation/
establishment
Equity holding
2022
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
50
100
100
100
100
100
100
100
100
100
100
100
105
2021
%
–
100
100
–
–
50
–
–
100
100
–
100
100
100
100
100
–
(1) These companies are parties to a deed of cross guarantee dated 28 April 2017 under which each company guarantees the debts of the others
(Deed of Cross Guarantee). These companies represent a Closed Group for the purposes of ASIC Corporations (Wholly-owned Companies)
Instrument 2016/785 and there are no other members of the Extended Closed Group.
(2) These wholly-owned entities have been relieved from the requirement to prepare a financial report and Directors’ report under ASIC
Corporations (Wholly-owned Companies) Instrument 2016/785.
(3) This company is proportionately consolidated and its principal activities are commercial radio. Refer to note 5.4.
(4) These companies acquired during the year entered the Assumption Deed which provides for the joining of each company to the Deed of Cross
Guarantee dated 28 April 2017.
106
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
5.2 Interests in Other Entities
(A) Material subsidiaries with non-controlling interests
Set out below are the Group’s principal subsidiaries with material non-controlling interests. Unless otherwise stated, the subsidiaries
as listed below have share capital consisting solely of ordinary shares, which are held directly by the Group, and the proportion of
ownership interests held equals to the voting rights held by the Group.
Name of entity
Brisbane FM
Radio Pty Ltd
Place of
business and country of
incorporation
Ownership interest
held by the Group
Ownership interest held
by non-controlling interests
2022
2021
2022
2021
Principal activities
Australia
50%
50%
50%
50%
Commercial radio
(B) Non-controlling interests
Set out below is summarised financial information for each subsidiary that has non-controlling interests that are material to the
Group. The amounts disclosed for each subsidiary are before inter-company eliminations.
Brisbane FM Radio Pty Ltd
Summarised balance sheet
Current assets
Current liabilities
Current net assets
Non-current assets
Non-current liabilities
Non-current net assets
Net assets
Accumulated non-controlling interests
Summarised statement of comprehensive income
Revenue
Profit for the period
Other comprehensive income
Total comprehensive income
Total comprehensive income allocated to non-controlling interests
Dividends paid to non-controlling interests
Summarised statement of cash flows
Net inflows from operating activities
Net inflows/(outflows) from investing activities
Net outflows from financing activities
Net increase in cash and cash equivalents
2022
$’000
10,841
773
10,068
67,363
44
67,319
77,387
38,694
22,366
5,845
–
5,845
2,923
2,790
6,619
–
(6,861)
(241)
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
2,684
5,835
–
(5,667)
168
107
Notes to the Consolidated Financial Statements
(Continued)
5.2 Interests in Other Entities (Continued)
(B) Non-controlling interests (Continued)
ACCOUNTING POLICY
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement,
statement of comprehensive income, balance sheet and statement of changes in equity respectively.
The effects of all transactions with non-controlling interests are recorded in equity if there is no change in control. Where
there is a loss of control, any remaining interest in the entity is remeasured to fair value and a gain or loss is recognised in
the income statement. Any losses are allocated to the non-controlling interests in subsidiaries even if the accumulated losses
should exceed the non-controlling interests in the individual subsidiary’s equity.
5.3 Shares in Other Corporations
Shares in other corporations
Note
3.4
2022
$’000
677
2021
$’000
4,196
The group disposed of its remaining investment in Lux Group Limited in the period for $8.8 million (2021: $14.4 million). The Group
recognised a gain on financial asset through profit and loss of $5.3 million (2021: $17.9 million).
The Group disposed of its investment in oOh!media Limited (OML) on 2 November 2021, which was designated as fair value
through other comprehensive income. Prior to the sale, the investment in OML was revalued to $49.2 million as at 2 November
2021, with a $2.3 million fair value gain net of tax, recognised in other comprehensive income. The sale resulted in a $21.8 million
gain net of tax previously recognised in other comprehensive income being transferred from the investment revaluation reserve to
retained earnings.
ACCOUNTING POLICY
Classification and initial measurement of financial assets
Financial assets are initially measured at fair value, plus transaction costs. This excludes those financial assets classified as at
fair value through profit or loss which are initially measured at fair value. Subsequent measurement of financial assets is at fair
value or amortised cost where certain criteria are met.
Financial assets at amortised cost and impairment
The Group’s loans and receivables (refer to note 3.3(B)) meet the requirements for measurement at amortised cost based on
the purpose for which the assets and liabilities are held and the contractual terms.
Details about the group’s impairment policies and the calculation of the loss allowance are provided in note 3.3(B).
Financial assets at fair value
The Group’s investments in equity instruments are measured at fair value, determined in the manner described in note 3.4. At
initial recognition, the Group can make an irrevocable election (on an instrument-by-instrument basis) to recognise gains and
losses on equity instruments not held for trading, in other comprehensive income. Otherwise, all gains and losses are
recognised in profit or loss.
KEY JUDGEMENTS AND ESTIMATES
The Group’s investments in equity instruments are measured at fair value, determined in the manner described in note 3.4.
These calculations require the use of assumptions. Refer to note 3.4 for details of these assumptions.
108
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
5.4 Investments Accounted for Using the Equity Method
Interests in associates
Shares in associates
Total investments accounted for using the equity method
Share of profits of associates (i)
Note
2022
$’000
33,327
33,327
9,691
2021
$’000
52,561
52,561
9,786
Set out below are the associate and joint ventures of the Group as at 31 December 2022. The entities listed below have share
capital consisting solely of ordinary shares, which are held directly by the Group. The country of incorporation is also their principal
place of business, and the proportion of ownership interest is the same as the proportion of voting rights held.
Name of entity
Place of
business/
country of
incorporation
Soprano Design Pty Limited
Australia
Nova Entertainment (Perth) Pty Ltd
Australia
Ownership
interest
Consolidated
carrying values
2022
25%
50%
2021
25%
50%
Nature of
relationship
Measurement
method
2022
$’000
2021
$’000
Associate1
Equity method
–
19,551
Associate2
Equity method
33,327
33,010
(1) Soprano Design Pty Limited specialises in the development and provision of world leading mobile messaging and wireless application
infrastructure. The interest in this business was acquired in 2001. The Group has determined that its investment in Soprano Design Pty Limited
should be held as an asset held for sale. Refer to note 6.2 for more information.
(2) On 1 March 2020, Nova Entertainment (Perth) Pty Ltd, an FM radio station in Perth, became an associate of the Group. The Group’s interest in
the entity was previously classified as an equity investment within Shares in Other Corporations
Below is a reconciliation of investments accounted for using the equity method:
Carrying amount at the beginning of the financial year
Note
Share of profit (i)
Share of reserves
Dividend paid
Reclassification of associate from financial asset
6.2
Impairment reversal/(loss)
Other
Total investments accounted for using the equity method
2022
$’000
52,561
9,691
(163)
(5,019)
(23,788)
–
45
33,327
2021
$’000
51,320
9,786
(298)
(6,599)
–
2,019
(3,667)
52,561
(i)
Included in prior year share of profits is adjustment to associate revenues by $1.3 million, offset by ($0.6) million impairment of goodwill
held by Soprano.
109
Notes to the Consolidated Financial Statements
(Continued)
5.4 Investments Accounted for Using the Equity Method (Continued)
(A) Impairment test of investment in Nova 93.7FM
A comprehensive impairment review of the Group's investment in Nova 93.7FM was conducted at 31 December 2022 with no
change to the recoverable amount.
The recoverable amount of Nova 93.7FM was estimated based on a value in use calculation, using management forecasts for a
5
year period.
‑
The cash flow assumptions are based on:
•
•
•
revenue forecasts, which consider internal information and relevant external industry data and analysis which include market
growth across the cash flow period. The revenue forecast assumes the Australian Radio market will return to historical 2019
within the forecast period and recent Nova 93.7FM market share will moderate to historical averages over the forecast period.
expense forecasts, which are prepared on a detailed basis based on their nature. Variable costs are forecasted to move in line
with revenue movements. Personnel costs are forecasted to move in line with headcount based on investment required to
maintain market share and adjusted for expected inflation. Other costs are forecasted based on management expectations,
considering existing contractual arrangements.
terminal value cash flows are extrapolated at rates not exceeding the long-term average growth rate for the industry in which
Nova 93.7FM operates.
(B) Discount rate and long-term growth rate
The discount rate (per annum) used reflect specific risks relating to the investment and the country in which it operates.
Nova 93.7FM
Dec 2022
Post-tax
discount
rate
10.25%
Dec 2022
Pre-tax
discount
rate
14.5%
Dec 2022
Long-term
growth rate
Dec 2021
Post-tax
discount
rate
Dec 2021
Pre-tax
discount
rate
Dec 2021
Long-term
growth rate
1.5%
9.0%
12.4%
1.5%
(C) Estimation uncertainty and key assumptions
At 31 December 2022, the carrying value of the Group’s investment in Nova 93.7FM equalled its value in use calculation. The
impairment calculation is therefore sensitive to changes in certain key assumptions, with any negative change giving rise to an
impairment charge.
The below illustrates how a reasonable possible change in estimate and assumptions can impact headroom. The headroom for
the Group’s investment in Nova 93.7FM would change by the following based on changes made in isolation to the key
assumptions below:
•
1.0% increase in the post-tax discount rate
•
•
1.0% reduction in the long-term growth rate
Impact of 10.0% terminal EBITDA shortfall
The carrying value of the Group’s investment in Nova 93.7FM equalled its value in use calculation. The following reasonably
possible changes in a key assumption would result in a recoverable amount lower than the carrying value to the extent shown
below:
Discount rate change
Long-term growth rate change
Terminal EBITDA shortfall
From
10.25%
1.5%
–
To
11.25%
0.5%
(10.0%)
Change to
carrying value
$'000
(3,048)
(2,167)
(2,100)
110
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
5.4 Investments Accounted for Using the Equity Method (Continued)
(C) Estimation uncertainty and key assumptions (Continued)
ACCOUNTING POLICY
Associates
Associates are all entities over which the Group has significant influence but not control or joint control. This is generally the
case where the Group holds between 20% and 50% of the voting rights.
Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting,
after initially being recognised at cost. The Group’s investment in associates includes goodwill (net of any accumulated
impairment loss) identified on acquisition.
The Group’s share of its associates’ post-acquisition profits or losses is recognised in the income statement, and its share of
post-acquisition movements in other comprehensive income of the associate, is recognised in other comprehensive income.
The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends received
from associates are recognised in the consolidated financial statements as a reduction in the carrying amount of the
investment.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other
unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on
behalf of the associate.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in
the associates.
Joint arrangements
Under AASB 11 Joint Arrangements, investments in joint arrangements are classified as either joint operations or joint
ventures depending on the contractual rights and obligations each investor has, rather than the legal structure of the joint
arrangement.
(i) Joint operations
The Group recognises its direct right to, and its share of, jointly held assets, liabilities, revenues and expenses of joint
operations.
(ii) Joint ventures
The interest in a joint venture is accounted for using the equity method after initially being recognised at cost. Under the
equity method, the Group’s share of the profits or losses of the joint venture is recognised in the income statement, and the
share of post-acquisition other comprehensive income is recognised in other comprehensive income.
When the Group’s share of losses in a joint venture equals or exceeds its interests in the joint venture (which includes any
long-term interests that, in substance, form part of the Group’s net investment in the joint venture), the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the joint venture.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest
in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred.
111
Notes to the Consolidated Financial Statements
(Continued)
5.5 Parent Entity Financial Information
(A) Summary of financial information for the parent entity
The individual financial statements for the parent entity show the following aggregate amounts:
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Total equity
Contributed equity
Reserves
2022
$’000
2021
$’000
384
290
649,203
1,044,108
4,130
522,376
126,827
41,792
830,002
214,106
1,547,690
1,475,706
Share-based payments reserve
7,994
8,697
Retained earnings
Closing profit reserve
Closing loss reserve
Total equity
Loss for the year
Total comprehensive loss
736
12,868
(1,429,593)
(1,283,165)
126,827
214,106
(130,912)
(214,579)
(130,912)
(214,579)
(B) Guarantees entered into by the parent entity
Refer to note 6.3 for details.
(C) Contingent liabilities and contractual commitments of the parent entity
The parent entity did not have any as at 31 December 2022 (2021 $4.0 million) and did not have any contractual commitments as at
31 December 2022 (2021: nil).
ACCOUNTING POLICY
The financial information for the parent entity, HT&E Limited, has been prepared on the same basis as the consolidated
financial statements, except for:
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost less impairment losses in the financial statements of the parent entity.
Dividends received from subsidiaries are recognised in the parent entity’s income statement when its right to receive the
dividend is established.
112
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
5.6 Deed of Cross Guarantee
Companies in the Closed Group are party to a deed of cross guarantee dated 28 April 2017 under which each guarantees the debts
of the others. These companies represent a Closed Group for the purposes of ASIC Corporations (Wholly-owned Companies)
Instrument 2016/785. The companies party to Deed of Cross Guarantee are detailed at note 5.1.
Set out below is the consolidated income statement and summary of movements in consolidated retained earnings for the year
ended 31 December 2022 for the Closed Group:
Revenue
Other revenue and income
2022
$’000
284,730
14,023
2021
$’000
165,072
26,563
Expenses from operations before impairment, finance costs, depreciation and amortisation
(236,447)
(138,286)
Impairment of Group company investments
(1,919)
(5,157)
Impairment of intangibles
Finance costs
Depreciation and amortisation
Share of profits of associate and joint ventures
(Loss)/Profit before income tax
Income tax benefit/(expense)
(Loss)/Profit attributable to owners of the parent entity
Accumulated losses
Balance at beginning of the year
(Loss)/Profit attributable to owners of the parent entity
Dividends paid to shareholders
Transfers between reserves
Balance at end of the year
(251,798)
(4,918)
(12,820)
9,691
(199,458)
19,776
(179,682)
–
(11,743)
(5,742)
9,786
40,493
(23,138)
17,355
(1,088,951)
(1,118,494)
(179,682)
(27,648)
142
17,355
(9,675)
21,863
(1,296,139)
(1,088,951)
113
Notes to the Consolidated Financial Statements
(Continued)
5.6 Deed of Cross Guarantee (Continued)
Set out below is the consolidated balance sheet as at 31 December 2022 for the Closed Group:
Current assets
Cash and cash equivalents
Receivables
Other current assets
Asset held for sale
Total current assets
Non-current assets
Other financial assets
Investments accounted for using the equity method
Property, plant and equipment
Right-of-use assets
Intangible assets
Other non-current assets
Total non-current assets
Total assets
Current liabilities
Payables
Contract liabilities
Lease liabilities
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Bank Loans
Lease liabilities
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total parent entity interest
Total equity
2022
$’000
2021
$’000
16,941
172,585
3,337
23,788
252,704
157,883
650
–
216,651
411,237
157,889
185,202
57,115
46,649
25,952
52,561
15,026
15,375
360,747
296,019
209
648,561
865,212
321
564,504
975,741
165,615
177,568
909
4,487
4,125
13,730
188,866
84,394
23,660
7,829
129,238
245,121
433,987
431,225
773
2,463
20,463
6,178
207,445
67,294
18,526
3,747
111,401
200,968
408,413
567,328
1,547,690
1,475,706
179,674
180,573
(1,296,139)
(1,088,951)
431,225
431,225
567,328
567,328
114
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
6. Other
6.1 Business Combinations
On 4 January 2022, the Company completed the acquisition from Grant Broadcasters of ARN Regional, comprising 46 regional
radio stations and digital operations. The purchase consideration was made up of cash of $239.1 million (net of cash acquired) and
equity of $74.4 million (fair value using closing share price on completion date).
As part of the acquisition, the Company also acquired Bluwin Pty Limited, which is a joint venture between Australian Radio
Network Pty Limited and WIN Corporation. The company has consolidated its interest in Bluwin Pty Limited and has recorded a
non-controlling interest, which has been measured based on proportionate share of net assets. The remaining entities acquired are
wholly owned subsidiaries.
Goodwill recognised through the acquisition incorporates potential synergies to the Group through increased audience reach and
scale for national advertisers. This goodwill will not be tax deductible.
Acquisition costs of $5.3 million are included in the income statement (31 December 2021: $2.0 million). The acquired business
contributed revenue of $111.5 million and net profit after tax attributable to the parent of $25.2 million to the Group for the period
to 31 December 2022.
The determined fair values of the identifiable assets and liabilities acquired are detailed overleaf.
Purchase consideration:
Cash paid
Ordinary shares issued
Total purchase consideration
The assets and liabilities recognised as a result of the acquisition:
Cash and cash equivalents
Receivables
Other assets
Right-of-use assets
Property, plant and equipment
Goodwill
Radio licences
Brands
Customer relationships
Lease liabilities
Payables
Contract liabilities
Provisions
Deferred tax liability
Current tax liabilities
Value of net identifiable assets
Non-controlling interest
Value of net identifiable asset and non-controlling interest
Net outflow of cash ‒ investing activities
2022
$’000
249,044
74,385
323,429
9,937
16,467
519
13,605
33,013
156,770
125,555
31,295
16,622
(11,126)
(6,512)
(210)
(11,146)
(50,623)
(774)
323,392
37
323,429
(239,106)
115
Notes to the Consolidated Financial Statements
(Continued)
6.1 Business Combinations (Continued)
ACCOUNTING POLICY
The acquisition method of accounting is used to account for all business combinations. The consideration transferred for the
acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred, and the equity interests
issued by the Group. Acquisition costs are expensed as incurred.
The identifiable assets acquired and liabilities assumed are measured initially at their fair values at the acquisition date.
Non
controlling interests in an acquiree are recognised either at fair value or at the non-controlling interest’s proportionate
share of the acquiree’s net assets. This decision is made on an acquisition-by-acquisition basis.
‑
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date
fair value of any previous equity interest in the acquiree over the Group’s share of the net identifiable assets acquired is
recorded as an indefinite life intangible asset.
KEY JUDGEMENTS AND ESTIMATES
Management judgement is required to determine the fair value of identifiable assets and liabilities acquired in business
combinations. A number of judgements have been made in relation to the identification of fair values attributable to separately
identifiable assets and liabilities acquired, including radio licences, customer relationships and brands. The determination of
fair values require the use of valuation techniques based on assumptions including future cash flows, revenue growth, margins,
customer attrition rates and weighted-average cost of capital.
6.2 Disposals
4KQ Sale
On 1 July 2022, HT&E completed the sale of its 4KQ Brisbane radio station and license to a subsidiary of Sports Entertainment
Group Limited (ASX: SEG) for consideration of $12.0 million. A $1.9 million impairment was recognised on the radio license on the
sale of the asset, as well as $0.4 million loss on disposal of property, plant and equipment and $0.5 million costs associated with the
sale.
Soprano Sale
On 31 December 2022, the Group signed a binding share sale agreement to sell its 25% interest in Soprano Design Limited
(Soprano) to Potentia Capital (Potentia), a leading Australian technology focused private equity firm.
Under the agreement the Group will receive approximately $66.3 million in cash as consideration for the sale of its entire interest.
The sale is conditional upon receiving FIRB approval and is expected to be completed in the first half of 2023. The Group have
determined that its interest in Soprano should be held as an asset held for sale at its carrying value of $23.8 million.
ACCOUNTING POLICY
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction
rather than through continuing use and a sale is highly probable. They are measured at the lower of their carrying amount and
fair value less costs to sell.
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is
recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative
impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset
is recognised at the date of derecognition.
Non-current assets classified as held for sale are presented separately from other assets in the balance sheet.
116
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
6.3 Contingent Liabilities
The parent entity and all wholly-owned controlled entities have provided guarantees in respect of banking facilities. As at
31 December 2022, the facilities had been drawn to the extent of $87.9 million (2021: $71.6 million), of which $2.9 million (2021:
$3.6 million) of the balance pertains to bank guarantees.
As at 31 December 2021 the Group had a contingent liability relating to the acquisition of ARN Regional from Grant Broadcasters
for $4.0 million.
The Group did not have any other contingent liabilities and unrecognised capital contractual commitments as at 31 December 2022
(2021: $ nil).
Claims
Claims for damages are made against the Group from time to time in the ordinary course of business. The Directors are not aware
of any claim that is expected to result in material costs or damages.
6.4 Remuneration of Auditors
During the year, the following fees were paid or payable for services provided by the auditor of the Group, its related practices,
non-related audit firms and other professional advisory and consulting firms:
Remuneration for audit or review of the financial reports
PricewaterhouseCoopers – Australian firm
PricewaterhouseCoopers – overseas firm
Remuneration for other assurance services
PricewaterhouseCoopers – Australian firm
PricewaterhouseCoopers – overseas firm
Total audit and other assurance services
Remuneration for other services
PricewaterhouseCoopers – Australian firm
Tax services
Consulting and advice
Compliance
Other services
PricewaterhouseCoopers – overseas firm
Tax services
Compliance
Total non-audit services
2022
$
2021
$
1,587,120
908,192
84,798
79,671
44,880
16,187
42,448
9,505
1,732,985
1,039,816
440,269
168,780
–
392,802
41,200
–
23,387
21,305
632,436
455,307
117
Notes to the Consolidated Financial Statements
(Continued)
6.5 Related Parties
(A) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total
2022
$
2021
$
2,799,035
3,330,253
131,211
64,313
821,127
97,722
25,151
716,718
3,815,686
4,169,844
Detailed remuneration disclosures are provided in the Remuneration Report.
(B) Transactions with other related parties
The aggregate amounts recognised in respect to the following types of transactions and each class of related party involved were
as follows:
Type of transaction
Class of other related party
Director fee with associate
Key management personnel (i)
Director fee with associate
Key management personnel (ii)
Property rental
Key management personnel (iii)
2022
$
–
74,577
782,289
2021
$
75,000
75,172
–
(i) Directors fees received from Soprano Design Pty Limited by HT&E for services performed by Ciaran Davis.
(ii) Directors fee received from by Belinda Rowe for services performed in relation to Soprano Design Pty Limited. For the year ending
31 December 2022 Soprano Design Pty Limited directly paid $37,671 (2021: $75,172), whilst the Group paid $36,906.
(iii) The Group paid property rental to entities associated with Alison Cameron on commercial arm’s length terms.
(C) Payables with other related parties
There was $nil payable to related parties as at 31 December 2022 (2021: $nil).
(D) Loans to related parties
There was $11.0 million in loans owing to related parties as at 31 December 2022 (2021: $11.1 million). This relates to Nova
Entertainment (Perth) Pty Ltd.
(E) Commitments with other related parties
There was $nil commitment to related parties as at 31 December 2022 (2021: $nil).
118
HT&E Annual Report 2022
Notes to the Consolidated Financial Statements
(Continued)
6.6 Other Significant Accounting Policies
Principles of consolidation – subsidiaries
The consolidated financial statements incorporate the assets and liabilities of HT&E Limited and its subsidiaries. Subsidiaries are all
entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has the rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the
entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from
the date that control ceases.
Inter-entity transactions, balances and unrealised gains on transactions between Group entities are eliminated. Accounting policies
of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement,
statement of comprehensive income, balance sheet and statement of changes in equity respectively.
Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (functional currency). The consolidated financial statements are presented in Australian
dollars, which is HT&E Limited’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss,
except when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable
to part of the net investment in a foreign operation.
(iii) Group entities
The results and financial position of all the Group entities that have a functional currency different from the presentation currency
are translated into the presentation currency as follows:
•
•
•
assets and liabilities are translated at the closing rate at the date of the balance sheet;
income and expenses are translated at average exchange rates for the year; and
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and
other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a
foreign operation is sold or a partial disposal occurs, a proportionate share of such exchange differences is recognised in the
income statement as part of the gain or loss on disposal.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign
entity and translated at the closing rate.
Trade payables
Trade payables, including accruals not yet billed, are recognised when the Group becomes obliged to make future payments as a
result of a purchase of assets or services. Trade payables are carried at amortised cost which is the fair value of the consideration to
be paid in the future for goods and services received. Trade payables are unsecured and are generally settled within 30 to 45 days.
Dividends
A payable is raised for the amount of any dividend declared, determined or publicly recommended by the Directors before or at the
end of the financial year but not distributed at balance date.
119
Notes to the Consolidated Financial Statements
(Continued)
6.6 Other Significant Accounting Policies (Continued)
Short-term incentive plans
A liability for short-term incentives is recognised in provisions when there is an expectation of settlement and at least one of the
following conditions is met:
•
•
•
there are contracted terms in the relevant plan for determining the amount of the benefit;
the amounts to be paid are determined before the time of completion of the financial report; or
past practice gives clear evidence of the amount of the obligation.
Liabilities for short-term incentives are expected to be settled within 12 months and are measured at the amounts expected to be
paid when they are settled.
New and amended standards adopted by the group
The Group adopted certain accounting standards, amendments, and interpretations, which did not result in changes in accounting
policies, amounts recognised or disclosures in the financial statements for the year ending 31 December 2022.
Standards and interpretations issued but not yet effective.
There are no standards and interpretations that are not yet effective and that are expected to have a material impact on the Group
in the current or future reporting period and on foreseeable future transactions.
Change in accounting policy
The Group has previously recognised land and building at fair value, with changes in the fair value being recognised in the asset
revaluation reserve. Following the acquisition of ARN Regional on 4 January 2022, the Group reassessed its accounting policy and
determined that the historical cost basis of accounting would provide more relevant and reliable information. Consequently, the
Group changed its accounting policy to historical cost in the period.
Land and buildings will be measured at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Subsequent costs are included in the assets carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the
financial period in which they are incurred.
The change in policy has been applied retrospectively and comparative information has been restated. This has the following impact
on the amounts recognised in the financial statements;
Property Plant and Equipment
Asset Revaluation Reserve
Depreciation and amortisation
Opening retained earnings
Deferred tax liability
6.7 Subsequent Events
Dec 2021
$’000
(2,599)
(2,402)
(32)
124
(353)
Jan 2021
$’000
(2,631)
(2,402)
–
124
(353)
Subsequent to the end of the financial year, the Directors have declared the payment of a fully franked dividend of 5.2 cents
per ordinary share. This dividend is paid from parent entity profits since 1 January 2023. This dividend is payable on 23 March 2023.
The Directors are not aware of any matter or circumstance that has arisen since the end of the financial year that has significantly
affected or may significantly affect the Group’s operations, the results of those operations or the Group’s state of affairs in future
financial years.
120
HT&E Annual Report 2022
Directors’ Declaration
In the Directors’ opinion:
(a)
the financial statements and notes set out on pages 63 to 119 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2022 and of its performance
for the financial year ended on that date; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and
payable; and
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group
identified in note 5.1 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of
the deed of cross guarantee described in note 5.6.
Page 63 of the Annual Report confirms that the financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
This declaration is made in accordance with a resolution of the Directors, after receiving the declarations required to be made by
the Chief Executive and Chief Financial Officer in accordance with section 295A of the Corporations Act 2001.
Hamish McLennan
Chairman
Sydney
21 February 2023
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 2022 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 2022
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, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999
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
Liability limited by a scheme approved under Professional Standards Legislation.
122
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 $2,800,000, which represents
approximately 5% of the Group's statutory profit before tax adjusted to exclude the impairment of intangible
assets.
● 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 adjusted to exclude the impairment of the intangible asset to
reflect the underlying performance of the group.
● 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.
123
-
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 auditor”) of Nova Entertainment (Perth) Pty Limited
operating under our instructions, we determined the level of involvement we needed to have in the audit work
at this location to be satisfied that sufficient audit evidence had been obtained. We communicated regularly
with the component audit team 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)
We performed the following procedures, amongst
others:
The Group continues to hold significant indefinite lived
intangible assets in the Australia Radio Network (ARN)
cash generating unit (CGU) totalling $420.2 million.
As required by Australian Accounting Standards, at 31
December 2022 the Group performed an impairment
assessment over the indefinite lived intangible asset
balances by calculating the recoverable amount for the
ARN CGU, using a discounted cash flow model (the
model) prepared on a value in use basis. As a result
the Group recognised an impairment charge of $249.9
million to goodwill and intangible assets.
The carrying value of goodwill and other indefinite lived
intangible assets relating to the ARN CGU and related
impairment charge was determined to be a key audit
matter due to:
●
●
the magnitude of the goodwill and indefinite
lived intangible asset balance and the
impairment charge recorded during the year
the degree of judgement required by the
Group in estimating the key assumptions in
the valuation models, including forecast
performance, growth rates and discount rates.
●
●
●
●
●
assessed whether the division of the Group’s
assets into cash generating units (CGUs),
which are the smallest identifiable groups of
assets that can generate largely independent
cash inflows, was consistent with our
knowledge of the Group’s operations and
internal Group reporting
considered the market capitalisation of the
Group in comparison to the carrying value of
its net assets and adjusted equity value with
the assistance of our valuation specialists
considered whether the model used to
estimate the recoverable amount of the assets
was consistent with the requirements of the
Australian Accounting Standards
tested the mathematical accuracy, on a
sample basis, of the model’s calculations
assessed the appropriateness of the key
assumptions within the model compared to
observable market information where
available, historical results, industry forecasts,
and considered management’s ability to carry
out courses of action
124
Key audit matter
How our audit addressed the key audit matter
●
●
●
●
●
compared the forecast cash flows used in the
model to the Board of directors’ approved
budget
evaluated the Group’s historical ability to
forecast future cash flows by comparing
budgets with reported actual results
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 sensitivity of changes in key
assumptions incorporated in the model
evaluated the reasonableness of the
disclosures made in note 2.1, including those
regarding the key assumptions and
sensitivities to changes in such assumptions,
in light of the requirements of Australian
Accounting Standards.
Business combinations - ARN Regional
(Refer to note 6.1)
The Group acquired ARN regional comprising 46
regional radio stations and digital operations from
Grant Broadcasters for total consideration of $323.4
million, as described in note 6.1. The purchase
consideration was in the form of the Group’s shares of
$74.4 million and cash of $249 million. The acquired
radio licences were valued at $125.6 million and
goodwill of $156.8 million was recognised on
acquisition.
The accounting for the acquisition was a key audit
matter due to:
●
●
it being a significant transaction for the year given
the financial and operational impacts on the
Group.
the complexity and judgments required by the
Group in determining the fair value of assets and
liabilities recognised on the opening balance
sheet, in particular the Radio licences, Customer
relationships and Brand.
Assisted by PwC valuation experts, our procedures
included the following, amongst others:
●
evaluating the Group’s accounting against the
requirements of Australian Accounting Standards,
through reviewing key transaction agreements,
using our understanding of the business acquired
and its industry, and inspecting minutes of the
Board of directors’ meetings,
agreeing the cash consideration paid and shares
issued to supporting documentation including bank
statements, share issuance documents and the
key transaction agreements,
assessing the fair values of the acquired assets
and liabilities recognised, including:
●
●
o
o
o
considering the valuation methodology in
the models in light of the requirements of
Australian Accounting Standards
considering key assumptions used in the
models that estimated fair value in light of
historical performance and available
market data
assessing the competence and capability
of management’s expert
125
Key audit matter
How our audit addressed the key audit matter
●
considering the adequacy of the business
combination disclosures 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 2022, 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:
126
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 46 to 61 of the directors’ report for the
year ended 31 December 2022.
In our opinion, the remuneration report of HT&E Limited for the year ended 31 December 2022
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
21 February 2023
127
Shareholder Information
(Continued)
1. Shares
(A) Substantial shareholders
The following information is extracted from substantial shareholder notices received by the Company as at 23 January 2023:
Name
Allan Gray (Orbis)
News Limited (claims News + Citigroup position)
Spheria Asset Management Pty Ltd
Perpetual Limited
Carol Australia Holdings Pty Ltd
Grant Broadcasters Pty Ltd
(B) Top 20 holders of fully paid ordinary shares
The following information is extracted from the share register as at 16 February 2023:
Name
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NEWS PTY LIMITED
GRANT BROADCASTERS PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
FIRST SAMUEL LTD ACN 086243567
BNP PARIBAS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
PACIFIC CUSTODIANS PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
UBS NOMINEES PTY LTD
PACIFIC CUSTODIANS PTY LIMITED
BISHOP FAMILY COMPANY PTY LTD
SLING SUPER PTY LTD
BNP PARIBAS NOMINEES PTY LTD
GPDCM SUPERANNUATION PTY LTD
AUSTRALIAN EXECUTOR TRUSTEES LIMITED
MR HENRY YOMAN & MRS VIRLINA YOMAN
Total
Number
of shares
62,165,031
40,803,132
27,432,356
41,182,418
15,741,965
35,934,891
% of
total shares
24.68
24.03
13.20
11.63
7.92
4.58
2.87
1.18
0.91
0.87
0.66
0.42
0.35
0.26
0.23
0.14
0.12
0.10
0.09
0.08
Number
of shares
76,285,488
74,279,330
40,803,132
35,934,891
24,468,012
14,160,883
8,863,211
3,654,641
2,814,561
2,687,300
2,049,494
1,312,356
1,095,231
788,896
710,000
420,000
375,262
303,785
268,348
248,062
291,522,883
94.32
1
Pacific Custodians Pty Limited is the registered legal holder for shares held in trust belonging to Directors as part of the treasury incentive plan.
As noted in the Directors’ interests, Ciaran Davis holds 1,329,403, of which 1,257,530 is held in Pacific Custodians Pty Limited HT1 Plans ctrl a/c.
128
HT&E Annual Report 2022
Shareholder Information
(Continued)
(C) Analysis of individual ordinary shareholdings as at 16 February 2023:
Holding
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Number of
shareholders
3,862
979
278
328
36
% of total
shareholders
70.44
17.86
5.07
5.98
0.66
5,483
100.00
Number
of shares
976,925
2,356,420
2,104,461
9,718,882
293,923,914
309,080,602
% of
total shares
0.32
0.76
0.68
3.14
95.10
100
There were 2,936 holders of less than a marketable parcel.
(D) Voting rights of shareholders
The voting rights are governed by rule 16 of the Constitution. In summary, shareholders are entitled to vote in person or by proxy,
attorney or corporate representative at any meeting of shareholders of the Company on:
•
a show of hands – one vote per shareholder; and
•
a poll – one vote per share.
2. Unquoted Securities
There were 904,851 performance rights on issue at 31 December 2022 (2021: 966,727)
3. Directors’ Interests
The relevant interest of each Director in the securities of the parent entity as at 13 February 2023 was:
Director
H McLennan
R Amos
P Connolly
C Davis (ii)
B Rowe
A Cameron (i)
Number
of shares
73,000
16,250
65,935
1,329,403
–
35,934,891
Number
of options
–
–
–
–
–
–
(i) 35,934,891 Ordinary Shares held by Grant Broadcasters Pty Ltd. Alison Cameron holds, directly and indirectly, less than 0.005% of the issued
capital in Grant Broadcasters. Janet Cameron, Alison’s mother, holds 99.9% of the issued capital in Grant Broadcasters.
(ii) Pacific Custodians Pty Limited is the registered legal holder for shares held in trust belonging to Directors as part of the treasury incentive plan.
As noted in the Directors’ interests, Ciaran Davis holds 1,329,403, of which 1,257,530 is held in Pacific Custodians Pty Limited HT1 Plans ctrl a/c.
129
Shareholder Information
(Continued)
4. Other Information
Stock exchange listing
HT&E shares are listed on the ASX (code HT1).
Enquiries
Shareholders or investors with any enquiries concerning their shareholding, shareholder details, dividend information, or
administrative matters, should direct their enquiries to the Share Registry. Contact details for the Share Registry appear on the
Corporate Directory page in this Annual Report 2022.
Dividend payments
Dividends to shareholders may be paid direct to any bank, building society or credit union account in Australia. Shareholders who
wish to receive dividends by electronic transfer should advise the Share Registry.
Tax file number (TFN)
The Company is obliged to deduct tax from unfranked or partially franked dividend payments to shareholders resident in Australia
who have not supplied their TFN to the Share Registry. To avoid this deduction, you should advise the Share Registry of your TFN.
Register your email address
Shareholders are encouraged to register their email address to receive dividend advices, notification of availability of annual
reports, notices of meeting, access to online voting and other shareholder communications. To register, shareholders should go
to www.linkmarketservices.com.au, log in to their shareholding through the Investor Centre and select the “All communication by
email” option.
Other services available to shareholders at this website include: viewing details of their shareholdings, updating address details,
updating bank details and obtaining a variety of registry forms.
Consolidation of holdings
Shareholders who have multiple issuer-sponsored holdings and wish to consolidate their separate shareholdings into one account
should advise the Share Registry in writing.
Change of name or address
Shareholders who are issuer sponsored should notify the Share Registry in writing of any change in either their name or registered
address. If a change of name has occurred, it will be necessary to supply a certified copy of the relevant deed poll or marriage
certificate. Shareholders sponsored by a broker (CHESS) should advise their broker of the amended details.
Dividend Reinvestment Plan (DRP)
The Directors determined to suspend the DRP effective from 15 February 2018.
Shareholders may elect to participate in any future DRP for all or part of their shareholding. Shareholders wishing to participate in
any future DRP should contact the Share Registry. Terms and conditions of the DRP, the DRP Guide and forms to apply for, vary or
cancel participation in the DRP are also available on the Company’s website, www.htande.com.au.
Investor information
The Annual Report is the most comprehensive publication with information for investors. Copies of the 2021 Annual Report may be
obtained by contacting the Share Registry or on the Company’s website, www.htande.com.au. Other financial and relevant
information, including press releases on financial results and Chairman’s addresses, are available from the corporate office in
Sydney, or at the Company’s website, www.htande.
Corporate Directory
HT&E LIMITED
ABN 95 008 637 643
Directors
Hamish McLennan (Chairman)
Ciaran Davis (CEO & Managing Director)
Roger Amos
Alison Cameron
Paul Connolly
Belinda Rowe
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
Commonwealth Bank of Australia
HSBC
National Australia Bank
Westpac Banking Corporation
Annual General Meeting
Notice is given that the Annual General Meeting (AGM)
of HT&E Limited will be held on Wednesday 17 May 2023
commencing at 9:00am.
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.