Annual Report
2023
All
Audio
1
In this report
02 About
06 Delivering our strategy
08 Chairman’s letter
10 CEO’s letter
12 Operating and Financial Review
16 Review of Operations
22 2023 awards
24 Environmental, Social and
Governance: InTune @ARN
InTune with Our Communities
26
30
InTune with Our Team
32
InTune with Our Living Planet
34
InTune with Best Practice
36 Board of Directors
38 Senior Management Team
40 Directors’ Report and
Financial Report
46 Remuneration Report
62
Auditor’s Independence Declaration
63 Consolidated Financial Statements
117 Directors’ Declaration
118 Independent Auditor’s Report
123 Shareholder Information
126 Corporate Directory
1. GfK Metro S8 2023, GfK GC/Canb/New
S3 2023, Xtra Insights Latest Surveys,
Cumulative Reach, Mon–Sun 12am–12am,
p10+, represented stations.
2. Triton Australian Podcast Ranker, Sales
Representation Audience, monthly average
Jan–Dec23 (vs Jan–Dec22).
3. iHeartRadio Australia, Registration Data,
Lifetime Users, as at Dec 2023.
4. GfK Metro S1–8 2023, SMBAP, AM/FM/
DAB+, Mon–Sun, 0530–2359, Cume, p10+
(vs S1–8 2022).
2023 demonstrates the continued
strength of our core audio assets.
#1
#1
Metro Radio Network4
6.2m
(4.4% YoY increase and highest
annual cume average)5
Podcast Publisher2
6.8m
(+26.8% audience growth YoY and
highest annual audience average)6
Will & Woody – KIIS Network Drive
is All Audio
ARN Media owns Australia’s leading audio
company, ARN, connecting with over 8 million people1
each week through broadcast and digital radio across
every state and territory in Australia. ARN owns 58 radio
stations across 33 markets, plus 46 DAB+ stations nationwide.
We also reach almost 7 million people each month2 through
the fastest growing audio format, podcasts. ARN maintains
a long-term licence to operate digital entertainment platform,
iHeartRadio delivering radio, music, and podcasts to over
2.6 million registered users3.
Our vision is to provide the most complete audience experience
for listeners, and the most comprehensive audio solutions for
advertisers, through:
Generating strong returns from core broadcast radio assets
Distributing content as widely as possible
Investing in new digital audio formats
Building an integrated audio business, and
Embracing digital transformation and AI innovation.
ARN Media Annual Report 2023 2
About
ARN Media Annual Report 2023
3
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
our hyper-localised approach to
content, acting as a pillar of the
communities we broadcast in.
ARN creates quality connections between
content, audiences and advertisers.
We are focused on creating the content
people seek, delivering it in the format they
want and enabling access to those audiences
for our advertisers.
Innovation
Enabling access to our audience through effective
all-of-audio solutions and partnerships.
A creative agency devising 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.
Distribution
Everywhere our listeners are connecting Broadcast Radio, DAB+
and Digital Streaming.
ARN Media Annual Report 2023 4
4
ARN Media Annual Report 2023
5
5
Connected with over 8 million
Australians every week
Whether it’s entertaining, informative,
or educational we’re generating
audio content 24/7 to connect with
audiences across every state and
territory in Australia.
At ARN we connect over 8 million people1 to their communities each
week through unparalled live and local content. We enrich 6.8 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 2.6 million people3 have registered
on iHeartRadio to date.
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.
Radio audience nationally
(weekly)1
Digital websites reach
(monthly)4
Streaming listening hours5
over 8m
1.2m
115m
ARN
Regional
Stations6
#1
Hot Tomato
on 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
7HO FM
in Hobart
1. GfK Metro S8 2023, GfK GC/Canb/New S3 2023, Xtra Insights Latest
Surveys, Cumulative Reach, Mon–Sun 12am–12am, p10+, represented
stations.
2. Triton Australian Podcast Ranker, Publisher Audience, monthly average
Jan–Dec 2023.
3. iHeartRadio Australia, Registration Data, Lifetime Users, as at Dec 2023.
4. Google Analytics – ARN Web Assets – Jan–Dec23 average.
5. Triton and AdsWizz/StreamGuys, Total Radio Streaming, Total Listening
Hours Jan–Dec 2023 (vs Jan–Dec 2022).
6. GfK Gold Coast, S3 2023, Share, Mon–Sun 0530–2359, p10+; Xtra Insight
(Bundaberg S1–23, Darwin S1–21, Cairns S1–23, Gympie S1–22, Ballarat
S1–21, Ipswich S1–21, Launceston S1–21, Hobart S1–23), Share, Mon–Sun
12am–12am, p10+.
7. GfK Metro S1–8 2023, SMBAP, AM/FM/DAB+, Mon–Sun, 0530–2359,
Share P10+ unless stated otherwise.
8. GfK S1–8 2023, Sydney, FM Stations, Mon–Fri, 0530–0900, Share, p10+.
9. GfK S1–8 2023, Melbourne, FM Stations, Mon–Fri, 0530–0900, Share,
p10+.
#1Metro
Network7
6.2m
Best ever cume7
4.4%
YoY growth in cume
#1 FM
Melbourne
Breakfast9
for GOLD 104.3’s
Christian O’Connell
26
of the last
29 surveys
#1 FM
Sydney
Breakfast8
for KIIS 1065’s
Kyle & Jackie O
40
in a row
ARN Media Annual Report 2023 6
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.
Against a backdrop of tough economic
conditions our focus in 2023 was
strengthening the business from the
core, while building the foundations to
create further value for our shareholders.
We firmly believe ARN is the most
well-run audio business in Australia
and with the integration of the Regional
Network now complete, we are well
positioned to identify and deliver
further efficiencies across the breadth
of our operations.
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.
Audio
Innovation
Dynamic
Audio
DAB+
Streaming
Digital
Podcasts
ARN’s Audiosphere delivers the most
complete audio solutions in Australia
1. GfK Metro S1–8 2023, SMBAP, AM/FM/DAB+, Mon–Sun, 0530–2359,
4. GfK Metro S1–8 2023, SMBAP, AM/FM, Mon–Sun, 0530–2359,
Cume, p10+ (vs S1–8 2022).
Share, p10+.
2. Triton Australian Podcast Ranker, Sales Representation Downloads,
5. Triton and AdsWizz/StreamGuys, Total Radio Streaming, Total Listening
Total Jan–Dec23 (vs Jan–Dec22).
Hours Jan–Dec 2023 (vs Jan–Dec 2022).
3. Xtra Insights Latest Surveys, Cumulative Reach,
6. iHeartRadio Australia, Registration Data, Lifetime Users, as at Dec 2023.
Mon–Sun 12am–12am, p10+.
In 2023 we grew
total audiences
even further
Our strategic focus areas
Scale of audiences
343m
18.3% YoY
Podcast downloads
6.2m
4.4% YoY
Metro Network1
1.9m #1
Regional Network3
0.1% YoY
National share
ex DAB+ 17.4%4
115m
Total streaming
radio listening hours
Increasing digital data and targeting capabilities
Continual improvement of data housing, management and accessibility has enabled for better data
usage and performance monitoring to deliver a more robust total targeting solution for our clients.
Registered users (lifetime)3
Total addressable audience
2.6m
2023
2022
10%
$2.4m
60%
Solution based selling
Relentless optimisation of our commercial offering and suite of ‘All Audio’ marketing products, allowed for increased depth of
market engagaement and incremental revenue opportunities from new and existing clients.
ARN digital revenue
ARN total revenue
$19.8m
36% YoY
$307.0m
2% YoY
7
2023
2022
Events &
Experiences
Audio
Branding
Radio
ARN listenership (surveyed stations)1
We continued to grow our audience across broadcast radio, digital audio streaming and podcasting
though a considered content strategy that delivers Australia’s most popular content from world
class talent, coupled with a distribution strategy that delivers content everywhere audiences seek it.
ARN Media Annual Report 2023 8
8
ARN Media Annual Report 2023
9
9
ARN Media understands the sector and
the potential for value creation through
the proposed acquisition of SCA by the
ARN Media and Anchorage Consortium.
We remain confident that the Indicative
Proposal to acquire SCA represents a
compelling value proposition for both
ARN Media and SCA.
However, shareholders should note
that no binding agreement to implement
the Indicative Proposal has been
reached with SCA at this time and
there is no certainty that a transaction
will eventuate.
There is no doubt that there will be
further media market consolidation in
Australia, and we will continue to explore
appropriate opportunities as they arise.
We welcome the recent investment
in ARN Media by Seven West Media,
acquiring a 20% stake in November.
Seven West Media is supportive of our
proposal to acquire SCA.
Finally, I would like to thank our
people, clients, and shareholders for
supporting us.
Hamish McLennan
Chairman
Chairman’s letter 2023
I am pleased to report that 2023 has
been a year of significant achievement
for ARN Media despite challenging
economic conditions.
The Board believes there is enhanced
future growth potential and an
accelerated path to profitability through
a proposed digital audio joint venture
of greater scale, allowing ARN Media to
compete more effectively with global
digital platforms.
Under the Indicative Proposal, SCA
shareholders would receive 0.753 ARN
Media shares and 29.6 cents cash per
SCA share. The Consortium remains
open to working with SCA to structure
the cash component of consideration as
a pre-completion fully franked special
dividend, which is expected to provide
access to additional value of 12.7 cents
per SCA share from franking credits for
eligible existing SCA shareholders.
Major talent contracts
A core pillar of ARN Media’s strategy
has been to invest in the best and
most trusted radio and audio
on-air talent in Australia to cement our
leadership position. In November we
announced that we had extended the
contracts of our two top rating Breakfast
shows in Sydney and Melbourne for
significant periods.
KIIS 1065’s Kyle and Jackie O were
secured until 31 December 2034,
which is another ten years on top of
their existing arrangements. The Kyle
and Jackie O Show will also broadcast
live into Melbourne on KIIS 101.1
commencing in 2024 on a date to
be confirmed.
GOLD 104.3’s Christian O’Connell has
been secured until 31 December 2029,
another five years on top of his existing
arrangement.
The new multi-layered contracts are
designed to create full alignment with
ARN Media’s objectives, incentivising
and rewarding superior performance.
The contracts include base fees, revenue
share on incremental growth, sign-on
bonuses and shares in ARN Media.
ARN Media Limited (ARN Media)
delivered a strong operational
performance in a highly competitive
market against a backdrop of
reduced consumer spend, a slowing
economy and a reduction in
government advertising spend, which
impacted revenues.
Our focus in 2023 has been
strengthening the business from the
core, while building foundations to
create more value for our shareholders.
Importantly, shareholders approved
the Company’s name change from
HT&E Limited to ARN Media Limited,
reflecting our ambition to build the most
valuable audio entertainment business
in Australia.
As part of our strategy, in June ARN
Media acquired a 14.8% stake in
Southern Cross Media Group Limited
(SCA), spending $38.3 million to
acquire the equity interest, believing
it represented attractive value for
shareholders. Subsequently in October
2023 ARN Media and Anchorage Capital
Partners formed a consortium to make
a non-binding indicative proposal
to acquire SCA through a scheme of
arrangement.
For both ARN Media and SCA
shareholders, the proposed transaction
would create a focused metro radio
network of 10 stations across Sydney,
Melbourne, Brisbane, Adelaide and
Perth, anchored by the KIIS and Triple
M brands in each of these locations and
with differentiated, nationally and locally
relevant talent.
It would also create a larger, growing
and profitable regional radio footprint
of 88 stations, up from 47 today, plus
full ownership of ARN Media’s two
existing stations in Canberra, delivering
a more compelling regional network for
advertisers and communities.
Additionally, there is the opportunity to
benefit from cost and other efficiencies
resulting from combining retained
and acquired radio stations, under
the management of ARN Media’s
well regarded and cost focussed
management team.
The current audience ratings bonus
structure is to be replaced, with the new
structure designed to reward ratings
success, only if incremental annual
station revenue growth is achieved.
The total base fee increases under these
new contract arrangements, which take
effect from January 2025, will be offset
by lower content costs resulting in part
from the live broadcast of the Kyle and
Jackie O Show into Melbourne, and
will be limited to a net total increase of
approximately $2–3 million per annum.
This long term, significant investment
in our key talent is equivalent to other
media companies investment in sports
rights which bring the certainty of
audiences, commercial sponsors and
provide the best prospect of delivering
long-term value for shareholders. We
are confident it will deliver increased
revenue and improved shareholder
returns over the medium term.
Strong balance sheet
ARN Media has one of the strongest
balance sheets in Australian media
today with net debt of $75.1 million
and leverage of 1.26 times EBITDA.
The strategic investment in SCA in
June was funded from the $66.3 million
received from the sale of our
25% interest in Soprano Design Pty
Limited in March 2023, with additional
monies used to pay down debt.
The Group’s financing facilities have
stable tenure and sustained undrawn
limits remaining as we continue to be
focused on capital management.
Group operating costs were limited to
+2% in the period with key integration
projects implemented and completed.
The share buyback was paused following
the announcement of the proposal to
acquire SCA.
The Board remains committed to
maintaining strong dividends for
shareholders thanks to the high cash
generating nature of the business.
Board Changes
Brent Cubis was appointed to the Board
following the resignation of Roger Amos.
Brent is a strong addition to the Board
with more than 30 years of experience
in public and private companies across
a broad range of industries including
media, medical devices, health and
property. Brent was also appointed
Chair of ARN Media’s Audit and
Risk Committee.
With this appointment, we have the right
mix of skills to navigate the opportunities
and market conditions we see today.
I would like to thank Roger for his
valuable contribution to the Board over
the last five years. We have benefited
enormously from his wisdom and his
pivotal role as Chairman of the Audit and
Risk Committee in the settling of ARN
Media’s long running tax dispute with
the ATO.
The year ahead
Looking ahead ARN Media faces
the ongoing challenge of uncertain
advertising markets.
We are well placed to navigate the
year ahead and firmly believe ARN is
the most well-run audio business in
Australia. With the integration of the
Regional Network now complete, we
are now well positioned to identify and
deliver further efficiencies across the
breadth of our operations.
“ Our focus in 2023 has
been strengthening the
business from the core,
while building foundations
to create more value for
our shareholders.”
ARN Media Annual Report 2023 10
10
ARN Media Annual Report 2023
11
11
CEO’s letter 2023
ARN Media delivered a strong operating
performance in 2023 as we remained focused
on delivering our ‘All Audio’ strategy.
Local advertising markets presented
ongoing challenges stemming from
macro-economic conditions, and total
ARN revenues of $307.0 million were
down 2% on the prior period, and
EBITDA of $72.2 million, was down 17%.
Our focus on building an integrated
audio business by leveraging the
strength of our metro, regional and
digital audio assets saw us performing
well in key audience metrics across
all markets.
Strength in radio audiences
and ratings
ARN was the #1 metropolitan radio
network in Australia on an annualised
basis again, and we recorded our best
ratings results with our highest ever
cumulative audience, reaching over
6.2 million people a week.
Across our metropolitan network, overall
listeners increased by 4% year on year.
ARN continues to lead key metropolitan
markets with #1FM stations in the
two largest markets of Sydney and
Melbourne. In Melbourne, Gold 104.3
is #1FM in 2023 for Breakfast, Morning,
Afternoon and Drive, led by The
Christian O’Connell Show who has been
#1FM for almost every survey since 2020.
ARN is a major force in regional radio,
with 47 regional stations across Australia
serving as key pillars of the communities
they broadcast in.
With our ownership of Australia’s leading
broadcast and on-demand audio
companies, we now connect with over
8 million people each week across every
state and territory in Australia, through
broadcast and digital radio.
In total, we have 58 radio stations across
33 markets, plus 46 DAB+ stations
nationwide and maintain a long term
licence to operate digital entertainment
platform, iHeartRadio, which has now
accrued 2.6 million registrations. We
reach almost 7 million people each
month through podcasts on iHeart.
Metropolitan commercial radio
audiences continue to grow with an
additional 282,000 people listening in
2023 compared to 2022.
This means that 82% of the metro
population aged 10 years and older
listened to radio in the past seven
days. And they are listening for longer,
with industry surveys in 2023 showing
people listened for more than 13 hours
per week, an increase of 2% compared
to 2022.
Digital audio performance
& path to breakeven
Digital revenues grew 36%
to $19.8 million, and EBITDA loss
narrowed to $8.8m in 2023 reflecting
the increased appetite amongst
Australians to consume podcasts and
stream live radio on digital devices.
Of critical importance is our strategy to
continue attracting new listeners to the
iHeart platform through highly sought
after and reputable content.
ARN benefits from our unique,
long-term partnership with iHeartMedia
to license the iHeart digital audio
platform in Australia. This gives us access
to an unrivalled slate of premium podcast
content, international radio stations and
an exhaustive library of curated playlists.
This low capital expenditure investment
model has allowed us to focus on
delivering a cashflow breakeven run rate
by December 2024.
Podcast listening has now reached mass
appeal with significant increases in both
weekly (+26.8%) and monthly (+7%)
listening across 2023. During the year,
43% of Australians listened to podcasts
each month with 74% of those listeners
choosing to listen to ARN’s iHeartPodcast
Network. Podcast listeners are deeply
engaged, listening to an average of five
episodes per week.
We continue to be the No 1 Podcast
publisher, with 6.8 million listeners, +27%
audience growth year on year and our
highest annual audience average to date.
Continued optimisation of our
product offering and Commercial
team composition and structure,
allowed for increased depth of market
engagement. With a backdrop of
challenging macro-economic conditions,
we were able to uncover incremental
revenue opportunities from new and
existing clients.
Regional integration
complete & synergies
On 4th January 2022, ARN Media
Limited (ARN Media) completed the
acquisition of ARN Regional from Grant
Broadcasters, growing the network to
over 8 million listeners across every state
and territory in the country. During that
year we focused on the first phase of
integration, hitting all milestones and
realising revenue synergy targets.
In 2023 we continued to prioritise
the critically important connection to
community through investing in local
teams, local content and improving
infrastructure.
Two years on from acquiring the regional
radio network and within our integration
timeline, we are pleased to confirm that
the business is now fully integrated,
with singular inventory, revenue and
finance systems.
Our goal to deliver revenue synergies
of up to $20 million per annum within
the first three years following the
acquisition of the regional business was
impacted by reduced national agency
advertiser budgets and considerably
lower government spend following the
Federal Election in 2022. Excluding
the impact of reduced government
spend, we have delivered approximately
$8 million annual incremental revenues
after two years.
We remain confident in delivering further
incremental revenues in 2024.
Cost management a
key priority
ARN Media commenced a two-year
program of work in 2023 to simplify
the business, focusing on reducing
complexity, prioritising higher yield
activities and extracting maximum value
from our content.
Permanent annualised savings of more
than $10 million have been identified
over two years, with $6.5 million to be
realised in 2024.
Incorporating an additional
$3–$4 million marketing investment
to support the launch of the Kyle &
Jackie O Show into Melbourne, and with
the benefit of the cost out program,
total ARN Audio people and operating
costs are expected to grow by 2–4%
versus 2023.
We are also optimistic that we can
progress our Indicative Proposal to
acquire SCA with our consortium
partner, Anchorage Capital Partners.
The rationale for the proposal is very
compelling as we see a significant
value creation opportunity by bringing
together certain ARN Media and SCA
radio and digital audio assets.
Finally, I would like to thank all of our
people, our strong management team,
the Board and our shareholders and
look forward to working with all of you
in 2024.
Ciaran Davis
CEO & Managing Director
Under new arrangements Kyle &
Jackie O will commence broadcasting
live into the Melbourne market from
2024 supported by launch partner,
Chemist Warehouse. As the world’s
most successful radio show we are very
confident broadening its reach into
Melbourne will attract new audiences
and expand commercial opportunities
given Melbourne is the largest radio
advertising market in Australia.
ARN’s differentiator remains our
obsession with the powerful connection
that our on-air talent have with their
audiences, delivered in real time and
we believe that will continue to drive
continued strong performances in 2024.
We believe ARN is the most well-run
audio business in Australia and with the
integration of the Regional Network
now complete, we are well positioned to
identify and deliver further efficiencies
across the breadth of our operations.
Our long-awaited relocation of the
Sydney office, studios and corporate
head office from Macquarie Park
to North Sydney, will take place in
the first quarter of the year. It is a
significant long-term investment and
means ARN will be situated closer to
key clients and agency partners and is
expected to aid employee retention and
engagement metrics.
ARN Media Investments
Cody Outdoor (Cody) has made
progress towards rebuilding its position
in the Hong Kong Outdoor market.
In February 2024, we announced that
Cody had been successful in its bid to
secure the iconic Hong Kong Tramways
Tram Body Advertising contract from
incumbent, JC Decaux. Under the
five-year contract, Cody will be
responsible for selling advertising on
the iconic tramway fleet that transit the
key districts of Hong Kong Island.
Securing the HK Tramways Tram
Body contact is a significant step
towards Cody regaining its position as
a significant player over the medium
term, should the right opportunities
present themselves.
Cody was impacted by the loss of
the Western Harbour Tunnel (WHT)
advertising contract in August 2023,
local currency revenues and earnings
finished back 23% and 28% respectively.
Emotive, an independent creative
agency in which ARN Media holds a 51%
stake, had its most successful year to
date, further expanding its client base,
improving revenues and earnings.
Emotive works with an enviable roster of
local and international clients, including;
Optus, Google, YouTube, Breville, Seven,
Audible, Revlon, Wotif, Unilever and
Pernod Ricard.
Looking to 2024
ARN Media is in a strong position to
deliver value for shareholders in 2024,
although we continue to face uncertainty
in advertising markets.
The significant investments in on-air
talent announced in the last quarter
of 2023, with Kyle Sandilands,
Jackie ‘O’ Henderson and
Christian O’Connell re-signing
long term contracts, give us
confidence we can maintain the
ratings success of the past five to
seven years.
These long-term talent contracts
have been structured to incentivise
incremental revenue growth and
provide a level of surety to the revenue
prospects for the network in the key
Sydney and Melbourne markets.
ARN Media Annual Report 2023 12
13
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
ARN Media Limited (ARN Media)
presents its results for the year ending
31 December 2023.
In the financial report the ARN segment
consists of the ARN Metro and ARN
Regional businesses. Cody Outdoor
(Cody) and Investments, containing
Emotive and ARN Media’s investment
in Southern Cross Media Group
Limited (SCA), remain in separate
operating segments.
On a statutory basis, Group revenues
from ordinary activities of $334.3 million
decreased $10.6 million compared
with prior period. ARN segment
revenues declined $7.8 million in the
year owing to the challenging current
macro-economic conditions impacting
consumer confidence and demand for
advertising. Loss of the Western Harbour
Tunnel contract for Cody in August
contributed $3.7 million to the Group
revenue decline.
Tight cost control restricted Group
costs before significant items to
$270.3 million, an increase of 2%
compared to the prior year.
Underlying Group earnings before
significant items, interest, tax,
depreciation, and amortisation
(EBITDA) of $71.6 million decreased by
$20.2 million as compared to the
previous period, owing to the revenue
and cost changes outlined, and lower
share of associate income following
the successful divestment of the
Group’s interest in Soprano Design Pty
Limited (Soprano) in March 2023.
The statutory loss attributable to ARN
Media shareholders of $9.8 million was
impacted by a $39.1 million gain on the
sale of the Group’s interest in Soprano,
offset by an non-cash impairment charge
against intangible asset balances of
$103.7 million taken in the second half
of the year.
Summary of financial performance
AUD million1
Revenue
Other income
Share of profits of associates
Costs
EBITDA2
Depreciation
Amortisation
EBIT3
Net interest expense
Profit before tax
Tax expense
Profit after tax
Less: non-controlling interests
NPAT attributable to
ARN Media shareholders
Significant items net of tax4
NPAT attributable to
ARN Media shareholders
EBITDA margin
Underlying basic EPS (cents)
Dividend per share (cents)
Dividend per share from 2023
profits (cps)5
Change
(3%)
(25%)
(48%)
2%
(22%)
(2%)
(12%)
(27%)
20%
(31%)
(26%)
(33%)
(15%)
(35%)
(82%)
(94%)
2023
334.3
2.5
5.1
2022
344.9
3.4
9.7
(270.3)
(266.2)
71.6
(17.5)
(2.1)
52.0
(6.7)
45.2
(12.9)
32.3
(2.9)
29.5
(39.3)
(9.8)
21.4%
9.6
7.1
0.0
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
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. Dividend declared in February 2023 of 5.2cps paid from parent entity profits since 1 January 2023.
ARN Media revenue
$334.3m
2023
2022
2021
$334.3m
3%
$344.9m
$329.5m
EBITDA
$71.6m
2023
$71.6m
22%
2022
2021
$91.8m
$96.0m
The impairment charge is a consequence
of reduced earnings stemming from the
current macro economic environment
and with consideration to market
capitalisation of ARN Media and earnings
multiple of its publicly traded peers. The
impairment is a non-cash accounting
adjustment that relates to the historical
book value of the Groups assets.
Underlying drivers of
performance of ARN Media
ARN Segment revenues in 2023 were
down 2%, to $307.0 million. Earnings
before interest, tax, depreciation and
amortisation before significant items
were down 17% to $72.2 million.
ARN Segment total broadcast
advertising revenues were down 4% to
$287.2 million, impacted by challenging
macro-economic conditions, and
significantly reduced government
advertising spend. Metro advertising
revenues finished back 5%, despite
increasing audiences and strong
ratings performance in key markets,
while regional advertising revenues
were less impacted, back 3%. Digital
audio continued to grow, up 36% to
$19.8 million and reducing the overall
revenue shortfall compared to the
previous period.
ARN Media total operating costs
increased by 2% to $270.3 million,
comparing favourably against broader
inflation which increased by over 4% in
the year. Continued management focus
on people and operating costs restricted
overall cost growth, despite on-going
salary and inflation pressures.
Group depreciation and amortisation
expense of $19.6 million decreased by
3% in the year. This resulted in EBIT
before significant items of $52.0 million
compared with $71.6 million in the prior
year, and net profit after tax attributable
to shareholders, before significant items
(NPAT) of $29.5 million.
Details on the significant items totalling
$39.3 million (net of tax), including
an impairment charge on intangible
asset balances in the current year of
$103.7 million are included in note 1.3 to
the Financial Report.
ARN Media Annual Report 2023 14
15
Operating and Financial Review continued
Financial Position
The Group had net assets at
31 December 2023 of $316.4 million,
$43.0 million lower than December 2022
net assets of $359.4 million.
Key changes to assets of the Group in
the period include the disposal of the
Group’s 25% interest in Soprano for
$66.3 million, the acquisition of a 14.8%
investment in SCA for $38.9 million,
further capital investment of $19.9 million
and a $103.7 million impairment of
intangible assets.
Cash and capital management
The balance sheet of the Group remains
in a sound position, with net debt of
$75.1 million and leverage on a pro
forma pre AASB-16 basis of 1.26 times
EBITDA. The Group retains debt facilities
with undrawn limits of $100.0 million,
most of which expire in January 2027.
Investing cashflows include $38.9 million
for the acquisition of shares in SCA,
capital expenditure of $19.9 million,
offset by proceeds from the sale of
the Group’s interest in Soprano for
$62.9 million, net of transaction costs.
On-going capital expenditure
requirements for the Group typically
range between $8–10 million per annum.
Capital expenditure of $19.9 million
in the current period incorporates
$11.5 million for the Sydney office,
studios and corporate head office
relocation project, scheduled for
completion in early 2024.
The accretive share buy-back was
paused in October following the
announcement of a non-binding
indicative proposal to acquire 100% of
SCA.
In consideration of the trading result for
the period and current economic
environment, the Company declared a
dividend of 3.6 cents per share.
Purchase of investment
in Southern Cross Media
Group Limited
The Group announced in June 2023 that
it had purchased a 14.8% interest in SCA
for $38.9 million (including transaction
costs).
In October 2023 ARN Media and
Anchorage Capital Partners Pty Limited
(“ACP”) (together “Consortium”)
announced their non-binding indicative
proposal to acquire 100% of the fully
diluted share capital of SCA through a
scheme of arrangement. SCA
shareholders would receive 0.753 ARN
Media shares and 29.6 cents cash per
share if the proposal is accepted.
The combined radio and television
assets of ARN Media and SCA would
separate into independent ownership
by each ARN Media and ACP as outlined
in the indicative proposal. The proposed
transaction is subject to a number of
conditions, including due diligence and
regulatory approval, and there is no
certainty that a transaction will
eventuate.
The acquisition of the initial 14.8%
interest was reviewed by the Takeovers
Panel. In its decision released on
17 January 2024, the Panel found that
although unacceptable circumstances
applied in relation to the acquisition
of 6.83% of SCA shares, the Takeovers
Panel also found that ARN Media was
able to retain the relevant 6.83% subject
to certain conditions.
Sale of Soprano Design Pty
Limited
On 31 March 2023, the Group
completed the sale of its 25% interest in
Soprano to Potentia Capital (Potentia), a
leading Australian technology focused
private equity firm. The Group received
$66.3 million in cash as consideration for
the sale of its interest, recognising a gain
of $39.1 million. For tax, capital gains
from the disposal were sheltered by
available historical capital losses.
The Group recognised
a gain of $39.1 million
on the sale of its
investment in Soprano
Design Pty Limited
Cash flow generation
AUD million1
Operating cash flows and lease payments2
Tax payments
Tax settlement (incl interest and penalties)
Cash flow from operating activities and lease payments
Investing cash flows
Borrowings
Dividends paid to shareholders
Share buy back
Other financing cash flows
Cash at the beginning of the year
Effect of foreign exchange for the year
Cash at end of year3
Bank loans
Net debt
2023
35.1
(24.5)
0.0
10.5
8.3
9.0
(26.8)
(3.7)
(2.4)
23.9
0.0
18.9
(94.0)
(75.1)
2022
54.7
(25.4)
(22.3)
7.0
Change %
(36%)
(3%)
(100%)
50%
(221.4)
(>100%)
17.0
(27.6)
(2.3)
(6.0)
257.1
0.1
23.9
(85.0)
(61.1)
(47%)
(3%)
56%
(59%)
(91%)
(99%)
(21%)
11%
23%
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. Excludes amounts held in short-term deposit with banking institutions.
ARN Media Annual Report 2023 16
Review of Operations
17
In 2023 we remained focused on delivering our ‘All Audio’ strategy
despite ongoing challenges in local advertising markets stemming
from macro-economic conditions.
Our focus on building an integrated
audio business by leveraging the
strength of our metro, regional and
digital audio assets, saw us performing
well in key audience metrics across all
markets, while maintaining momentum
on critical integration and core
infrastructure projects.
When it comes to content, ARN’s
differentiator remains an obsession with
the powerful connection that talent
have with their audiences, delivered in
real time and critically in regional areas;
hyper localised.
Christian O’Connell
In November, ARN also announced
a five-year contract renewal with
Christian O’Connell who leads the
#1 FM breakfast show for Melbourne’s
Gold 104.310.
Key talent renewals
Three areas of focus
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 three key areas.
Content
Live and local content delivered by Australia’s
best talent, and supported by brands that
people know and trust. We continue to
invest in the long-term talent partnerships
that give audiences and advertisers the
stability they seek in turbulent times.
Distribution
Distributed across our comprehensive
network of broadcast radio stations and on
iHeartRadio, Australia’s most established
digital audio platform.
Audience growth across radio,
podcast, streaming1,2,3
#1
radio stations across key markets: FM
Syd, FM Melb, national
DAB+ station4
#1 Radio streaming app5
#1 Podcast publisher6
#1 Radio network share7
Innovation
Commercialised through a suite of
innovative, data and technology led products
and partnerships.
Continued momentum in digital
audio revenue growth
+36% digital revenue
(vs 2022)
Continued momentum in digital
audio listening
+27% podcast listening (vs 2022)2
+37% audio streaming (vs 2022)3
Continued growth in data availability
and sophistication of use
This year we announced several
significant investments in on-air
talent that give us confidence in
maintaining the ratings success of the
past five to seven years. These long-term
talent contracts have been structured to
incentivise incremental revenue growth
and provide a level of surety to the
revenue prospects for the network in key
Sydney and Melbourne markets.
Kyle & Jackie O
In a landmark deal that will see the
world’s most successful radio show
remain on air with the KIIS Network
until the end of 2034, Kyle Sandilands
and Jackie ‘O’ Henderson re-signed
with ARN in November of 2023.
Simultaneously, we announced that the
duo will commence broadcasting live
into the Melbourne market from 2024
supported by launch partner Chemist
Warehouse.
Since launching KIIS 1065 in 2014, The
Kyle & Jackie O Show has cemented its
position as Australia’s most successful
radio show. Its audience share reached
an impressive 17.9% in June 20238,
accompanied by a record cumulative
audience of 921,000 listeners, marking a
milestone unmatched by any other show.
ARN and The Kyle & Jackie O Show’s
partnership has seen the show maintain
its position as #1FM breakfast show for
an incredible 40 surveys straight while
also claiming #1 overall in Sydney, six of
eight times across 20239.
The unprecedented nature of this deal
is akin to highly competitive sports
rights deals that bring the certainty of
audiences and commercial sponsors
as well as provide the best prospect
of delivering long-term value for
shareholders.
Signing for a further five years (until at
least the end of 2029), ARN is thrilled
to be continuing the longstanding
partnership with Christian, alongside
Jack Post and Patrina Jones, who
together not only form Melbourne’s
#1FM Breakfast Show but can also be
heard syndicated to an additional 27
stations across the country.
Launching with ARN in June 2018,
The Christian O’Connell Show is all
about connection, which explains its
unprecedented success, holding the title
of Melbourne’s #1FM breakfast show for
26 out of the last 29 surveys.
Christian celebrated his 25th anniversary
in radio, first joining GOLD104.3 in 2018
after a successful career in the UK, where
he was the youngest ever inductee into
the UK’s Radio Academy Hall of Fame
and had won more Radio Academy
Awards than any other person. He has
since recorded over 1,000 shows with
the GOLD104.3 family.
The total base fee increases under these
new contract arrangements for Kyle &
Jackie O and Christian O’Connell, that
take effect from January 2025, will be
offset by lower content costs resulting in
part from the live broadcast of the Kyle
and Jackie O Show into Melbourne, and
will be limited to a net total increase of
approximately $2–3 million per annum.
Will & Woody
The KIIS Network’s popular drive duo
Will & Woody also signed with ARN for a
further three years until the end of 2026.
Will & Woody first joined KIIS in 2018
and since then, the boys have not only
achieved ratings success with ARN,
including reaching the #1 National
Drive Show twice in the 2023 GfK Radio
Ratings Surveys11 but have also been
able to use their platform as a vehicle
for social change, particularly around
mental health.
The show has grown its audience
exponentially since starting out as
a national drive show on the KIIS
Network. In 2021 it expanded its
reach via syndication to 42 stations
across the country and now speaks to
1.631 million people each week. The duo
is also in high demand with advertisers
who recognise the value of their candid
connection with audiences.
Continued connection as radio
audiences grow
Growth from the core
ARN continues to be #1 metropolitan
radio network in Australia7 reaching over
6 million people a week1.
In a highly competitive market, ARN
finished 2023 as the #1 metropolitan
network for people 10+7, with our
highest ever cumulative audience1.
Across our metropolitan network, overall
listeners increased by close to 12.7%
year on year1.
ARN continues to lead key metropolitan
markets with #1FM stations in the two
largest markets; Sydney and Melbourne.
In Melbourne, GOLD104.3 is #1FM in
2023 for Breakfast, Morning, Afternoon
and Drive12, led by The Christian
O’Connell Show who has been #1FM for
almost every survey since 2020.
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 in 2023.13
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 remained a strong
overall #1, increasing 10+ Share YoY.
Of the nine of ARN’s other major regional
markets surveyed in 2023, ARN increased
cume in five and
held #1 rankings in Cairns, Hobart &
Bundaberg14.
Will & Woody
Highest national reach ever for
ARN Drive show
#1
ranked FM drive
show in Sydney,
#2 nationally
1,631,000
Total Audience Reach Number
+10% Growth (+153,000)15
Jonesy & Amanda
#2 FM breakfast show in Sydney13
Achieved its
highest share
(annual average)
since 2018
Highest cume ever in 2023,
+11% growth YoY
Kyle & Jackie O
Record breaking cume, reaching more
listeners than any other show in the country
#1
ranked breakfast show
in Sydney for the 40th
consecutive time13
1,396,000
Total Audience Reach Number
(includes Hour of Power)16
+13% Growth (+163,000)
Christian O’Connell
5th consecutive year of growth10
Annual share of 10.5
is the highest ever FM
breakfast share in the
Melbourne market
since 2011
Since joining in 2018, the
Christian O’Connell Show has
grown its audience reach
by 43%
1. GfK Metro S1–8 2023, SMBAP, AM/FM/DAB+, Mon–Sun, 0530–2359,
Cume, p10+ (vs S1–8 2022).
9. GfK S1–8 2023, Sydney, AM/FM, Mon–Fri, 0530–0900, Share, p10+.
10. GfK S1–8 2023, Melbourne, FM Stations, Mon–Fri, 0530–0900, Share,
2. Triton Australian Podcast Ranker, Sales Representation Audience,
p10+.
monthly average Jan–Dec23 (vs Jan–Dec22).
11. GfK S1–8 2023, SMBAP, FM, Mon–Fri, 1600–1900, Share (unless stated
3. Triton and AdsWizz/StreamGuys, Total Radio Streaming, Cumulative
otherwise), p10+.
Reach, Jan–Dec23 (vs Jan–Dec22).
12. GfK S1–8 2023, Melbourne, FM, Mon–Fri, 0530–0900/0900–1200/1200–
4. GfK Metro S1–8 2023, Syd Share FM/Melb Share FM/SMBAP Cume
1600/1600–1900, Share, p10+.
DAB+, Mon–Sun 0530–2359, p10+.
5. Edison Research, The Infinite Dial 2023.
6. Triton Australian Podcast Ranker, Publisher Audience, monthly average
Jan–Dec 2023.
13. GfK S1–8 2023, Sydney, FM Stations, Mon–Fri, 0530–0900, Share, p10+.
14. GfK Gold Coast, S3 2023, Share, Mon–Sun 0530–2359, p10+; Xtra
Insight (Bundaberg S1–23, Darwin S1–21, Cairns S1–23, Gympie S1–22,
Ballarat S1–21,
7. GfK Metro S1–8 2023, SMBAP, AM/FM, Mon–Sun, 0530–2359, Share,
15. GfK S1–8 2023, SMBAP, FM, Mon–Fri, 1600–1900, Share (unless stated
p10+.
otherwise), p10+.
8. GfK S3 2023, Sydney, FM, Mon–Fri, 0530–0900, Share and Cume, p10+.
16. GfK S1–8 2023, FM, Mon–Fri, 0530–900 Syd/1800–1900 SMBAP, Cume,
p10+.
ARN Media Annual Report 2023 18
19
Review of Operations continued
Continued elevation of our
news offering
News is a key element in radio
programming and last year we made
changes to better reflect who we are,
strengthen our news service delivery,
and enhance the quality of the
content we produce. Key to this was
the prioritisation of local news with a
Local News First approach for regional
markets; leading every bulletin between
6am – 9am workdays.
In 2023 we enhanced this strategy
further with the introduction of
long-form local news content via the
Your News Now podcast.
More audio connections in more
places, more often
ARN digital audio
We continue to prioritise investment in
digital audio to capitalise on continued
strong growth in listening to live
streaming of radio and podcasting.
Digital audio advertising spend in
Australia grew to over $244 million
with strong growth across podcast and
streaming advertising expenditure. In
the September quarter, podcasting grew
20% and streaming grew 14%, on the
comparative prior year period9.
ARN digital audio advertising revenues
reached $19.8 million, up 36% on
the prior period. The launch of a
simplified suite of digital products and
prioritisation of digital sales capability
and capacity saw revenue growth
accelerate in the June quarter. Balancing
necessary investment for future growth
with profitability is a key priority. The
EBITDA loss in the period of $8.8 million
is an improvement compared to prior
year, and we remain on-track to steering
the digital audio business to the point of
break even run rate by the end of 2024.
Our strategy is to deliver platform
agnostic content across as many
platforms as possible so that our
audiences can consume whenever,
wherever they want. This allows us to
reach diverse audiences, maximise
revenue potential and ensure
long term relevance.
Podcast listening continues
to grow
Podcast listening has reached mass
appeal with significant increases in
both weekly (+27%) and monthly
(+7%) listening. Across 2023, 43%
of Australians listened to podcasts
each month1 with 74% of those
listeners choosing to listen to ARN’s
iHeartPodcast Network2
ARN’s iHeart finished the year as the
leading podcast publisher3 for the 44th
consecutive time with on average almost
7 million combined listeners and more
than 28 million monthly downloads4.
This represents 27% year on year
audience growth, outstripping the
market which grew 7%2.
We reach 74% Australian Podcast
Listeners and claim more podcast hits
over 1 million monthly downloads4
than any other publisher in the lastest
Ranker5. These include the #1 overall
podcast Casefile, Life Uncut and Stuff
You Should Know. In addition, we hold
4 of the top 10 reaching podcasts,
including the #1 Catchup, #1 Crime,
#1 Relationship, #1 Knowledge,
#1 Finance and #1 Health and
Wellness podcasts.
Of critical importance is our strategy to
continue attracting new listeners to the
iHeart platform through highly sought
after and reputable content,
both original and represented.
We entered into sales representation
partnerships with TED, Seven West
Media and leading sports podcast
publishers, Clubby Sports and the
Sports Social Network.
Content led growth strategy in
digital audio delivering path to
profitability
ARN continues our long-term
partnership with iHeartMedia to license
the digital audio platform in Australia.
This gives us access to an unrivalled
slate of premium podcast content,
international radio stations and an
exhaustive library of curated playlists.
This low capital expenditure investment
model has allowed us to focus on
delivering a cashflow breakeven run
rate by December 2024.
This year we created originals including
The Pool Room with Tony Armstrong
(winner of Best Sports Podcast at the
Australian Podcast Awards), Two Good
Sports with Georgie Tunny and Abbey
Gelmi, Picture Discuss with Merrick
Watts, Concealed with Art Simone,
Judge Gina with Gina Liano, Amanda
Keller’s Double A Chattery and the
return of Christian O’Connell’s Stuff
of Legends.
We also expanded our news offering
by launching Your News Now into
the nation’s Top 30 shows alongside
partnering to launch Australia’s
only Indigenous Podcast Network,
BlakCast. The combination of these new
to network titles resulted in additional
600,000 monthly downloads
(November 2023).
Growth of the platform has been
achieved through a content led
approach enabled by a flexible
operating model that gives us the
opportunity to respond to changing
audience and market demand. We have
invested in refining our approach to
direct customer communications,
capitalising on our breadth of
owned assets to increase registered
users to 2.6 million (up 10% year on
year)6. The increase in user base along
with strategic content programming has
also seen us grow streaming hours by
6%7, underpinned by growth in brand
metrics with awareness of platform
sitting at 87%8.
ARN continues to
be one of Australia’s
leading broadcast
and on-demand audio
companies.
1. Edison Infinite Dial Australia, 2023 (vs 2022).
2. Triton Ranker/Edison Podcast Monthly Population estimate, 2023.
3. Triton Australian Podcast Ranker, Publisher Audience, monthly average Jan–Dec 2023.
4. Triton Australian Podcast Ranker, Sales Representation Audience, monthly average Jan–Dec23 (vs Jan–Dec22).
5. Triton Australian Podcast Ranker, Sales Representation Audience, Dec 2023.
6. iHeartRadio Australia, Registration Data, Lifetime Users, as at Dec 2023.
7. Triton and Adswizz/StreamGuys, Total Radio Streaming Hours, CY23 vs CY22.
8. iHeartRadio Brand Tracking Wave 1–3 2023.
9. Australian Online Advertising Expenditure Report, IAB Australia, September 2023.
Britt, Laura & Mitch – THE PICK UP, KIIS Network
ARN Media Annual Report 2023 20
21
• Plays 160,000 hours of Australian
music, or 2.7 million Australian songs
• Broadcast 42,000 hours of news
and 2,200 hours of emergency
service content
• Supports 6,600 full time jobs, with
38% in regional Australia
Integration complete – delivering
national support to local experts
Two years on from acquiring the regional
radio network and within our integration
timeline, we are pleased to confirm that
the business is now fully integrated,
with singular inventory, revenue and
finance systems.
The regional business continues to
perform incredibly well, with local direct
revenues finishing ahead of a very strong
2022 performance.
Our goal to deliver revenue synergies of
up to $20 million per annum within the
first three years following the acquisition
of the regional business, was impacted
by reduced national agency advertiser
budgets and considerably lower
government spend following the Federal
Election in 2022. Excluding the impact
of reduced government spend, we
have delivered approximately $8 million
annual incremental revenues after
two years.
With the integration now complete, we
remain confident in delivering further
incremental revenues in 2024.
Review of Operations continued
Continued investment in
strengthening the regional
network
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. In 2022 we focused on
the first phase of integration, hitting
all milestones and realising cost and
revenue synergy targets. Into 2023
we continued to prioritise the critically
important connection to community
through investing in local teams, local
content, and improving infrastructure.
Radio remains critical to
connecting regional communities
A report commissioned by Commercial
Radio and Audio and released in August1
reinforced the important role that radio
plays in delivering trusted, local content
to listeners as well as contributing to
Australia’s GDP. Key highlights include
that commercial radio’s 260 Australian
stations:
• Contribute $1 billion annually to the
Australian GDP
• Provides a $320 million annual boost
to regional Australia
• Produces 1.1 million hours of local
content, across broadcast, streaming
and podcasts
Bolstering community connection through improved infrastructure
2EC/Power FM
Batemans Bay
Larger fit for purpose office with new studios, boardroom, and
staff amenities. State-of-the-art Q-sys announcer panel set up,
the studio is now at the forefront of technology and highest
quality for listeners and clients.
4RO
Rockhampton
Brand-new, purpose-built station, complete with two new studios.
River 949
Ipswich
A new reception, boardroom and staff amenities.
Magic 899/5CC
Port Lincoln
New premises featuring three entirely new studios – and
every other area refurbed including a newsroom, sales
area, shared space for announcers/promo team, reception,
boardroom, and staff amenities.
Wave
Wollongong
Rooftop mural, branded reception decal and a freshly painted
interior to match the striking and new exterior.
Emotive
Emotive, an independent creative
agency in which ARN Media 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, design,
production, creative amplification, and
brand experience services.
Emotive works with an enviable roster of
local and international clients, including
Optus, Google, YouTube, Breville, Seven,
Audible, Revlon, Wotif, Unilever and
Pernod Ricard.
Investments
Cody Outdoor (Cody)
Cody has made progress towards
rebuilding its position in the Hong Kong
Outdoor market. Cody was successful in
its bid to secure the iconic Hong Kong
Tramways Tram Body Advertising
contract from incumbent, JC Decaux.
Under the five-year contract, Cody will be
responsible for selling advertising on the
tramway fleet that transit the key districts
of Hong Kong Island. Securing the HK
Tramways Tram Body contact is a
significant stepping stone towards Cody
regaining its position as a significant
player over the medium term, should the
right opportunities present themselves.
Cody was impacted by the loss of
the Western Harbour Tunnel (WHT)
advertising contract in August 2023, local
currency revenues and earnings finished
back 23% and 28% respectively.
1. https://www.commercialradio.com.au/RA/
media/General/Documents/CRA-Deloitte-
Connecting-Communities-2023-Report.
pdf?ext=.pdf.
ARN Media Annual Report 2023 22
2023 awards
In 2023 our people lived our values of “aim
high” and “own it” with a number of
sought-after achievements recognised across
audio. We celebrated the following award
wins across the business.
Australian Commercial Radio
Awards (ACRAS)
In its 34th 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 2023, we reinforced
our position as Australia’s leading audio
company, taking home an astounding 28
awards, the best year for ARN on record.
Patrina Jones presented with
The Glenn Daniel Award –
Best News Presenter FM
Categories won by ARN
• Best On Air Team (Metro) –
Jonesy & Amanda
•
•
Individual Talent of the Year (Metro) –
Kyle Sandilands
Individual Talent of the Year
(Provincial) – Ellie Angel-Mobbs
• Best Program/Content Director
(Metro) – Tony Aldridge
• Best Program/Content Director
(Provincial) – Rod Cuddihy
• Best Networked Show – Kyle & Jackie
O Hour of Power
• The Brenno/Best New Talent On Air –
Radio (Country) – Isabella Roldan
• Station of the Year (Metro) – KIIS 1065
• Station of the Year (Non-Metro) –
Mix 106.3
• Sales Team of the Year (Non-Metro) –
GOLD FM 98.3 & AM 1071 Sales Team
• Best Radio Show Producer
(Non-Metro) – Haylee Potts
• Digital Team of the Year – Joshua Fox
& Ella Kanna
• Best Digital Content Director –
Scott Couchman
• Best Station Produced Commercial
– Campaign (Provincial) – Be Safe|Be
Alive – Chris Tankey, Cath Bell &
Adam Jansen
• Brian White Award for Excellence in
Journalism (Non-Metro) – Katie Woolf
• The Glenn Daniel Award – Best News
Presenter FM – Patrina Jones
• Best Documentary – Radio – Bali
Bombing 20 Years On – Chris Davis &
Ben Ryan
• Best Community Campaign (Metro)
– Mel Dzelde Rescue: The Spirit of
Christmas; The Ali Clarke
Breakfast Show
• Best Regional Salesperson (Regional)
• Best Community Campaign
– Ronnie Young
• Promotions Director of the Year
(Metro) – Annette George
• Promotions Director of the Year
(Non-Metro) – Zak Davies
• Most Creative Station Promotion
(Metro) – ARN Marketing “Win A
Billboard”
• Best Marketing Campaign – The
Christian O’Connell Show, ARN
Marketing “Win A Billboard”
• Most Innovative SAB or Podcast
Format – ARN/iHeart “TikTok
Trending on iHeartRadio”
(Provincial) – Pack the Bus, Mix 106.3
Product Team
• Best Community Campaign (Country)
– Thank A First Responder Day –
Dana Hamilton
• Best Talk Presenter (Non-Metro) –
Katie Woolf
• Music Director of the Year –
Jake Powell
23
Australian Podcast Awards
The Australian Podcast Awards is an
annual celebration of the quality and
breadth of Australian podcast content.
Sponsored by ARN’s iHeart, the event
showcases and celebrates 30 winners
across a range of genres and categories.
Categories won by ARN:
• Podcast Champion Winner –
Life Uncut with Britt Hockley &
Laura Byrne
• Indigenous Podcast Winner – Black
Magic Woman with Mundanara Bayles
• Business Podcast Winner – She’s on
The Money with Victoria Devine
• Sport Podcast Winner – The Pool
Mediaweek Power List
In its third 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
• Duncan Campbell
• Peter Whitehead
• Corey Layton
Quarter One Creative
Collection Competition
An initiative from the Outdoor Media
Association, the OMA Creative
Collection was born to acknowledge and
celebrate the best Out of Home creative
and innovation executions quarterly.
Categories won by ARN:
• ARN Marketing, The Christian
O’Connell Show, GOLD 104.3FM –
Best Use of Multi-Format Winner
Mediaweek Star Power 25 List:
• Kyle & Jackie O #1
• Laura Byrne and Brittany Hockley #12
Legal 500 GC Powerlist
This list highlights influential in-house
lawyers and in 2023 recognised the
following members of ARN’s legal team:
• Will Aplin
• Jeremy Child
Room with Tony Armstrong
• Christian O’Connell #13
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.
Categories won by ARN:
• Ashley Lush – NSW Radio/Audio
Streaming Salesperson of the Year
• QLD Sales Team of the Year
• Amanda Keller and
Brendan Jones #16
APAC Broadcasting+ Award for
Media Strategy
The Asia-Pacific Broadcasting Awards
recognises innovation and excellence in
the broadcasting industry.
Categories won by ARN:
• ARN, Innovation Award
for personalised listener
streaming experience
L-R Erin Donati, Donna Gordon, Jack Post, Lauren Joyce presented with
Best Marketing Campaign “Win a Billboard” – The Christian O’Connell Show
ARN Media Annual Report 2023 24
ARN Media Annual Report 2023
25
InTune: We Hear You
‘InTune’ is Business
Done More Sustainably
Being ‘InTune’ is how we think about our Environmental,
Social and Governance (ESG) priorities and how they
align with our operating environment, team, communities,
audiences, and planet.
In 2023 we focused on lifting our ESG strategy off the page
in practical ways with immediate impact, while keeping our
eye on the prize of long-term, sustainable change.
We know done well, InTune can positively impact our team
beyond work, the lives of listeners, our relationships with
partners and suppliers, our reputation with shareholders
and investors, and the health of the living environments we
broadcast from and to.
Galey & Emily Jade – Hot Tomato Gold Coast
InTune delivers on ARN’s strategic priorities
in four key areas:
InTune with
Our Communities
We make quality connections with our communities
through our audiences, clients and partners by
understanding what’s important to them and giving
back in big and small ways.
Key programs of work undertaken in 2023 include:
• Creation of a bespoke charity strategy for
activation in 2024
• Identifying ‘hearing’ as ARN’s ‘hero’ charity
cause area
• Activation of community ‘moments’ including
National Reconciliation Week, NAIDOC Week,
International Women’s Day, Inclusion@Work Week,
RUOK? Day and more
• Participating in CRA radio, social and
economic value research
InTune with
Our Team
Our people are the reason for our success. We know
diverse, inclusive teams collaborate more constructively
and find even more ways to innovate, achieve and enjoy
their life’s best work.
Key programs of work undertaken in 2023 include:
• Diversity Council of Australia’s Inclusive Employer Index
• Establishing a Gender Equality strategy and work group
• Establishing a Reconciliation Action Plan (RAP)
work group
• Delivering extensive inclusion and mental health training
• Delivering 200+ hours of leadership coaching
• Launching ‘ARN Awards’ internal recognition program
• Participating in OMG’s Diversity, Equity, Inclusion
questionnaire
Read more on page 26
Read more on page 30
InTune with
Our Living 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.
InTune with
Best Practice
Ethical, transparent, and accountable governance
structures and controls underpin all we do.
Key programs of work undertaken in 2023 include:
Key programs of work undertaken in 2023 include:
• Progressing our net zero journey
• Joined CitySwitch as signatories
• Green energy procurement planning
• Green Music Australia’s Green Action Plan program
• Co-founding ‘Green Ears’ audio industry
collaboration
• Risk management framework matured and aligned
to ISO3100
• Compliance Assurance mapping
• Media governance training refresh
• Refresh of Whistleblower communications
• Creation of the In-House Legal Podcast
• Participating in OMG’s Sustainability and Carbon
• Project Review Board established to maximise
Offset Evaluation
impact and controls
• Participating in Singtel/CDP reporting (Emotive)
• Pre-boarding and offboarding compliance
automation
Read more on page 32
Read more on page 34
ARN Media Annual Report 2023 26
27
InTune: We Hear You continued
InTune with
Our Communities
We make quality connections with our
communities through audiences, clients
and partners by understanding what’s
important, to them and giving back in big
and small ways.
As experts in audio, we know listening
is a powerful way to connect and give
voice to diverse groups of people,
including those who can’t access
screens, digital devices or data. It’s also
the only medium which doesn’t depend
on literacy or technical ability to access.
So, from the most remote locations to
those listening deep into the night, radio
leaves no one behind.
This means radio and the ‘radio
people’ at ARN play a unique and
critical role in connecting communities.
From delivering community service
announcements, to sponsorship of
clubs, to fundraising for schools, to
hyper-localised news bulletins, to
weather and disaster reporting we rise
with the sun, live and local every day to
create even more real connections.
Community Service
Announcements
In 2023, we supported 325 diverse
community service organisations
from the Dylan Alcott Foundation to
Citizens for the Great Barrier Reef,
the Cancer Council, National Science
Week, Bravehearts, Musicians Making a
Difference and more. Our Community
Service Announcements (CSA’s) include
providing airtime support and digital
inventory. In 2023 we delivered over
1,293,267 impressions which equates to
over $51,000 in value and 214,000 radio
spots which equates to $22.1 million
in value (up from $18.4 million in
2022). Some charities also received
airtime vouchers used as auction items
at fundraising events to the value
of $318,000.
On Air Activities
ARN consistently uses our voice for good
as we reach into the communities we
broadcast from and to. From fundraising
to awareness campaigns and give-backs,
we invest time and resources to
support those around us as part of our
commitment to helping create a better
tomorrow for our communities.
Shift20
In support of former Australian of the
Year Dylan Alcott’s Shift20 Initiative,
ARN took a national approach. Shift20
aims to increase visibility of Australians
with disabilities in advertising and
media. Across nine markets and 14
networks, ARN provided 5,338 pro bono
spots, equivalent to over $600,000 in
advertising revenue. Dylan Alcott was
interviewed on regional and metro
shows which across breakfast and drive
with almost 3 million listeners tuned-in.
Stars of the Eurobodalla
For the 8th consecutive year, 2EC and
Power FM Bega helped deliver another
successful Stars of the Eurobodalla.
Raising money for cancer research
and information services through the
Cancer Council, the local Batemans Bay
Community donated time, resources
and money to host the 2023 Dance
for Cancer. Host of 2EC Brekky Bar,
Kimmi Saker raised $27,665 (a record),
MCee’d the event and competed as a
dancer – requiring 12 weeks of dance
lessons donated by local studios. In total
the event raised over $176,000.
Christian O’Connell’s
Christmas Campaign with
Backpacks 4 VIC Kids
In 2023, over 6,000 children in Victoria
were taken into care and faced waking
up on Christmas morning without a
present. So after hearing these sobering
statistics, Christian O’Connell called on
listeners to make a small donation to
B4VK who gift Santa Sacks to Victorian
kids in need. The team set a goal of
raising $35,000 and far exceeded this
goal before the show ended that day!
The team ultimately raised $239,262
which provided almost 7,000 children
in-need with a gift for Christmas.
The ‘radio people’
at ARN play a
unique and critical
role in connecting
communities.
Koinz 4 Kids 2023
For 20+ years our Teams in Devonport
and Burnie, Tasmania have fundraised
to support children of the North-
West Coast and in 2023 they raised
a whopping $45,940 for the Fairy
Godmothers. In July the team dedicated
on-air promotions, hosted sausage
sizzles, trivia nights, and live music
events to achieve this fantastic result.
The businesses involved received free
social promotion and on-air shout outs
on 7AD, 7BU, Sea FM 107.7 and Sea FM
101.7. The stations encouraged many
local schools to organise Crazy Hair
Days, Coin Lines and Casual Clothes
Days as Koinz 4 Kids continues to drive
strong community connection.
Hunter Valley Christmas Spectacular
The Christmas Spectacular is a
household name in the Hunter region.
Running for nine consecutive years, this
free community carols event is organised
and sponsored by ARN’s Muswellbrook
Team. They invest around $60,000 each
year to gather 3,000–4,000 locals who
sing and watch an amazing fireworks
display. It’s a family friendly event with
face painting and a jumping castle for
the kids, plus food stalls and markets
operated by local businesses of the
Muswellbrook area.
Find My Family
ARN Melbourne got behind the Find my
Family promo. To help ARN Adelaide
delivered a campaign to help reunite
relatives with family they’d lost touch
with and no longer had means to
connect. The result was an outpouring of
support from the community. Listeners
called to share stories and encourage
those seeking to never give up. Nicole
who participated was reunited with her
father who she hadn’t seen since she was
a child. The moment was broadcast live
on the Ali Clarke breakfast show and was
an emotional moment both for Nicole
and her father, as well as the KIIS team
and listeners.
Far North Queensland Disaster
Relief/Support
Throughout the natural disaster that
hit Far North Queensland in December
2023 where cyclone Jasper and
subsequent flooding left many residents
displaced, the team at Star 102.7 and
4CA camped at the station for 3 days,
sleeping on air mattresses and shared
shifts to keep the community informed
with 24/7 updates. The team donated
400 water bottles to the Mud Army who
help with clean up, and $1,000 worth of
toys in conjunction with Toyworld Cairns
for the Children whose homes and
Christmas presents were ruined due to
the floods.
Variety Tasmania Children’s Charity
7HOFM supported a major fundraising
event which saw the building of Madison
House; a new home entirely built and
fitted with donated time and money. The
team worked with the local community
encouraging 62 local businesses to lend
their support. With on-air appeals, live
broadcasts and crosses at every stage of
the build and on auction day, the house
sold over the $300,000 reserve and
donations totalled $572,000. All money
raised went to the Variety Breakfast Club
ensuring thousands of school children
get a healthy breakfast in Hobart.
Kyle & Jackie O’s Givebacks
Another year of heartfelt ‘Givebacks’
on the Kyle and Jackie O show saw
tears of joy, laughter and excitement as
well-deserving Australians got a helping
hand from the KJ Team. Reuniting a
daughter and her unsuspecting mother
on Mother’s Day, gifting a hard-working
uber driver with a new car to continue
to work, and providing an all-expenses
paid trip to Disneyland for a single
mum and her two kids are just a few
of the moments from 2023’s $100,000
worth of ‘Givebacks’.
Sydney Children’s Hospitals
Foundation Christmas Appeal
WSFM Sydney are proud partners
with the Sydney Children’s Hospitals
Foundation and support Sydney Sick
Kids and Christmas Appeals each year.
Running from late November Jonesy
and Amanda supply live mentions and
promo spots on JAM Nation to raise
awareness and drive donations. WSFM
socials featured patient stories with links
to donate and the team participated
the appeals “Giving Day” visiting
Sydney-based children’s hospitals to
help spread Christmas spirit. WSFM
partnered with Bay Vista Dessert to
provide 1,000 free pancake passes to
patients, families and staff and helped
raised $6.5 million for Sydney Children’s
Hospitals Foundation.
ARN Media Annual Report 2023 28
29
InTune: We Hear You continued
InTune with
Our Communities
UnLtd. Partnership
ARN is a Gold Sponsor and long-time
partner of UnLtd., an organisation
connecting the media, marketing and
creative industries to make significant
social change. Through campaign
support, inventory, CSAs, volunteering
and more, ARN delivered over
$2.2 million worth of value for charities
supporting young people at risk. The
activity included:
•
•
‘UnLtd. Open’ sponsorship for
golf competitions across Sydney
and Melbourne with > 250 people
participating; > $300,000 in
donations; and ARN taking second
place at the Melbourne event.
‘UnLtd. Big Kahuna’ sponsorship of
a surf competition with the inaugural
Mitch Waters Encouragement Award
going to team ARN.
• Dolly’s Dream campaign support
and awareness raising, to help smash
stigma around mental health and
break the silence around bullying.
• Support for MOOD by stocking
MOOD Tea at offices and provision
of media inventory to spread the
word about saving lives, one cup
of tea at a time.
• A barrage of event support, amazing
DJs and fun activations.
In addition, ARN has a strong ongoing
relationship with Musicians Making
a Difference (MMAD) who transform
young lives through music. In 2023, ARN
brought a unique three-week campaign
to life across radio podcasts; podcasting
support; iHeart playlists, promos and
customer communications; as well as
ARN team member engagement. Some
particularly special moments included
superstar MMAD artist Conrad Sewell’s
live interviews and a performance by
MMAD artists at ARN’s Sydney HQ.
Charity and Community Leave
ARN has always provided our team with access to an annual day of paid Charity Leave
and in 2023 we extended this commitment to two days, which can be used to support
a charity or community service of each team member’s choice.
Planet Ark Tree Planting Day
Abby Brown,
Organisational
Effectiveness Specialist
“With ARN’s support, I used my charity day
working for Planet Ark’s National Tree Day,
the largest community tree planting event
in Australia – which is important to me as an
environmentalist and nature-lover. It was a
great feeling contributing to the 27 million
trees planted since it started almost 30 years
ago and getting to meet and work with other
volunteers getting our hands dirty planting.
I’m excited to volunteer again next year.”
YoungCare
Samantha Cannon,
Sales Operations Manager
“Community and giving back is really important
to me and this year I was able to use my ‘charity
day’ at ARN to volunteer for a wonderful
charity – Youngcare. Youngcare works to
improve the lives of young Aussies living with
physical disabilities. I helped with Christmas gift
wrapping to raise much needed funds. I can’t
wait to use my charity day again in 2024 to do
my bit for my community.”
KIIS 101.1 Melbourne at UnLtd. Golf Day
Enhancing On-Demand Accessibility
To maintain our position as industry
leaders in audio news, we continued
to shift journalists, workflows, and
news output from linear to on-demand
offerings. By pioneering in this space,
we meet the needs of audiences,
while recognising the opportunities of
digital audio. Radio news plays a vital
"double duty" role, leveraging owned
and operated distribution channels,
plus third-party opportunities like
Spotify, Google, and Alexa to enhance
accessibility. Our flagship national news
podcast, Your News Now (YNN) also
launched and has consistently ranked as
one of Australia’s best-performing news
podcasts, creating tailored bulletins
based on location and preferences. The
potential of this innovative approach is
significant and shows our commitment to
setting new industry standards.
News and Information in the
Community
Responsible Journalism During
Times of Crisis
ARN is committed to responsible
journalism. During times of crisis, our
journalists serve as a trusted source,
providing regular and timely updates
seven days a week. Our listeners receive
authentic, impartial, and straightforward
news and information. For many, our
bulletins serve as their primary source
of news, so we prioritise all perspectives
to remain relevant to our audiences.
Our robust editorial standards extend
across regional and metro newsrooms,
ensuring whether it's a bulletin on KIIS,
a regional update, or a podcast on
iHeart, the information is accurate,
balanced, and transparent.
Investment in Regional Storytelling
ARN understands the vital role of local
news in our regional communities.
In 2023, we expanded ultra-local news
services in South Australia, Queensland,
and Tasmania. The iHeart Regional News
initiative features distinct titles, carefully
tailored to their market. Each week, local
journalists explore issues impacting their
audiences, presenting content that is
relevant and relatable. These deep dive
stories air in content airtime and are also
available as podcasts.
Max & Ali in the Morning, Mix 102.3 Adelaide
ARN Media Annual Report 2023 30
31
InTune: We Hear You continued
InTune with
Our Team
Our people are the reason for our
success. We know diverse, inclusive teams
collaborate more constructively and find
even more ways to innovate, achieve
and enjoy their life’s best work.
ARN’s Constructive Culture
In 2023, we remained focused on
creating the most constructive culture
possible enabling our people to create
even more connections that count. Our
constructive culture is driven by our
focus on achievement and is brought
to life through four core behaviours of
Aim High, Own It, Be Your Best Self and
Make a Difference which underpin all
we do.
In 2023 our People and Culture initiatives
were selected for their ability to continue
empowering our people to do their life’s
best work.
Inclusion and Belonging Focus
Bringing our diversity and inclusion
(D&I) strategy to life has been a
significant piece of work implemented
in 2023. As members of the Diversity
Council Australia (DCA), ARN’s D&I
strategy is founded in evidence-based
resources and is delivered through
events, webinars and capability
programs.
In addition, ARN participated in
DCA’s 2023 Inclusive Employer Index
– evaluating ARN’s state of inclusion
as compared with the Australian
Workforce benchmark and DCA member
benchmark.
ARN was named one of the DCA’s most
inclusive employers for 2023 marking a
significant milestone in our commitment
to fostering inclusivity and the creation
of D&I initiatives including:
Delivering DCA Inclusion 101 Training
to develop knowledge and confidence
in discussing and developing D&I
capability for 200+ leaders including
the ARN Executive Team and available
to the entire workforce through a digital
learning program.
Establishing a Gender Equality
Working Group to develop and drive
ongoing implementation of ARN’s
gender equality progress, strategy and
policies including the Workplace Gender
Equality Agency’s (WEGA) six gender
equality indicators.
Establishing a Reconciliation Working
Group to develop ARN’s ‘Reflect’
Reconciliation Action Plan (RAP) in
collaboration with our Aboriginal
Cultural Capability partner ‘Black
Card’ and with representation on the
RAP Working Group from Black Card’s
Founder and CEO Mundanara Bayles.
Delivering ‘Black Card’ Aboriginal
Cultural Education to develop and
deepen understanding of Aboriginal
history, perspectives and approaches to
knowledge delivered in workshops to
50+ leaders including the ARN Executive
Team and RAP Working Group.
Launching ARN’s Radio and
Podcasting Scholarship with the
Australian Film, Television and Radio
School (AFTRS) to develop capability
in a future student from any cultural
background/group under-represented
in media today through a Graduate
Diploma student in Radio and
Podcasting.
Creating an Internal Storytelling
Campaign ‘Everyone Belongs’ to share
real stories of diversity and inclusion
at ARN by having our team share lived
experiences of diversity including living
with a physical and/or mental disability;
neurodivergence; LGBTQI+ identities;
flexible work; living with a mental health
condition; and experiences from single
parenting to religious beliefs and more.
‘In-Conversation’ Series
To inform, inspire and support the
curiosity of our team in some of the
complex issues we all manage at work
and in life, in 2023 ARN launched a
series of lunchtime webinars. Hosted by
ARN’s Head of News and Information, ‘In
Conversation’ covered topics including:
•
•
•
•
•
‘Gender Beyond Binary’ with G Flip
and Rhys Nicholson
‘RUOK?’ with Yumi Stynes and
Osher Gunsberg
‘Difference is Beautiful’ with
Dylan Alcott
‘What’s NAIDOC Week?’ with
Aboriginal DJ Soju Gang and
musician Scott Darlow
‘Do We Still Need International
Women’s Day?’ with the Diversity
Council of Australia
The ‘In Conversation’ series provides
moments of togetherness for our
team and is another way we create
connections that count.
ARN Melbourne and Knoxbrooke School to Work Young Adults
Centres of Excellence
We continue to deepen our expertise by
investing in centres of excellence that we
recognise as critical to the success of our
organisational design and to the delivery
of our products and services including:
News and Information: To revolutionise
news delivery, we established a
new News Leadership Team and
shifted workflows from disposable
linear bulletins to on-demand to
meet audience expectations and
consumption. Realising significant
savings and previously untapped
opportunities to monetise digital
news, embedding a ‘Local News First’
approach in 2023 further shows our
commitment to quality storytelling,
controlling our editorial agenda and
investing in new talent pathways.
People Operations: To meet the needs
of our growing workforce, evolving
regulatory landscape and provide the
best employment experiences in People
Operations we streamlined payroll
operations following systems uplift and
introduced subject matter expertise in
Remuneration and Benefits; Systems and
Data; and Workplace Health and Safety.
Visual Production: To craft unique
visuals, TVCs, event creative, original
content series, digital assets and
establish ARN as a complete content
enterprise, we have established a
dedicated visual production team who
connect strategy with creativity. The
multidisciplinary team of producers,
directors, motion graphics creators
and DoPs work across marketing,
commercial, content and corporate
to grow brands visually and elevate
commercial offerings while driving
cost efficiencies.
Governance: To further evolve ARN’s
control environment and assurance
mechanisms, we realigned internal
structures and appointments including
PwC Partner rotation, ARC Chair, Head
of Risk and Assurance, Head of Finance
for Reporting and Operations.
Recognition and the
ARN Awards
In addition to the many industry awards
and accolades ARN claimed in 2023, this
year we also launched a new internal
recognition and awards program –
The ARN AWARDS.
The ARN Awards are an annual
celebration of the achievements of our
people, and our unique culture. The
awards recognise excellence in both
what we do (delivering on strategy)
and how we do it (behaviours and
culture). Across four Business Awards
categories and three People Awards
categories, we’ve created a program
with opportunities for everyone at ARN
to enter.
The ARN Awards will be presented
as part of an interactive company
conference to be held simultaneously
online and in-person bringing our
diverse teams together to celebrate.
Capability Building
Our approach to capability centres
around creating opportunities to coach
our team in areas which drive business
outcomes and personal engagement.
To do this, we develop and cascade
targeted programs to meet our people’s
evolving needs which this year included:
Leadership@ARN: Our award-winning
program providing leaders with insights
into their impact and the role they play in
creating culture. The program includes
completion of the Human Synergistics
Life Styles Inventory (LSI) debriefed by
accredited coaches, virtual workshops,
on-the-job assignments, 1:1 coaching,
pre/post work, plus peer-to-peer
‘hubs’. Leadership@ARN is our most
‘in demand’ program and has been
delivered to more than 200 leaders, with
50% participating in 2023.
Adopt a Show: A 12-month program
providing coaching and mentoring to
Regional breakfast teams from a Senior
Content Director in a Metro market
through critiques of a show’s audio;
written coaching feedback and actions
for the coming month; plus video
coaching with the local Content Director,
Talent and General Manager.
The In-House Legal Podcast:
A unique and innovative series
designed for Journalists, Content
Directors and Digital Producers
created by ARN Journalists, Legal and
Learning teams with episodes including
Ask a Lawyer, Contempt, Privacy,
Surveillance, Defamation and Copyright
– so our busy people can listen and learn
on-the-go.
Health, Safety and Wellbeing
This year, we continued to improve
of our Workplace Health and Safety
Management System including
physical and psychological health
and safety from a comprehensive,
organisation-wide psychosocial
review; to a regional review; and focus
on horseplay and practical jokes for
content teams. In addition, our Safety
Committee Meetings have a regular
cadence and provide opportunities to
review and implement learnings from
systems data, site inspections, legislative
changes, training and national projects.
Our Team’s wellbeing is supported
across initiatives including
evidence-based mental health training
and support for leaders delivered by
registered psychologists from the Black
Dog Institute. All team members and
their immediate families can access
to our Employee Assistance Program
(EAP) which provides free, confidential
psychological counselling and support
for a range of professional and personal
issues. Team members can also access
an external, anonymous whistleblowing
reporting and management service
managed by KPMG Fair Call.
ARN Media Annual Report 2023 32
33
InTune: We Hear You continued
InTune with
Our Living 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.
In 2023, we have focused on
establishing a stepwise approach to
achieving our long-term environmental
sustainability goals. This has included
building internal sustainability
knowledge, resources and data,
audio industry peers, decarbonisation
specialists and right-sized consultants
for specialist support.
Our key activities for 2023 included:
Progressing Our Journey
Our long-term approach is acting to
reduce greenhouse gas emissions before
balancing hard-to-avoid emissions
through offsets for those we can’t avoid
through a net zero pathway which
includes:
1
2
3
4
5
6
Establishing our baseline applying
the Greenhouse Gas Protocol’s
scoped approach.
Readying our team for success by
embedding mindsets which support
behavioural change.
Finding ways to reduce office
emissions starting with simple steps
for improved energy efficiency,
waste management and recycling,
or eliminating single use items.
Taking a stepwise approach to
procuring energy generated from
renewable sources.
Looking up and downstream of our
operations.
Responding to our team, community
and investor expectations.
7 Offsetting emissions as a last resort.
Becoming City Switch
Signatories
ARN are signatories to CitySwitch,
Australia’s free, flagship decarbonisation
program for office-based business made
possible through council partners and
NAEBERS. CitySwitch provides tools,
resources, events, best practice sharing,
webinars and workshops to office-based
businesses committed to reducing
their carbon footprint based on the
Greenhouse Gas Protocol. As members,
ARN receives support moving toward
net zero using a framework which begins
with measuring baseline scope 1 & 2
emissions (which ARN achieved in 2022)
and reporting annually as we progress
towards net zero.
Green Energy
Procurement Planning
As with most businesses where
electricity is the primary emitter of
greenhouse gasses, investing in,
structuring and managing procurement
of sustainable energy through a
renewable electricity tender is an
essential step on our path to net
zero. So, in 2023 we progressed our
baseline data collection to determine
the right time to assess and secure a
commercially attractive, sustainable
electricity procurement solution for
our portfolio. In tandem with exploring
renewable energy options, a future
tender process to obtain the
best-possible offers for electricity
contracts has been investigated.
In 2023, we have
focused on establishing
a stepwise approach
to achieving our
long-term environmental
sustainability goals.
Participating in Green Music
Australia’s ‘Green Action
Program’
Green Music Australia (GMA) charity
which works to improve the industry’s
environmental performance. The ‘Green
Action Program’ (GAP) program devised
by GMA supports aligned businesses
to understand, monitor and improve
their environmental impact. In 2023,
ARN participated in the GAP program
alongside industry peers ABC Music,
Universal Music Australia, Music NSW,
and the Electronic Music Conference.
ARN’s relationship with GMA continues
through a music industry environmental
reporting platform AMIDESI which
analyses environmental data.
‘Green Ears’ Audio Industry
Collaboration
Green Ears is a collaboration of
Australian audio businesses which
envisions a future where audio thrives
in environmentally sustainable ways.
Green Ears is open to all Australian radio
stations, audio creators, peak bodies
and suppliers committed to this vision.
Green Ears is an informal collaboration
sharing insights, learnings, progress, and
ambitions on sustainability for the good
of our industry.
ARN became a founder of Green Ears
in 2023 and participates by exchanging
sustainability information, ideas, and
best practices to inspire and motivate
our industry’s people, partners,
providers and audiences using our
collective impact.
Jade and Damien, breakfast hosts of WAVEFM 96.5
ARN Media Annual Report 2023 34
35
InTune: We Hear You continued
InTune with
Best Practice
ARN Media’s
long-term success
requires strong
governance, across
both corporate
and media areas
of operation.
Corporate Governance
ARN is an ASX listed company with an
objective of increasing shareholder
value within an appropriate framework
of corporate governance. The Company
continues to adhere to the best practice
recommendations established by the
ASX Corporate Governance Council.
The documents detailing the Company’s
corporate governance framework are
available at http://arn.com.au/corporate-
governance/. The Corporate Governance
Statement and the Code of Conduct
are our key guiding documents with
charters in place 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 Whistleblower.
The Whistleblower program ensures
people can raise concerns regarding
actual or suspected contraventions
of the Company’s ethical and legal
standards without fear of reprisal
or feeling threatened by doing so.
The policy includes an externally
managed hotline to give whistleblowers
confidence and the ability to make
complaints on an anonymous basis.
Media and Content
Governance
As a media and content organisation,
particularly in the commercial radio
broadcast industry, ARN operates in
a heavily regulated environment. The
company takes its obligations seriously
and has implemented a range of controls
to ensure compliance with the various
laws, regulations, codes and standards
that apply, including the Broadcasting
Services Act and the Commercial Radio
Code of Practice as administered by
the Australian Communications and
Media Authority (ACMA). These controls
include internal policies, training and
education on the Code and specific
topics that are frequently encountered
by media organisations, such as content
regulation, defamation, copyright,
privacy, anti-surveillance laws,
advertising restrictions and consumer
protection.
ARN also recognises the importance
of protecting the intellectual property
rights in its original and licensed
content and brands, which are
recognisable around the country. It
protects those rights through a variety of
pre-emptive and reactionary measures,
including registration of trademarks
and enforcement of its rights against
infringers. The company respects the
rights of third parties and obtains the
authorisation, licences and clearances
necessary when using their content.
ARN is well attuned to rapid changes
in technology, particularly in the
digital sphere, and its robust approach
to leveraging these advances in a
compliant manner means it is well placed
to navigate this evolving environment.
Australian music and artists
Commercial radio is an important part
of the Australian creative ecosystem,
providing a platform for musical artists
and other creative professionals. Radio
networks have a legal obligation to
broadcast minimum quotas of music
performed by Australian artists. This
helps support the development of the
Australian music industry and artists’
careers. ARN’s radio stations make
a concerted effort to contribute to
Australian artists, directly through
royalty payments and indirectly by
supporting new and established artists
by playing their music, promoting gigs
and upcoming tours and interviewing
them on air.
As a media and content
organisation, particularly
in the commercial radio
broadcast industry, ARN
operates in a heavily
regulated environment.
ARN Media Annual Report 2023 36
ARN Media Annual Report 2023
37
Board of Directors
Hamish McLennan
Chairman of the Board and
Non-Executive Director
(since 30 October 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.
Ciaran Davis
CEO & Managing Director
(since 24 August 2016)
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 Group CEO of
ARN Media, 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.
Committees
Audit & Risk, Remuneration, Nomination
and Governance.
Other Directorships and offices
Director of a number of ARN Media
subsidiaries and joint venture companies
and The Australian Ireland Fund Ltd.
Previous directorships of other
Australian listed companies
(last three years)
Nil.
Other Directorships and offices
Director of REA Group Ltd (Chairman),
Magellan Financial Group Limited
(Deputy Chairman), Claim Central Pty
Limited, Light & Wonder (US Company,
formerly Scientific Games Corp) 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).
Alison Cameron
B Ec
Non-Executive Director
(since 5 January 2022)
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 47 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 and in December 2023,
was appointed Director of Ensemble
Foundation Limited, a not for profit in
the arts sector.
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
B Com, FCA
Non-Executive Director
(since 18 October 2012)
Brent Cubis
B Com, CA, GAICD
Non-Executive Director
(since 14 June 2023)
Belinda Rowe
BA, GAICD
Non-Executive Director
(since 5 February 2019)
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 telecommunications,
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.
Previous directorships of other
Australian listed companies
(last three years)
Nil.
Brent was appointed as a Director of
ARN Media Limited on 14 June 2023.
He is an Independent Non-Executive
Director and Chairman of the Audit and
Risk Committee.
Brent is a highly experienced
Non-executive Director, and CFO with
over 30 years’ Experience with boards
in senior finance roles. Brent is currently
a Non-executive Director and Chair of
the Audit & Risk Committees for
A2B Ltd (ASX: A2B), EML Payments Ltd
(ASX:EML), Silverchain Group, Carbon
Cybernetics and leading youth cancer
charity Canteen Australia. His previous
roles have included CFO of Cochlear
Ltd, CFO of Nine Network Australia and
a Non-executive Director of Prime Media
Group Limited.
Committees
Audit & Risk (Chair), Remuneration,
Nomination and Governance.
Other Directorships and offices
A2B Ltd, EML Payments Ltd, Silverchain
Group, Carbon Cybernetics and Canteen
Australia.
Previous directorships of other
Australian listed companies
(last three years)
Prime Media Group Limited (from
15 April 2021 to 31 March 2022).
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 a member of
the Global Executive Board at Publicis
Media and Zenith, one of the largest
media communications groups in the
world. She also created and led 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. Belinda
also has extensive sector experience in
telecommunications, media, finance,
technology, tourism, consumer products,
and healthcare.
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
Non-Executive Director of Sydney Swans
Ltd, Temple & Webster Group Ltd,
3P Learning Ltd and Sky NZ Ltd.
Previous directorships of other
Australian listed companies
(last three years)
Nil.
38
39
Senior Management Team
Directors’ Report and Financial Report
Ciaran Davis
CEO & Managing Director
(since 24 Aug 2016)
Refer to biography above.
Jeremy Child
B Bus LLB MSc
Chief Legal Officer & Company
Secretary
(since 14 Aug 2019)
Jeremy Child joined ARN Media Limited
in 2015 initially as Group Taxation
Manager. He took on the role of
Company Secretary in 2019 and then
Chief Legal Officer in 2022.
Jeremy 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 providing R&D advice with M&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.
Andrew Nye
B Bus, CA
Chief Financial Officer
(since 14 Aug 2019)
In August 2019, Andrew Nye was
appointed Chief Financial Officer of
ARN, with dual responsibility for both
ARN and ARN Media Limited. He joined
ARN Media Limited in 2015 as General
Manager of Finance and was appointed
Chief Financial Officer of Adshel in 2017.
At ARN Media Limited, 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 ARN Media Limited
subsidiaries and joint venture entities.
40 Corporate Governance Statement
40 Directors’ Report
46 Remuneration Report
62 Auditor’s Independence
Declaration
3. Capital management
87 3.1 Bank loans
88 3.2 Cash flow information
89 3.3 Financial risk management
91 3.4 Fair value measurements
63 About The Financial Statements
93 3.5 Contributed equity
63 Consolidated Financial Statements
94 3.6 Share-based payments
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 Revenue
70 1.2 Expenses
95 3.7 Reserves and
accumulated losses
97 3.8 Dividends
4. Taxation
98 4.1 Income tax and deferred tax
5. Group structure
102 5.1 Controlled entities
105 5.2 Interests in other entities
106 5.3 Shares in other corporations
107 5.4 Investments accounted for
using the equity method
70 1.3 Segment information
109 5.5 Parent entity
73 1.4 Earnings per share
2. Operating assets and liabilities
financial information
110 5.6 Deed of cross guarantee
74 2.1 Intangible assets
80
2.2 Property, plant
and equipment
82 2.3 Leases
85 2.4 Provisions
6. Other
112 6.1 Disposals
112 6.2 Contingent liabilities
113 6.3 Remuneration of auditors
114 6.4 Related parties
115 6.5 Other significant
accounting policies
116 6.6 Subsequent events
117 Directors’ Declaration
118 Independent Auditor’s Report
123 Shareholder Information
126 Corporate Directory
ARN Media Annual Report 2023 40
ARN Media Annual Report 2023
Directors’ Report
Corporate Governance Statement
The Board of ARN Media Limited 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, https://arn.com.au/corporate-governance/
Directors’ Report
Your Directors present their report on the consolidated entity consisting of ARN Media Limited and the entities it controlled at the end of, or during,
the year ended 31 December 2023. Throughout this report, the consolidated entity is also referred to as the Group.
1. Directors
The Directors of ARN Media 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; resigned 17 May 2023)
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)
Brent Cubis (appointed 14 June 2023)
Details of the current Directors’ qualifications, experience and responsibilities are set out on pages 36 and 37.
2. Company Secretary
The Company Secretary of ARN Media 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
ARN Media 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.
ARN Media 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 CADA.
ARN operates music, streaming and podcasting distribution platform iHeartRadio, under a long term licence agreement, along with a content
creation business Emotive.
ARN Media also owns Cody Out-of-Home in Hong Kong, which has a network outdoor advertising panels across major Hong Kong tunnels.
41
Directors’ Report
(Continued)
Dividends
Dividends paid to owners of ARN Media Limited during the financial year were as follows:
Dividends
Type
2022 Dividendi
Interim 2023
Cents
per share
5.2
3.5
AUD
million
Date of Payment
16.1
23 March 2023
10.7
21 September 2023
(i) Paid from parent entity profits since 1 January 2023
Since the end of the financial year, the Directors have declared the payment of a fully franked dividend of 3.6 cents per ordinary share.
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 6.6 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 ARN Media’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, https://arn.com.au/corporate-governance/
42
ARN Media Annual Report 2023
Directors’ Report
(Continued)
The Group has identified a number of key business and financial risks which may impact on ARN Media’s achievement of its strategic and financial
objectives. They include, but are not limited to:
Risk
Changes in radio
audience share
Loss of key on-air talent
Changes in advertiser and/or
audience preferences
Macroeconomic factors
Loss of broadcasting
licence
Disruption of technology systems,
security breaches and data
privacy
Description
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.
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.
Remaining relevant to advertisers and audiences is critical to meeting the Group’s strategic objectives.
Changes in audience preferences leading to audience fragmentation could over time, result in
revenue declines.
The Group remains focused on improving commercial revenue share through its “Defining Audio through
Connections that Count” commercial proposition. The Group’s relevance to advertising agencies and clients is
amplified by the network of stations across regional Australia. 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.
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.
The Group maintains a sound capital structure with sufficient undrawn financing facilities in place. It will
continue to monitor performance and market developments to reassess plans and strategies as required.
While considered unlikely, the loss of an Australian radio broadcasting licence would have a material
impact on Group revenues and earnings.
The Group has long-standing controls in place to minimise the risk of legislation compliance breaches.
There are a number of technology systems that are critical to the operations of the Group and to the
protection and maintaining of privacy of data.
The Group continues to invest in cyber security and strengthening its IT Risk Management Framework to
reduce the occurrence of outages, enable early detection of issues and mitigate operating and financial
impacts. Continuous incident detection and response services are in place as well as regular staff cyber
awareness briefings and training.
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 (resigned 17 May 2023)
Paul Connolly
Ciaran Davis
Alison Cameron
Belinda Rowe
Brent Cubis (since 14 June 2023)
Board of Directors
Audit & Risk
Committee
Remuneration, Nomination
and Governance Committee
Held
Attended
Held
Attended
Held
Attended
12
3
12
12
12
12
9
12
3
12
12
12
12
9
4
1
4
4
1
4
N/A1
N/A1
4
4
2
4
4
2
3
1
3
N/A
N/A
3
2
3
1
3
N/A
N/A
3
2
1 Ciaran Davis attended all Audit & Risk Committee meetings
Committees were formed for purposes of approving the half-year financial statements, annual financial statements, 2022 Annual Report, 2023
Notice of Annual General Meeting and non-indicative proposal to acquire Southern Cross Austereo (SCA). These meetings were attended as
follows (Held/Attended): Hamish McLennan (3/3), Ciaran Davis (4/4), Roger Amos (1/1), Brent Cubis (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 2023.
13. Shares Under Option
There were no unissued shares of ARN Media Limited under option at 31 December 2023 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).
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.
44
ARN Media Annual Report 2023
Directors’ Report
(Continued)
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 $239,647 for the provision of non-audit
services. Full details of the amounts paid or payable to the auditors for audit and non-audit services provided during the financial year are set out
in note 6.3 to the consolidated financial statements.
The Company auditor has provided the Directors with an Auditor’s Independence Declaration in relation to the audit, a copy of which is provided
on page 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
22 February 2024
46
ARN Media Annual Report 2023
Remuneration Report
Dear Shareholders
On behalf of the Remuneration, Nomination and Governance Committee and the Board of Directors, I am pleased to present ARN
Media’s Remuneration Report for 2023.
The Chairman’s and CEO & Managing Director’s reports outline the performance of the Group in 2023. Despite the ongoing challenges
experienced by local markets in a slowing economy and the impact this has had on Group advertising revenues and earnings, the Group
maintained its market leading metropolitan radio audience share, completed the integration of the regional radio network, re-signed our key on-
air talent on long-term contracts, and continued to grow digital audio audiences and revenues.
The completion of the sale of ARN Media’s long-held investment in Soprano Design for $66.3 million placed the Group in a strong position to
further pursue its ambition to be the most successful audio entertainment business in Australia. The acquisition of a 14.8% stake in Southern Cross
Media Group Limited in June followed by a non-binding proposal to acquire the whole business as part of a consortium saw the Group executing
on its strategy.
The announcement in November that we had extended our two top rating Breakfast shows in Sydney and Melbourne on long term contracts was a
significant strategic step to invest in the best and most trusted radio and audio on-air talent in Australia to cement our leadership position and
provide the best prospect of delivering long-term value for shareholders.
ARN Media’s financial performance for 2023 finished behind its revenue targets, and the remuneration outcomes set out below reflect this
performance.
Remuneration Approach and Changes For 2023
There were no changes to the CEO & Managing Director’s and the CFO’s Total Financial Remuneration (‘TFR’) for 2023, other than passing on the
increase in the superannuation guarantee rate on the maximum superannuation contribution base at 1 July 2023.
The structure and financial metrics of the Group’s Total Incentive Plan (TIP) in 2023 remained consistent with the 2022 plan.
Performance and Remuneration Outcomes For 2023
As previously outlined, ARN Media’s financial performance in 2023 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 $71.6 million was down 22% versus 2022 and 21.7% below
target;
EPS on a post-tax basis, before significant items, of 9.6 cents was 32.5% below target; and
ROIC, calculated based on earnings before interest and tax (EBIT) and before significant items, of 10.6%, compared to target
of 15.1%.
Executive KMP met most of their individual key performance indicator (KPI) targets.
Remuneration Changes For 2024
A review of Executive KMP remuneration was undertaken, with the support of external remuneration specialists, SW Corporate. This review
included consideration of high-level benchmarking data and advice regarding Executive KMP retention schemes. Having considered this advice,
the Committee recommends the implementation of a Retention Scheme for the Executive KMP, the details of which are included in this report.
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 2023 outlines key aspects of our remuneration framework and has been audited in
accordance with the Corporations Act 2001.
Total remuneration for Executive KMP
Our Remuneration Report contains the following sections:
A. Who this report covers
B. Changes to remuneration for 2024
C. Remuneration governance and framework
D. How 2023 reward was linked to performance
E.
F. Actual remuneration for 2023
G. Contractual arrangements with Executive KMP
H. Non-executive Director arrangements
I.
J. Non-executive Director and Executive KMP shareholdings
K. Other statutory disclosures.
Share-based remuneration
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
Hamish McLennan
Brent Cubis
Roger Amos
Paul Connolly
Belinda Rowe
Alison Cameron
Role
Chief Executive Officer (CEO & Managing Director)
Chief Financial Officer (CFO)
Non-executive Chairman
Non-executive Director (from 14 June 2023)
Non-executive Director (resigned 17 May 2023)
Non-executive Director
Non-executive Director
Non-executive Director (from 5 January 2022)
No other changes have occurred to the composition of KMP since 31 December 2023 up to the date of this report.
48
ARN Media Annual Report 2023
Remuneration Report
(Continued)
B. Changes to Remuneration For 2024
The Committee reviews Executive KMP remuneration on a periodic basis, often with the assistance of external remuneration specialists. In 2023, SW
Corporate was engaged to provide high-level benchmarking data and advice regarding Executive KMP retention schemes.
Having considered this advice, the Committee recommends the implementation of the following Retention Scheme for the Executive KMP. The
Retention Scheme is provided in addition to the 2024 TIP. The Retention Scheme is intended to retain the Executive KMP in a period with critical
projects underway, including the proposal to acquire SCA, extending the Kyle & Jackie O Show into Melbourne, and delivering business
simplification and cost reduction.
The Committee also recognises that the KMPs did not receive any of the 75% financial component of TIP awards during 2019, 2020, 2022 or 2023
(largely due to prevailing market conditions in those years). This means the TIP provides only a limited retention mechanism over the near-term
period when these critical projects are underway.
The Retention Scheme recommended is designed to retain the Executive KMPs and is summarised as follows:
Feature
Instrument
Description
Performance Rights
Performance Period and
Vesting Date
Vesting Conditions
2 years, with 31 December 2025 being the Vesting Date when vested Rights convert to Shares in the Company.
Vesting will occur where the following Vesting Conditions are met over the two-year Performance Period:
•
•
Service Component (25%) for continued service to the Vesting Date; and
Performance Components allocated as follows:
o
o
o
Successful execution of M&A plans (45%)
Delivery of leadership succession plan (15%)
Delivery of business simplification and cost reduction (15%)
Holding Lock
•
•
50% of Shares will be unrestricted on 31 December 2025; and
50% of Shares will be restricted until 31 December 2026.
Allocation Price
The volume weighted average price (VWAP) of A1N stock over the first 30 trading days of 2024.
Participants and Quantum
Treatment on cessation of
employment during the
Performance Period
Change of Control
•
•
CEO & Managing Director: $960,000
CFO: $460,000
(equivalent to ~80% of total fixed remuneration)
If during the Performance Period an individual ceases employment, then:
•
•
For Bad Leavers, awards are forfeited.
Bad Leaver status may be due to termination for cause, resignation, or any other similar situation
determined by the Board.
•
For Good Leavers:
o
o
The Service Component will vest in full in the ordinary course at the end of the Performance
Period;
The Performance Components will be pro-rated for the portion of the Performance Period served
and left on foot to be tested and Vest in the ordinary course at the end of the Performance
Period.
• Good Leaver is anyone that is not a Bad Leaver. Good Leaver status may be due to death, total and
permanent disability or genuine retirement.
Vested awards still remain subject to the Holding Lock.
The Board has discretion to determine an alternate treatment depending on the circumstances.
•
•
Where the Board recommends a transaction to the Company’s shareholders that may result in a change of
control of the Company, then unvested Performance Rights will vest in full to be sold into the relevant Change of
Control transaction.
This however is subject to discretion of the Board to determine otherwise, having regard to matters including the
transaction circumstances and performance against the Performance Components.
Dividend entitlement
Participants will be entitled to dividends from the Vesting Date, when the Performance Rights convert into Shares.
At the discretion of the Board participants will receive an additional allocation of Performance Rights or a cash
payment at vesting equal to the dividends paid on vested rights over the Performance Period.
Board discretion
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.
49
Remuneration Report
(Continued)
TIP Rules
The Retention Scheme will be subject to the same TIP Rules as the TIP scheme. In the case of any contradiction
between the Retention Scheme terms and the TIP Rules, the Retention Scheme terms will apply.
C. Remuneration Governance and Framework
Remuneration Governance
The role of the Remuneration, Nomination and Governance Committee is to oversee ARN Media’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.
Remuneration Framework
We believe that building and maintaining a primarily constructive culture enables business success, drives internal engagement, and allows us to
attract and retain the best people. Our remuneration framework has a key role to play and is structured in alignment with the following principles:
Market competitive through
alignment against a peer group
of companies of a similar size
and complexity
Rewards the creation of
shareholder value through the
sustainable delivery of short and
long-term business outcomes
A holistic “total reward” offering
across financial and non-financial
elements that balances reward
with retention
A focus on stretch goal
achievement, leveraging financial
and non-financial KPIs to balance
the “what” with the “how”
ARN Media 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.
ARN Media 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 ARN Media 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.
50
ARN Media Annual Report 2023
Remuneration Report
(Continued)
The Executive KMP remuneration framework is summarised below.
Element
Delivery
Structure
Fixed
Total Fixed
Remuneration (TFR)
Cash and Superannuation
Contributions
– Base pay aligned to market, role scope and complexity, and
skills, knowledge, and experience of the individual
– Superannuation aligned to SGC
Variable
‘At risk’ and
linked to
performance
Total Incentive Plan
(TIP)
Financial performance
of the company and
individual performance
over the year
Cash 50%
Delivered at the end of the
financial year
– KPIs set at the start of the financial year
– 75% financial KPIs (weighted equally between ROIC, 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 ARN Media’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.
51
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
EBITDA and EPS
performance
<95% of budget
95% of budget
>95% to <100%
of budget
100% of budget
>100% to <110%
of budget
At or above 110%
of budget
Percentage of target opportunity
awarded
0%
25%
Pro-rata between
25% and 100%
100%
Pro-rata between
100% and 150%
150%
ROIC
ROIC performance
Below threshold1
At threshold
Between threshold
and budget
At budget
Between budget
and stretch
At or above stretch
Percentage of target
opportunity awarded
0%
25%
Pro-rata between
25% and 100%
100%
Pro-rata between
100% and 150%
150%
The financial performance award schedule is designed to provide only limited awards where performance is below budget, with upside for
performance above budget, up to a maximum cap of 150%.
EPS in 2023 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 2023 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.
52
ARN Media Annual Report 2023
Remuneration Report
(Continued)
Non-financial KPIs make up 25% of the target TIP and are aligned to key strategic priorities for the Group. For 2023, the Executive KMPs were
accountable for delivering the following outcomes to achieve their non-financial KPIs:
Strategic Priority
Transformation of ARN
Leadership of ARN people
and culture transformation
Balance sheet, cost, and capital
management
Outcomes Delivered
•
•
•
Evolved strategic planning processes to align with sustainable, long-term performance
Completed the integration of the regional business, including alignment of core finance people,
processes, and technology
Delivered an all-of-audience content strategy and executed a strategy for key on-air talent
contract retention
• Grew share of audience in metro and key competitive regional markets
• Ongoing investment in digital, technology, finance, and cyber security capability, and data
management
• Ongoing investment in leaders, content, news, and sales professionals through the design and
•
•
•
•
delivery of capability development programmes
Development of a sustainable business framework (ESG) that ensures appropriate focus on and
engagement with ARN’s people and community, care for the environment, and adherence to
governance frameworks
Successful divestment of Soprano Design
Continued the centralisation of key support functions, insourcing of key processes, and investment in
systems to deliver efficiencies
Secured, designed, and managed the build of a new Sydney / corporate head office that caters to
the current and future needs of the business
53
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 2023.
CEO & MD
CFO
Variable -
TIP
53%
Fixed - TFR
47%
Variable -
TIP
50%
Fixed - TFR
50%
Fixed - TFR
Variable - TIP
Fixed - TFR
Variable - 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 (equity)
54
ARN Media Annual Report 2023
Remuneration Report
(Continued)
Other plan features
Feature
Dividends
Equity allocation
methodology
Clawback
Description
At the discretion of the Board participants will receive an additional allocation of fully paid ordinary shares or a
cash payment at vesting equal to the dividends paid on vested rights over the performance and service periods.
Equity is granted based on the face value of the rights calculated at the commencement of the performance
period.
The Company may reduce unvested equity awards in certain circumstances such as gross misconduct, material
misstatement or fraud. The Board may also reduce unvested awards to recover amounts where performance that
led to payments being awarded is later determined to have been incorrectly measured or not sustained.
Treatment of awards on
cessation of employment
Awards are forfeited for ‘bad’ leavers (e.g. resignation or termination for cause), while ‘good’ leavers (e.g.
cessation of employment due to redundancy, total disablement or death) receive pro-rated awards based on the
extent to which performance and service conditions are met.
Treatment of awards on
change of control
Participants receive pro-rated awards based on the extent to which performance and service conditions are met.
The Board retains the ultimate discretion regarding remuneration outcomes. The Board may make or cancel (claw back) awards where it sees fit to
align with remuneration policy and/or Company strategic outcomes.
D. How 2023 Reward was Linked to Performance
Performance Measures
The overall Company performance for 2023 is reflected in the performance measures below.
2023
$71.6m
$29.5m
2022
$91.8m
$45.1m
2021
$59.8m
$28.8m
2020
$49.3m
$15.4m
2019
$75.6m
$34.2m
306,896,245
9.6
309,873,237
14.6
276,605,346
10.4
279,530,868
5.5
283,605,019
12.1
10.6%
8.7
3%
10.7%
8.9
(54%)
13.9%
3.5
14%
8.0%
4.6
9%
14.0%
8.0
7%
Group EBITDA1
Net profit after tax (NPAT)1
Weighted average number of shares outstanding
Basic (NPAT) EPS (cents)
ROIC
Dividend paid to shareholders (cents per share)
Increase/(decrease) in share price (%)
(1) Continuing operations before significant items.
Performance and Impact on Remuneration
2023 TIP Award
ARN Media’s continuing operations EBITDA, EPS and ROIC performance in 2023 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 2023 TIP.
Performance for the 2023 financial year is outlined in the table below:
2023 TIP financial metrics
EBITDA performance
EPS performance
ROIC performance
Group: continuing operations
Between target and maximum;
78.3% of target achieved
Between target and maximum;
67.5% of target achieved
Between target and maximum;
70.0% 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:
ARN Media’s financial performance conditions in 2022 and 2023 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 2023 TIP outcomes:
TIP awarded
(cash incentive)
TIP awarded
1
(equity award)
Total TIP
awarded
% of
% of
% of
target
maximum
maximum
$
$
$
achieved
achieved
forfeited
Executive KMP
Ciaran Davis
Andrew Nye
164,398
72,354
164,398
72,354
328,796
144,708
23.8%
25.0%
17.3%
18.2%
82.7%
81.8%
(1) This differs from the accounting fair value of the equity award (included in section E, which is calculated in accordance with accounting standards and
expensed over two financial years, covering both the performance and service periods).
56
ARN Media Annual Report 2023
Remuneration Report
(Continued)
E. Total Remuneration for Executive KMP (statutory disclosure)
Details of the Executive KMP remuneration for 2023 and comparatives for 2022 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 F.
Post-
employment
Other
Performance-
related
Short-term benefits
benefits
long-term benefits
Total
proportion
Non-
Cash salary
and fees1
$
monetary
benefits2
$
Cash
incentives3
$
Super-
annuation4
$
Long
service
leave5
$
Fair
value
equity
awards6
$
$
%
1,123,300
1,099,208
49,705
37,440
164,398
155,250
25,895
24,430
21,274
60,444
165,558
586,851
1,550,130
1,963,623
559,916
566,278
1,098
938
72,354
66,844
25,895
24,430
6,811
3,869
72,168
234,276
738,242
896,635
1,683,216
1,665,486
50,803
38,378
236,752
222,094
51,790
48,860
28,085
64,313
237,726
821,127
2,288,372
2,860,258
21.3%
37.8%
19.6%
33.6%
20.7%
36.5%
Executive KMP
Ciaran Davis
2023
2022
Andrew Nye
2023
2022
Total
2023
2022
(1) Cash salary and fees include an accrual for annual leave entitlements. The value may change where a KMP’s annual leave balance changes as a result of taking
additional or less leave than the leave accrued during the year. 2022 has been revised to include a $40,723 reduction for Ciaran Davis as more leave was taken
than accrued in the year and an increase of $14,846 for Andrew Nye as less leave was taken than accrued in the year.
(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) 2023 superannuation benefit incorporates the change to the super guarantee from 1 July 2023.
(5)
(6)
Long service leave relates to amounts accrued during the year.
The fair value is derived using the closing share price on the grant date.
57
Remuneration Report
(Continued)
F. Actual Remuneration for 2023 (non-statutory disclosure)
The following section sets out the value of remuneration which has been received by Executive KMP for the 2023 performance year.
The figures in the following table are different to those shown in the statutory table in Section E 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 2023 is the value of the TIP that was granted
in 2022 and vested at the end of 2023 based on the share price at 31 December 2023, consistent with prior Remuneration Reports.
Executive KMP
Ciaran Davis
2023
2022
Andrew Nye
2023
2022
Total
2023
2022
TFR1
$
TIP
$
Vested
TIP2
$
Total
$
1,197,802
1,159,867
164,398
155,250
92,331
1,454,531
551,480
1,866,597
585,810
590,708
72,354
66,844
39,756
217,700
697,920
875,252
1,783,612
1,750,575
236,752
222,094
132,087
2,152,451
769,180
2,741,849
(1)
TFR comprises base salary including and accrual for annual leave entitlements, retirement benefits and other remuneration related costs. The value may change
where a KMP’s annual leave balance changes as a result of taking additional or less leave than the leave accrued during the year. 2022 has been revised to
include a $40,723 reduction for Ciaran Davis as more leave was taken than accrued in the year and an increase of $14,846 for Andrew Nye as less leave was
taken than accrued in the year.
(2) Vested TIP in 2023 includes the shares in relation to 2022 TIP that have now vested valued at the share price at vesting date.
58
ARN Media Annual Report 2023
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(Continued)
G. Contractual Arrangements with Executive KMP
Remuneration and other terms of employment for Executive KMP are formalised in employment contracts. All Executive KMP are employed under
contracts with substantially similar terms. The key elements of these employment contracts are summarised below:
Contract duration
Notice by individual/Company
Termination of employment (for cause)
Termination of employment (without cause)
Redundancy
Non-compete/restraint
Continuing
Employment may be terminated by either party. Notice periods vary
according to contractual terms: CEO & Managing Director – 12 months and
CFO – six months.
All contracts provide that employment may be terminated at any time
without notice for serious misconduct.
Where employment is terminated by the Company, payment may be
made in lieu of notice.
If the Company terminates the employment of an Executive KMP for
reasons of redundancy, a redundancy payment would be paid depending
on the length of their service. Benefits paid as defined by Corporations
Regulations 2001 Reg 2D.2.02 cannot exceed 12 months base salary
(average of past three years).
Payments for redundancy and accrued leave entitlements are not subject to
this cap.
Executive KMP are subject to non-compete provisions for the term of their
notice period.
H. 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 fees for 2023 provided to Non-executive Directors inclusive of superannuation are shown below:
Role
Board
Audit & Risk Committee
Remuneration, Nomination and Governance Committee
(1)
The Board Chair does not receive Committee fees.
2023
$
Chair fee1
Member fee
320,828
20,136
20,136
135,920
10,068
10,068
Other than the scheduled increase in the superannuation guarantee rate at 1 July 2024, there are no other changes to Non-executive Director
remuneration planned for 2024.
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 2023 and none is expected for 2024.
Details of the Non-executive Directors’ fees for 2023 and 2022 are set out in the table below:
Non-executive Directors
Hamish McLennan
2023
2022
Brent Cubis (from 14 June 2023)
2023
2022
Roger Amos (resigned 17 May 2023)
2023
2022
Paul Connolly
2023
2022
Belinda Rowe
2023
2022
Alison Cameron (from 5 January 2022)
2023
2022
Total
2023
2022
Fees
Superannuation
$
$
Total
$
294,708
278,857
77,362
–
57,500
150,000
150,000
150,000
140,909
140,909
131,818
127,435
852,297
847,201
26,120
24,430
8,472
–
6,038
15,375
16,125
15,375
15,148
14,098
14,170
13,073
86,073
82,351
320,828
303,287
85,834
–
63,538
165,375
166,125
165,375
156,057
155,007
145,988
140,508
938,370
929,552
60
ARN Media Annual Report 2023
Remuneration Report
(Continued)
I. Share-Based Remuneration
Terms and Conditions of Share-Based Remuneration
2023 TIP Awards
Executive KMP received a grant of rights under the 2023 TIP during 2023. Based on ARN Media’s performance, rights have been awarded at the
end of 2023 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
2023 rights that were awarded and remain unvested at the end of 2023.
Maximum
Value per
value to be
Executive
KMP
Ciaran Davis
Andrew Nye
Grant date1
30 January 2023
30 January 2023
Number
Number
Number
right at
recognised
of rights
of rights
of rights
grant date
in future years
Vesting Date
granted
awarded
forfeited
31 December 2024
672,042
159,610
31 December 2024
280,986
70,247
512,432
210,739
$
1.16
1.16
$
92,574
40,743
(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 2023 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
2021 TIP
2022 TIP
start of the
year
Exercised/
vested1
Exercised/
vested2
Balance at
Dividend
end of the
Awarded
uplift
year
568,536
81,200
649,736
224,433
34,963
259,396
792,969
116,163
909,132
(571,661)
–
(571,661)
(225,667)
–
(225,667)
81,200
(81,200)
–
34,963
(34,963)
–
(797,328)
116,163
–
(116,163)
(797,328)
–
3,1253
159,610
162,735
1,2343
70,247
71,481
4,359
229,857
234,216
11,131
21,878
33,009
4,793
9,630
14,423
15,924
31,508
47,432
92,331
181,488
273,819
39,756
79,877
119,633
132,087
261,365
393,452
(1) Held in trust until the end of the 2-year holding lock which is 31 Dec 2024 for the 2021 TIP, excluding additional rights as per note (3) below.
(2) Held in trust until the end of the 2-year holding lock which is 31 Dec 2025 for the 2022 TIP.
(3) Some of the shares purchased to satisfy the 2021 TIP obligations were purchased on market when ex-dividend. Consequently, KMP did not receive the dividend
paid in March 2023 in respect of these shares. 3,125 and 1,234 additional rights were issued to Ciaran Davis and Andrew Nye respectively as compensation for
missed dividend income. These rights vested immediately and are not subject to the same 2-year holding lock as the underlying rights.
61
Remuneration Report
(Continued)
J. 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:
Balance at start
of the year
TIP shares released1
Other changes
during the year
Balance at
end of the year
Non-executive Directors
Hamish McLennan
Brent Cubis2
Roger Amos3
Paul Connolly
Belinda Rowe
Alison Cameron4
Executive KMP
Ciaran Davis
Andrew Nye
73,000
–
16,250
65,935
–
35,934,891
1,329,403
57,185
–
–
–
–
–
–
–
–
–
39,034
–
–
–
–
3,1255
1,2345
73,000
39,034
16,250
65,935
–
35,934,891
1,332,528
58,419
(1) No award was made under the 2020 TIP.
(2) Brent Cubis became a Non-executive Director on 14 June 2023. The balance at start of the year in the table above is the number of shares held as at the
appointment date.
(3) Roger Amos ceased to be a Non-executive Director on 17 May 2023. The balance at the end of the year in the table above is the number of shares held at that
date.
(4) 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.
(5) Some of the shares purchased to satisfy the 2021 TIP obligations were purchased on market when ex-dividend. Consequently, KMP did not receive the dividend
paid in March 2023 in respect of these shares. 3,125 and 1,234 additional rights were issued to Ciaran Davis and Andrew Nye respectively as compensation for
missed dividend income. These rights vested immediately and are not subject to the same 2-year holding lock as the underlying rights.
K. 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
$18,750 director fees were paid to Belinda Rowe by the Company for services performed on the Board of Soprano Design Pty Limited in the first
quarter of 2023.
The Group paid $921,444 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 2023 AGM
The Company received more than 82.5% of ‘yes’ votes on its Remuneration Report for the 2022 financial year. No major remuneration-related
concerns were raised which required the Company’s attention during the 2023 financial year.
External Remuneration Consultants
During 2023, ARN Media engaged SW Corporate to provide high-level benchmarking data and advice regarding KMP retention schemes.
Auditor’s Independence Declaration
As lead auditor for the audit of ARN Media Limited for the year ended 31 December 2023, I declare
that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of ARN Media Limited and the entities it controlled during the period.
Eliza Penny
Partner
PricewaterhouseCoopers
Sydney
22 February 2024
63
Consolidated Financial Statements
About the Financial Statements
The financial statements are for the consolidated entity consisting of ARN Media Limited (Company ARN) 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 22 February 2024. 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 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 measured at fair value
through other comprehensive income and fair value through profit and loss.
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; and
• Note 2.3 Leases; and
Significant Events in the Current Reporting Period
Key talent contracts successfully renewed
On 22 November 2023, the Group announced the extensions of contracts for two top rating Breakfast shows in Sydney and Melbourne. Sydney’s
#1 rated FM breakfast show hosts Kyle and Jackie O were re-signed on 10-year contracts to the end of 2034, and Melbourne’s #1 rated FM
breakfast show host Christian O’Connell signed a 5-year contract, until the end of 2029.
Commence lease of premises in North Sydney
The Group commenced its lease agreement for new office premises in North Sydney. The lease for two floors of 40 Mount Street North Sydney
commencing in November 2023, with a lease for part of the ground floor to commence in November 2024. Construction of the new office space is
nearing completion and will be ready for occupation in the first quarter of 2024. Make good of the existing Sydney office at Macquarie Park will
commence in May, prior to completion of the lease in July 2024. Provision for make good costs are adequately reflected on the balance sheet.
Purchase of interest and Non-Binding Indicative Proposal for Southern Cross Media Limited (SCA)
The Group announced on 20 June 2023 that it had purchased a 14.8% interest in SCA for $38.9 million (including transaction costs). Refer to notes
3.4 and 5.3 for more information. The acquisition was reviewed by the Takeover Panel. In its decision released on 17 January 2024, the Panel
found that although unacceptable circumstances applied in relation to the acquisition of 6.83% of SCA shares, the Takeovers Panel also found that
ARN Media was able to retain the relevant 6.83% subject to certain conditions.
On 18 October 2023 ARN and Anchorage Capital Partners Pty Limited (ACP) (together Consortium) announced their non-binding indicative
proposal to acquire 100% of the fully diluted share capital of SCA through a scheme of arrangement. SCA shareholders would receive 0.753
ARN Media shares and 29.6 cents cash per SCA share if the proposal is accepted. The combined radio and television assets of ARN and SCA
would separate into independent ownership by each ARN and ACP as outlined in the indicative proposal. The proposed transaction is subject to a
number of conditions, including due diligence and regulatory approval, and there is no certainty that a transaction will eventuate.
Sale of Soprano Design Pty Limited
On 31 March 2023, the Group completed the sale of its 25% interest in Soprano Design Pty Limited (Soprano) to Potentia Capital (Potentia), a
leading Australian technology focused private equity firm. The Group received $66.3 million in cash as consideration for the sale of its entire
interest. Refer to note 6.1 for more information.
64
ARN Annual Report 2023
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
Note
1.1
1.1
1.2
1.3, 2.1
1.2
1.2
5.4
4.1
3.7
3.7
3.7
Revenue
Other revenue and income
Total revenue and other income
Expenses before impairment, finance costs, depreciation and amortisation
Impairment of intangible assets
Finance costs
Depreciation and amortisation
Share of profits of associates and joint ventures accounted for using the equity
method
Loss before income tax
Income tax credit
Loss for the year
Other comprehensive loss
Items that may be reclassified to profit or loss:
Net exchange difference on translation of foreign operations
Share of associate’s other comprehensive loss
Disposal of 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, net of tax
Total comprehensive loss
Profit/(Loss) for the year is attributable to:
Owners of the parent entity
Non-controlling interests
Loss for the year
Total comprehensive income/(loss) is attributable to:
Owners of the parent entity
Non-controlling interests
Total comprehensive loss
2023
$’000
334,292
43,909
378,201
(278,625)
(103,695)
(7,525)
(19,602)
5,061
2022
$’000
344,890
9,022
353,912
(275,914)
(251,798)
(5,911)
(20,200)
9,691
(26,185)
19,267
(190,220)
17,230
(6,918)
(172,990)
(19)
–
(43)
(44)
(163)
–
–
3.4, 5.4
(3,530)
(3,592)
(207)
(10,510)
(173,197)
1.4
(9,770)
2,852
(176,345)
3,355
(6,918)
(172,990)
(13,362)
2,852
(176,552)
3,355
(10,510)
(173,197)
Cents
Cents
Earnings per share
Basic/ diluted earnings per share
1.4
(3.2)
(56.9)
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Consolidated Balance Sheet
As at 31 December 2023
65
Current assets
Cash and cash equivalents
Receivables
Current tax asset
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.
Note
3.2
3.3(B)
6.1
3.4, 5.3
5.4
2.2
2.1
2.3
2.3
2.4
3.1
2.3
2.4
4.1(B)
3.5
3.7
3.7
2023
$’000
18,862
72,503
8,007
3,029
–
2022
$’000
23,852
65,652
–
4,068
23,788
102,401
117,360
36,004
35,392
63,451
332,468
62,868
3,744
533,927
636,328
32,466
3,279
6,551
–
13,130
677
33,327
49,138
437,309
35,807
857
557,115
674,475
30,912
5,435
8,823
4,083
14,527
55,426
63,780
93,582
63,054
10,532
97,367
264,535
319,961
316,367
1,544,039
(49,647)
(1,214,529)
279,863
36,504
316,367
84,394
29,555
8,269
129,072
251,290
315,070
359,405
1,547,690
(46,025)
(1,178,034)
323,631
35,774
359,405
66
ARN Annual Report 2023
Consolidated Statement of Cash Flows
For the year ended 31 December 2023
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
Note
2023
$’000
2022
$’000
365,148
(315,575)
781
1,960
(7,143)
(24,524)
–
383,907
(311,284)
51
313
(5,390)
(25,389)
(22,305)
Net cash inflow from operating activities
3.2
20,647
19,903
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 investment in associate and investments (net of costs to sell)
Payments for investments in associates and financial assets
Proceeds from sale of controlled entities
Acquisition of controlled entities
Net loans from/(to) associate
Dividends received from associate
Net cash inflow/(outflow) from investing activities
Cash flows from financing activities
Net proceeds from borrowings
Payments for borrowing costs
Principal elements of lease payments
Payments for treasury shares
Dividends paid to shareholders
Payments for share buyback
Net payments to non-controlling interests
Net cash outflow from financing activities
Change in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Effect of exchange rate changes
2.2
2.1
6.1
5.3
5.4
3.1
3.7
3.8
3.5
Cash and cash equivalents at end of the year
3.2
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
(19,871)
(973)
1,175
62,877
(39,857)
–
–
75
4,921
(7,923)
(345)
195
8,806
–
12,045
(239,106)
(45)
5,019
8,347
(221,354)
9,000
(108)
(10,107)
(216)
(26,781)
(3,651)
(2,122)
17,000
(266)
(12,854)
(1,470)
(27,648)
(2,339)
(4,294)
(33,985)
(31,871)
(4,991)
23,852
1
18,862
(233,322)
257,068
106
23,852
67
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Contributed
Accumulated
Non-
controlling
equity
Reserves
Note
$’000
$’000
losses
$’000
Total
interests
$’000
$’000
Total
equity
$’000
Balance at 1 January 2022
1,475,706
(45,078)
(974,183)
456,445
36,651
493,096
Profit/(Loss) for the year
Other comprehensive Income
Share-based payments
Contributions to equity
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
3.7
3.5
3.5
3.8
3.7
3.7
3.7
–
–
–
74,323
(2,339)
–
–
–
–
–
–
–
(207)
(560)
–
–
–
(142)
1,432
(1,470)
–
–
(176,345)
–
–
–
–
(27,648)
142
–
–
–
–
(176,345)
(207)
(560)
74,323
(2,339)
(27,648)
–
1,432
(1,470)
–
–
3,355
–
–
–
–
–
–
–
–
37
(4,269)
(172,990)
(207)
(560)
74,323
(2,339)
(27,648)
–
1,432
(1,470)
37
(4,269)
Balance at 31 December 2022
1,547,690
(46,025)
(1,178,034)
323,631
35,774
359,405
Balance at 1 January 2023
1,547,690
(46,025)
(1,178,034)
323,631
35,774
359,405
Profit/(Loss) for the year
Other comprehensive Income
Share-based payments
Share buy-back
Dividends paid to shareholders
Transfers within equity
Treasury shares vested to employees
Acquisition of treasury shares
Transactions with non-controlling
interests
3.7
3.5
3.8
3.7
3.7
3.7
–
–
–
(3,651)
–
–
–
–
–
–
(3,592)
101
–
–
(56)
141
(216)
–
(9,770)
–
–
–
(26,781)
56
–
–
–
(9,770)
(3,592)
101
(3,651)
(26,781)
–
141
(216)
–
2,852
–
–
–
–
–
–
–
(2,122)
(6,918)
(3,592)
101
(3,651)
(26,781)
–
141
(216)
(2,122)
Balance at 31 December 2023
1,544,039
(49,647)
(1,214,529)
279,863
36,504
316,367
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
68
ARN Annual Report 2023
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
Gain on sale from equity accounted investments
Dividend income
Other
Other income
Interest income
Total interest and other income
Total revenue and other income
Note
2023
$’000
2022
$’000
334,292
334,292
–
39,132
781
2,036
41,949
1,960
43,909
344,890
344,890
5,292
–
51
3,361
8,704
318
9,022
378,201
353,912
Revenue recognised in the year ended 31 December 2023 that was included in the contract liabilities balance as at 1 January 2023 is $4.8
million (2022: $4.8 million).
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
Advertising
revenue
(Regional, Metro,
Digital and Other)
ARN & HK
Outdoor
Segment
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.
The Group acts as principal for most services rendered with the exception of some podcast and streaming contracts, which the Group performs an
assessment of 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 year ending 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
ARN Annual Report 2023
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
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
Borrowing costs amortisation
Total finance costs
Depreciation – right-of-use assets
Depreciation – other assets
Amortisation
Note
1.3
2.3
2.3
2.2
2.1
2023
$’000
175,814
22,573
39,659
11,047
8,163
6,193
4,019
–
–
11,157
2022
$’000
166,890
19,375
46,460
11,886
5,437
4,958
3,819
5,334
888
10,867
278,625
275,914
2,138
5,092
295
7,525
11,382
6,112
2,108
1,899
3,600
412
5,911
11,623
6,178
2,399
Total depreciation and amortisation
19,602
20,200
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. The Group determined there were three operating segments being ARN, HK
Outdoor and Investments.
Reportable segment Principal activities
ARN
HK Outdoor
Investments
Metropolitan and Regional radio networks, on-demand radio, streaming and podcasting (Australia), including equity
accounted investment in Nova Entertainment (Perth) Pty Ltd.
Billboard, transit and other outdoor advertising (Hong Kong)
Includes controlling interests in Emotive Pty Limited (creative agency) and investment in Southern Cross Austereo
Media Group Limited(SCA). Prior to its sale this segment included equity accounted investment in Soprano Design Pty
Limited (Soprano) a software vendor for secure messaging services. On 31 March 2023, the Group completed the
sale of its 25% interest in Soprano.
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 2023 is as follows:
2023
$’000
Revenue
Metro
Regional
Digital
Other
Revenue from contracts with customers
Share of profits of associates
Segment result
Segment assets
Segment liabilities
HK
Group
ARN
Outdoor
Investments Corporate
elimination
Total
182,766
104,394
19,813
–
306,973
5,061
72,229
559,904
107,277
–
–
–
15,784
15,784
–
6,601
13,844
7,917
–
–
–
11,589
11,589
–
2,531
44,848
7,115
–
–
–
–
–
(9,792)
17,732
197,652
–
–
–
(54)
(54)
–
–
–
–
Reconciliation of segment result to profit before income tax
Segment result
Depreciation and amortisation A
Net finance costs
Implementation of software as a service (SaaS) products B
Integration costs C
Gain on sale of asset held for sale D
Talent sign-on fees E
ATO other income F
Regulatory fees and acquisition costs G
Impairment on intangible assets
Loss before income tax
Explanation of statutory adjustments
(A) Consists of depreciation of $17.5 million and amortisation of $2.1 million.
(B) Relates to one off expenditure for new systems implemented.
(C) Costs relating to the integration of ARN Regional and ARN Metro.
(D) Gain on sale of Soprano less costs of sale. Refer to note 6.1.
(E) One-off sign on fees for key talent renewals.
(F)
(G) Regulatory fees and SCA acquisition transaction costs associated with the proposed acquisition of SCA.
Finalisation of account balances post settlement with the ATO.
182,766
104,394
19,813
27,319
334,292
5,061
71,569
636,328
319,961
71,569
(19,602)
(5,565)
(2,953)
(1,657)
39,132
(2,500)
269
(1,183)
(103,695)
(26,185)
72
ARN Annual Report 2023
Notes to the Consolidated Financial Statements
(Continued)
1.3 Segment Information (Continued)
2022
$’000
Revenue
Metro
Regional
Digital
Other
Revenue from contracts with customers
Share of profits of associates
Segment result
Segment assets
Segment liabilities
HK
Group
ARN
Outdoor
Investments
Corporate
elimination
Total
192,524
107,687
14,600
–
314,811
5,291
86,549
609,696
71,961
–
–
–
19,487
19,487
–
8,750
19,243
14,253
–
–
–
10,997
10,997
4,400
5,949
33,759
7,648
–
–
–
–
–
–
(9,452)
11,777
221,208
–
–
–
(405)
(405)
–
–
–
–
Reconciliation of segment result to profit before income tax
Segment result
Depreciation and amortisation A
Net finance costs
ARN Regional acquisition costs B
Loss on disposal of 4KQ C
Implementation of software as a service (SaaS) products D
Integration costs E
Impairment on 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
Transaction costs associated with the acquisition of ARN Regional.
(B)
(C)
Impairment of $1.9 million, PP&E disposal of $0.4 million and sale costs of $0.5 million recognised on the sale of 4KQ.
(D) Relates to one off expenditure for new systems implemented.
(E) Costs relating to the integration of ARN Regional and ARN Metro.
(F) Gain recognised on fair value uplift of the Group’s investment in Lux Group Limited.
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
$318.5 million (2022: $325.4 million) and in Asia is $15.8 million (2022: $19.5 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 $528.7 million (2022: $548.8 million) and in Hong Kong is $5.3 million (2022: $8.3 million).
Segment assets are allocated to countries based on where the assets are located.
192,524
107,687
14,600
30,079
344,890
9,691
91,796
674,475
315,070
91,796
(20,200)
(5,593)
(5,334)
(2,795)
(452)
(3,043)
(249,891)
5,292
(190,220)
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 attributable to owners of the parent entity
2023
$’000
2022
$’000
(9,770)
(176,345)
Loss attributable to owners of the parent entity used in calculating basic/diluted EPS
(9,770)
(176,345)
(b) Weighted average number of shares
Weighted average number of shares used as the denominator in calculating basic EPS
Adjusted for calculation of diluted EPS:
Unvested/unexercised rights
Number
Number
306,896,245
309,873,237
794,166
45,499
Weighted average number of shares used as the denominator in calculating diluted EPS
307,690,411
309,918,736
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
ARN Annual Report 2023
Notes to the Consolidated Financial Statements
(Continued)
2. Operating Assets and Liabilities
2.1 Intangible Assets
2022
$’000
Cost (net of impairment)
Accumulated amortisation
Net book amount
Movements
Opening net book amount
Additions
Acquisition of subsidiary
Disposals
Transfers and other adjustments
Amortisation
Impairment charge *
2023
$’000
Cost (net of impairment)
Accumulated amortisation
Net book amount
Movements
Opening net book amount
Additions
Transfers and other adjustments
Amortisation
Impairment charge *
Goodwill
Software
relationships
Customer
490
–
490
490
–
156,770
–
–
–
(156,770)
4,096
(2,940)
1,156
1,316
345
–
–
(1)
(504)
–
Radio
licences
402,313
(4,711)
Brands
25,751
–
Total
444,960
(7,651)
12,310
–
12,310
397,602
25,751
437,309
–
–
16,622
–
–
(1,662)
(2,650)
370,807
–
125,555
(11,693)
–
(233)
(86,834)
–
–
31,295
–
–
–
(5,545)
372,613
345
330,242
(11,693)
(1)
(2,399)
(251,798)
Goodwill
Software
relationships
Customer
490
–
490
490
–
–
–
–
5,072
(3,462)
1,610
1,156
973
(11)
(508)
–
Radio
licences
307,442
(4,943)
Brands
19,558
–
Total
340,873
(8,405)
8,311
–
8,311
302,499
19,558
332,468
12,310
–
–
(1,367)
(2,632)
397,602
–
–
(233)
(94,870)
25,751
–
–
–
(6,193)
437,309
973
(11)
(2,108)
(103,695)
Closing net book amount
490
1,156
12,310
397,602
25,751
437,309
Closing net book amount
*
1,610
Impairment charge relates to $103.7 million for the ARN CGU (2022: $249.9 million for the ARN CGU and $1.9 million for radio licenses
recognised on the sale of 4KQ).
302,499
19,558
8,311
490
332,468
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
Useful life
Indefinite
10 years
Indefinite
3-5 years
Indefinite
20 years
Amortisation
Acquired or
method
Internally generated
No amortisation
Straight-line basis
No amortisation
Straight-line basis
No amortisation
Straight-line basis
Acquired
Acquired
Acquired
Internally generated
and acquired
Acquired
Acquired
Goodwill
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. 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 whether costs 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
ARN Annual Report 2023
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 2023. 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
cash generating units (CGUs) as at period-end, subsequent to the impairment test:
amortising intangible assets to
Name of CGU
ARN
Emotive
Total goodwill and other non-amortising intangible assets
‑
2023
Other non-
amortising
2022
Other
2022
non
amortising
2023
Goodwill
intangible assets
Goodwill
intangible assets
‑
$’000
–
490
490
$’000
$’000
319,161
–
319,161
–
490
490
$’000
420,224
–
420,224
At 31 December 2023 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 2023 an impairment of $103.7 million was recorded in the ARN CGU and apportioned across intangible assets as follows: radio
licenses were impaired by $94.9 million, brands were impaired by $6.2 million and customer relationships were impaired by $2.6 million. The
impairment reflects the estimated impacts of the current macro-economic environment on future advertising revenues partially offset by a reduction
in the ARN CGU discount rate.
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 2023, 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
Years 2, 3, 4 and 5
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 prepared based on management’s current assessment for each CGU, with 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 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 optimising a
national network of metropolitan and regional radio stations; and
expenses are forecast in detail 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 5.2% 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 2023
Post-tax
Dec 2023
Dec 2023
Pre-tax
Long-term
Dec 2022
Post-tax
Dec 2022
Dec 2022
Pre-tax
Long-term
discount rate
discount rate
growth rate
discount rate
discount rate
growth rate
10.00%
13.6%
1.5%
10.25%
14.0%
1.5%
78
ARN Annual Report 2023
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 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 2023, an impairment loss of $103.7 million was recorded against the radio licences, customer relationships, and brands in the
ARN CGU, reflecting a recoverable amount of $332.0 million. 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 the estimated impacts of the current macro-economic environment on future advertising revenues partially
offset by a reduction in the ARN CGU discount rate.
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 as follows;
•
•
•
0.25% increase in the post-tax discount rate;
0.5% 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
10.0%
1.5%
5.2%
Change to
To
carrying value
10.25%
1.0%
3.0%
(13,424)
(18,562)
(58,132)
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
ARN Annual Report 2023
Notes to the Consolidated Financial Statements
(Continued)
2.2 Property, Plant and Equipment
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
Disposals
Foreign exchange differences
Closing net book amount
2023
$’000
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
Disposals
Foreign exchange differences
Closing net book amount
Freehold land
Buildings
equipment
Plant and
11,464
–
–
11,464
423
11,341
–
–
–
(300)
–
8,422
(612)
–
7,810
278
7,992
37
(411)
22
(108)
–
90,329
(65,615)
5,150
29,864
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
Freehold land
Buildings
equipment
Plant and
11,206
–
–
11,206
11,464
–
–
2
(260)
–
8,419
(898)
–
7,521
7,810
876
(347)
(2)
(816)
–
66,765
(41,378)
19,337
44,724
29,864
20,640
(5,765)
152
(165)
(2)
Total
86,390
(42,276)
19,337
63,451
49,138
21,516
(6,112)
152
(1,241)
(2)
11,206
7,521
44,724
63,451
The Group had capital commitments of $3.0 million as at 31 December 2023 (2022: $nil).
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:
•
•
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.
plant and equipment: 3-30 years; and
buildings: 20–50 years;
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
ARN Annual Report 2023
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 15.2 years (2022: 9.2 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
Additions to the right-of-use assets during the 2023 financial year were $38.3 million (2022: $22.7 million).
2023
$’000
58,544
3,303
1,021
62,868
6,551
63,054
69,605
2022
$’000
29,318
5,621
868
35,807
8,823
29,555
38,378
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
measurement of the lease liability
The total cash outflow for leases, inclusive of principal and interest was $12.2 million (2022: $14.8 million).
2023
$’000
6,925
4,387
70
11,382
2,138
1,296
2022
$’000
6,106
5,233
284
11,623
1,899
1,625
659
968
83
Notes to the Consolidated Financial Statements
(Continued)
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
ARN Annual Report 2023
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 initial direct costs; and
restoration costs.
any lease payments made at or before the commencement date, less any lease incentives received;
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
equipment and small items of office furniture.
value assets comprise IT
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
loss.
line basis as expense in profit or
‑
‑
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
2023
$’000
10,351
1,733
1,046
13,130
2,447
8,085
10,532
Movements in each class of provision during the financial year, other than employee benefits, are set out below:
2023
Carrying amount at beginning of the year
Additional amounts recognised
Amounts used
Reversal
Carrying amount at end of the year
Make good
$’000
8,668
1,709
(121)
(438)
9,818
Other
$’000
50
1,046
–
(50)
1,046
85
2022
$’000
11,862
2,615
50
14,527
2,216
6,053
8,269
Total
$’000
8,718
2,755
(121)
(488)
10,864
86
ARN Annual Report 2023
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
87
(Continued)
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 debt
Note
3.2
2023
$’000
94,000
94,000
2,414
(1,996)
418
93,582
93,582
418
(18,862)
75,138
2022
$’000
85,000
85,000
2,470
(1,864)
606
84,394
84,394
606
(23,852)
61,148
(i)
As of February 2024, the majority of the Group’s debt facilities do not expire until after December 2026.
The Group’s debt facilities have a maximum leverage covenant of 3.25 times and a minimum interest cover covenant of 3.0 times.
As at 31 December 2023 the leverage ratio was 1.26 times and the interest cover ratio was 13.87 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 maintains an optimal capital structure to reduce its cost of capital.
adjust dividends paid to shareholders;
In order to maintain an optimal capital structure, the Group may:
•
•
•
•
return capital to shareholders;
sell assets to reduce debt.
issue new shares; or
(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
(i)
(ii)
Pertaining to the revolving cash advance facility.
Relating to bank loan and guarantees drawn (refer to note 6.2).
2023
$’000
199,400
(99,432)
99,968
1,500
–
1,500
2022
$’000
229,397
(87,853)
141,544
1,550
–
1,550
88
ARN Annual Report 2023
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 on 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
18,862
23,852
2023
$’000
2022
$’000
The below reconciliation relates to both continued and discontinued operations.
Reconciliation of loss for the year to net cash inflows from operating activities:
Loss 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
Share-based payments expense
Gains on sale of assets held for sale and financial assets
Net gain/(loss) on sale of non-current assets
Fair value losses 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
(6,918)
19,602
295
(5,061)
(141)
103,695
242
(39,132)
63
–
(2,992)
(1,845)
(43,791)
(3,370)
20,647
(172,990)
20,200
412
(9,691)
263
251,798
873
(5,292)
(29)
(63)
3,644
(1,487)
(50,278)
(17,457)
19,903
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 2023, a change in interest rates of +/- 1% per annum with all other variables
being constant would impact equity and post-tax profit by $0.5 million lower/higher.
(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 6.2 for details).
For banks and financial institutions, 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 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
ARN Annual Report 2023
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:
Trade receivables
Loss allowance
Other receivables
Total receivables
Note
2023
$’000
64,546
(641)
63,905
8,598
72,503
The loss allowance determined for trade receivables as at 31 December 2023 and 31 December 2022 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
2023
$’000
519
254
–
(132)
641
2023
$’000
56,467
6,147
1,575
113
244
64,546
2022
$’000
60,895
(519)
60,376
5,276
65,652
2022
$’000
269
(18)
373
(105)
519
2022
$’000
55,984
2,858
1,435
274
344
60,895
ACCOUNTING POLICY
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 $100.0 million in undrawn facilities at 31 December 2023, 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.
2022
Non-derivative Financial Liabilities
Payables
Bank Loans
Lease Liabilities
Note
3.1
2.3
Total non-derivatives
Less: interest
Total financial liabilities
2023
Non-derivative Financial Liabilities
Payables
Bank Loans
Lease Liabilities
Note
3.1
2.3
Total non-derivatives
Less: interest
Total financial liabilities
Less than
Between one and
Between two and
one year
$’000
two years
$’000
five years
Over five years
$’000
$’000
30,912
4,059
9,984
44,955
(4,059)
40,896
–
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
Less than
Between one and
Between two and
one year
$’000
two years
$’000
five years
Over five years
$’000
$’000
32,466
5,721
10,238
48,425
(5,721)
42,704
–
5,721
7,767
13,488
(5,721)
7,767
–
97,207
16,662
113,869
(3,208)
110,661
–
–
74,188
74,188
–
74,188
3.4 Fair Value Measurements
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis:
•
•
financial assets at fair value through other comprehensive income.
financial assets at fair value through profit or loss; and
Fair value hierarchy
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:
•
•
•
level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
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 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
92
ARN Annual Report 2023
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 2022 and 2023:
2022
Recurring fair value measurements
Financial assets
Financial assets at fair value through profit or loss
Note
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
Shares in other corporations
5.3
Total financial assets
–
–
–
–
677
677
677
677
2023
Recurring fair value measurements
Financial assets
Financial assets at fair value through profit and loss
Shares in other corporations
Financial assets at fair value through other comprehensive
income
Shares in other corporations
Total financial assets
Note
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
5.3
–
5.3
35,331
35,331
–
–
–
673
673
–
35,331
673
36,004
During the period, the Group purchased shares in Southern Cross Media Limited (SCA) for $38.9 million (including transaction costs). The shares are
held at fair value through other comprehensive income. As SCA is listed on the Australian Stock Exchange (ASX), the fair value of the shares is
determined by reference to the quoted price. The investment in SCA was revalued as at 31 December 2023, and a $3.5 million fair value loss,
was recognised in the other comprehensive income.
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
of bank loans approximates the carrying amount.
term nature. The fair value
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
‑
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 2023, the borrowing rates were determined to be between 2.3% and 8.0% per annum,
depending on the type of lease.
There were no other material level 3 fair value movements during the year.
93
Notes to the Consolidated Financial Statements
(Continued)
3.5 Contributed Equity
Issued and paid up share capital
2023
$’000
2022
$’000
1,544,039
1,547,690
(A) Movements in contributed equity during the financial year
Balance at beginning of the year
Issue of ordinary shares(i)
Share buy-back (ii)
Balance at end of the year
2023
2022
Number shares
Number shares
309,080,602
7,562,190
(3,592,419)
275,154,900
35,934,891
(2,009,189)
2023
$’000
1,547,690
–
(3,651)
2022
$’000
1,475,706
74,323
(2,339)
313,050,373
309,080,602
1,544,039
1,547,690
(i)
In 2023, shares were issued in relation to talent awards in the year.
(ii) During 2023, the Company purchased and cancelled on-market 3.6 million shares (2022: 2.0 million). The shares were acquired at an average price of $1.02
per share (2022: $1.16).
(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
ARN Annual Report 2023
Notes to the Consolidated Financial Statements
(Continued)
3.6 Share-Based Payments
As at 1 January
Awarded
Exercised
Other changes
2023
2022
Number of
Number of
rights
971,912
7,796,752
(860,454)
47,432
rights
788,896
107,086
–
75,930
Balance at end of the year
7,955,642
971,912
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)
2023 TIP and incentive award (3)
Talent awards (4)
Talent awards (4)
Balance at end of the year
Vesting date
31-Dec-22
31-Dec-23
31-Dec-24
31-Dec-29
31-Dec-34
Weighted
average fair
value
$2.01
$1.95
$1.16
$0.81
$0.95
Weighted average remaining contractual life of rights outstanding at end of period
Number of rights
2023
–
132,087
261,365
1,239,858
6,322,332
2022
855,749
116,163
–
–
–
7,955,642
971,912
2023
9.7 years
2022
0.1 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 was 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. An additional 66,853 rights were issued to satisfy this
requirement. This is disclosed in other changes above in the prior year comparative. Some of the shares purchased to satisfy the 2021 TIP obligations were
purchased on market when ex-dividend. Consequently, participants did not receive the dividend paid in March 2023 in respect of these shares. 4,705
additional rights (included in awarded) were issued to participants as compensation for missed dividend income. These rights vested immediately (included in
exercised) and are not subject to the same 2-year holding lock as the underlying rights.
(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. Some performance
conditions were met on 31 December 2022 and approved on 15 February 2023. At the Board's discretion, the participants may receive 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. An
additional 9,077 rights were issued to satisfy this requirement in 2022 and a further 15,924 in 2023. This is disclosed in other changes above in the respective
years.
(3) The date on which the fair value of the 2023 TIP rights were calculated, is the deemed grant date of the rights for accounting purposes. Some performance
conditions were met on 31 December 2023 and approved on 14 February 2024. At the Board’s discretion, the participants may receive 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. An
additional 31,508 rights were issued to satisfy this requirement. This is disclosed in other changes above.
(4) There was no expense recognised in relation to Talent awards in the year. Share based payment expense will be recognised on commencement of the renewed
contracts on 1 January 2025.
Share-based payments expense related to the above tables for the year was $242,000 (2022: $872,000).
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.
95
Notes to the Consolidated Financial Statements
(Continued)
ACCOUNTING POLICY
Share-based compensation benefits are provided to employees and contractors via share-based payments as part of a Total Incentive
Plan (TIP), talent 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.
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
Disposal of share of associate’s other comprehensive loss
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
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
2023
$’000
806
8,039
(3,530)
(53,283)
(1,679)
2022
$’000
868
7,994
–
(53,283)
(1,604)
(49,647)
(46,025)
868
(19)
–
(43)
806
7,994
242
(56)
(141)
8,039
–
(3,530)
(3,530)
(53,283)
(53,283)
(1,604)
(216)
141
(1,679)
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)
96
ARN Annual Report 2023
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 6.5.
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 interest reserve
The transactions with non-controlling interests 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 203,645 (2022: 788,896 )
additional shares in the Company. Employees were issued with 120,660 shares during the year (2022: 850,772). The total shareholding in the
Company as at 31 December 2023 was 987,836 shares at an average price of $1.70 (2022: 904,851 shares at $1.77). This shareholding is
disclosed as treasury shares and deducted from equity.
Performance rights that relate to the 2021 and 2022 TIP have vested and converted into shares.
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 attributable to owners of the parent entity
Transfer from reserves
Dividends paid to shareholders
Balance at end of the year
2023
$’000
(1,178,034)
(9,770)
56
(26,781)
2022
$’000
(974,183)
(176,345)
142
(27,648)
(1,214,529)
(1,178,034)
97
Notes to the Consolidated Financial Statements
(Continued)
3.8 Dividends
Dividend of 5.2 cents per share fully franked (Final dividend for the year ended 31
December 2021: 3.9)
Paid in cash
Interim dividend for the year ended 31 December 2023 of 3.5 cents per share fully franked
(2022: 5.0)
Paid in cash
Total dividends
Franking credit balance available as at 31 December (at 30% corporate tax rate)
Dividends not recognised at year end
Subsequent to year end, the Directors have declared a fully franked dividend of 3.6 cents
per share. The aggregate amount of the dividend expected to be paid on 22 March 2024
but not recognised as a liability at year end is:
(i) Paid from parent entity profits since 1 January 2023.
2023
$’000
16,072(i)
16,072
10,709
10,709
26,781
101,986
2022
$’000
12,133
12,133
15,515
15,515
27,648
87,690
11,270
16,072(i)
98
ARN Annual Report 2023
Notes to the Consolidated Financial Statements
(Continued)
4. Taxation
4.1 Income Tax and Deferred Tax
(A) Income tax
Current tax expense
Deferred tax benefit
Adjustment for current tax of prior periods
Income tax benefit
Income tax expense differs from the prima facie tax as follows:
Loss before income tax benefit
Prima facie income tax at 30%
Difference in international tax treatments and rates
Non-deductible acquisition costs
Non-deductible impairment charge
Capital losses utilised against the gain on disposal of investment in Soprano and Luxury
Escapes
Unrecognised tax losses/(tax losses realised)
Share of profits of associates
Adjustment for current tax of prior periods
Capital losses utilised against the sale of 4KQ
Other
2023
$’000
12,119
(32,387)
1,001
2022
$’000
11,967
(27,211)
(1,986)
(19,267)
(17,230)
(26,185)
(7,855)
78
–
–
(11,740)
96
(1,518)
1,001
–
671
(190,220)
(57,066)
(103)
84
47,031
(2,641)
(126)
(2,907)
(1,986)
(569)
1,053
Income tax benefit
(19,267)
(17,230)
99
Notes to the Consolidated Financial Statements
(Continued)
4.1 Income Tax and Deferred Tax (Continued)
(A) Income Tax (Continued)
Capital Losses - Australia
ARN is carrying forward $182 million in capital losses. 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.
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.
100
ARN Annual Report 2023
Notes to the Consolidated Financial Statements
(Continued)
4.1 Income Tax and Deferred Tax (Continued)
(B) Deferred tax assets and liabilities
2022
Employee benefits
Doubtful debts
Accruals/restructuring
Capital losses
Intangible assets
Depreciation
Right-of-use assets
Lease liabilities
Investments accounted for
using the equity method
Shares in other corporations
Other
2023
Employee benefits
Doubtful debts
Accruals/restructuring
Intangible assets
Depreciation
Right-of-use assets
Lease liabilities
Investments accounted for
using the equity method
Other
Recog-
nised in
Acquisitio
Recog-
Balance
profit
n of ARN
nised in
1 Jan 22
or loss
Regional
$’000
2,161
79
2,296
–
(110,234)
1,421
(4,603)
6,297
(7,796)
(1,052)
181
(111,250)
$’000
59
(36)
137
–
29,007
(26)
156
(426)
(274)
(1,586)
200
27,211
$’000
1,916
112
2,191
–
(52,042)
(1,908)
(4,081)
3,338
–
–
(149)
(50,623)
equity
$’000
–
–
–
–
–
–
–
–
–
–
(275)
(275)
Other
move-
ments
$’000
–
–
72
3,210
2,939
(316)
–
–
–
(3)
(37)
5,865
Balance
Offset
31 Dec 22
$’000
–
–
–
(3,210)
569
–
–
–
–
2,641
–
$’000
4,136
155
4,696
–
(129,761)
(829)
(8,528)
9,209
(8,070)
–
(80)
–
(129,072)
Balance
1 Jan 23
$’000
4,136
155
4,696
(129,761)
(829)
(8,528)
9,209
(8,070)
(80)
(129,072)
Recognised in
profit
Recognised in
Other
Balance
or loss
$’000
(395)
33
742
31,519
998
(10,273)
10,331
(5)
(563)
32,387
equity
movements
31 Dec 23
$’000
$’000
–
–
–
–
–
–
–
–
4
4
–
–
(197)
–
(434)
–
–
–
(55)
(686)
$’000
3,741
188
5,241
(98,242)
(265)
(18,801)
19,540
(8,075)
(694)
(97,367)
The Group has not recognised deferred tax assets of $5.7 million (2022: $5.8 million) in respect of HK Outdoor tax losses carried forward.
10 1
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.
ARN Media 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 ARN 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, ARN Media 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.
102
ARN Annual Report 2023
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 6.5.
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
AmplifyCBR 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
Digital Radio Broadcasting Darwin Pty Ltd 1, 2, 4
Double T Radio Pty Ltd 1
Country of
incorporation/
establishment
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
Australia
Australia
Equity holding
2023
2022
%
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
100
100
%
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
100
100
Notes to the Consolidated Financial Statements
(Continued)
10 3
Name of entity
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
ARN Media Finance Pty Ltd 1, 2
ARN Media International Pty Ltd 1, 2
HT&E Online (Australia) Pty Ltd 1
ARN Media 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
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
Country of
incorporation/
establishment
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
Australia
Australia
Australia
Equity holding
2023
2022
%
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
100
100
100
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
100
100
100
100
100
104
ARN Annual Report 2023
Notes to the Consolidated Financial Statements
(Continued)
Name of entity
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
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Equity holding
2023
2022
%
50
100
100
100
100
100
100
100
100
100
100
100
%
50
100
100
100
100
100
100
100
100
100
100
100
(1)
(2)
(3)
(4)
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.
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.
This company is proportionately consolidated and its principal activities are commercial radio. Refer to note 5.4.
These companies acquired in 2023 entered the Assumption Deed which provides for the joining of each company to the Deed of Cross Guarantee dated 28
April 2017.
10 5
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 is
equal to the voting rights held by the Group.
Place of
Ownership interest
Ownership interest held
business and country of
held by the Group
by non-controlling
incorporation
interests
2023
2022
2023
2022
Principal
Name of entity
Brisbane FM Radio Pty Ltd
Australia
50%
50%
50%
50%
activities
Commercial
radio
(B) Non-controlling interests
Financial information for each subsidiary that has non-controlling interests that are material to the Group are summarised in the table below. 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 decrease in cash and cash equivalents
2023
$’000
8,154
725
7,429
67,456
46
67,410
74,839
37,419
21,213
4,791
–
4,791
2,396
3,670
5,663
(97)
(5,812)
(246)
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)
106
ARN Annual Report 2023
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
2023
$’000
36,004
2022
$’000
677
The Group purchased a 14.8% share in Southern Cross Media Group Limited (SCA) and designated the investment as fair value through other
comprehensive income and not classified as held for sale. The investment in SCA was revalued as at 31 December 2023, with the resulting $3.5
million fair value loss recognised in other comprehensive income. Refer to note 3.4 for more information on determining the fair value.
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.
10 7
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
Note
2023
$’000
35,392
35,392
5,061
2022
$’000
33,327
33,327
9,691
Set out below are the associate and joint ventures of the Group as at 31 December 2023. 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.
Place of
business/
country of
Ownership
interest
Nature of
Measurement
Name of entity
incorporation
2023
2022
relationship
method
3 Keys Records Pty Ltd
Soprano Design Pty Limited
Nova Entertainment (Perth) Pty
Ltd
Australia
Australia
Australia
35%
0%
50%
0%
25%
50%
Associate1
Associate2
Associate3
Equity method
Equity method
Equity method
Consolidated
carrying values
2023
$’000
1,698
–
33,694
2022
$’000
–
33,327
The Group acquired a 35% stake in 3 Keys Records Pty Ltd in 2023.
(1)
(2) On 31 March 2023, the Group completed the sale of its 25% interest in Soprano Design Pty Limited (Soprano) to Potentia Capital (Potentia).
(3) 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
Acquisition
Share of profit
Share of reserves
Dividend received
Reclassification of associate to asset held for sale
Other
Total investments accounted for using the equity method
Note
6.1
2023
$’000
33,327
2,000
5,061
–
(4,921)
–
(75)
35,392
2022
$’000
52,561
–
9,691
(163)
(5,019)
(23,788)
45
33,327
108
ARN Annual Report 2023
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.
10 9
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
Share-based payments reserve
Retained earnings
Closing profit reserve
Closing loss reserve
Total equity
Profit/(Loss) for the year
Total comprehensive profit/(loss)
2023
$’000
2022
$’000
8,368
675,975
142
385,031
290,944
1,544,039
384
649,203
4,130
522,376
126,827
1,547,690
8,039
7,994
168,459
(1,429,593)
736
(1,429,593)
290,944
194,509
194,509
126,827
(130,912)
(130,912)
(B) Guarantees entered into by the parent entity
Refer to note 6.2 for details.
(C) Contingent liabilities and contractual commitments of the parent entity
The parent entity did not have any contingent liabilities as at 31 December 2023 (2022 $nil) and did not have any contractual commitments as at
31 December 2023 (2022: $nil).
ACCOUNTING POLICY
The financial information for the parent entity, ARN Media 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.
110
ARN Annual Report 2023
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 2023 for the Closed Group:
Revenue
Other revenue and income
Expenses from operations before impairment, finance costs, depreciation and amortisation
Impairment of Group company investments
Impairment of intangibles
Finance costs
Depreciation and amortisation
Share of profits of associate and joint ventures
Loss before income tax
Income tax benefit
Loss attributable to owners of the parent entity
Accumulated losses
Balance at beginning of the year
Loss attributable to owners of the parent entity
Dividends paid to shareholders
Transfers between reserves
Balance at end of the year
2023
$’000
278,129
157,058
(244,560)
(119,992)
(103,695)
(109,758)
(13,137)
5,061
2022
$’000
284,730
14,023
(236,447)
(1,919)
(251,798)
(4,918)
(12,820)
9,691
(150,894)
21,876
(199,458)
19,776
(129,018)
(179,682)
(1,296,139)
(129,018)
(26,781)
56
(1,088,951)
(179,682)
(27,648)
142
(1,451,882)
(1,296,139)
111
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 2023 for the Closed Group:
Current assets
Cash and cash equivalents
Receivables
Tax assets
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
2023
$’000
11,704
67,788
8,004
2,251
–
89,747
71,980
35,392
61,202
56,151
255,659
3,093
483,477
2022
$’000
16,941
172,585
–
3,337
23,788
216,651
157,889
57,115
46,649
25,952
360,747
209
648,561
573,224
865,212
26,889
1,732
3,407
–
12,395
44,423
93,582
59,330
10,061
97,602
260,575
304,998
268,226
165,615
909
4,487
4,125
13,730
188,866
84,394
23,660
7,829
129,238
245,121
433,987
431,225
1,544,039
176,069
(1,451,882)
268,226
1,547,690
179,674
(1,296,139)
431,225
268,226
431,225
112
ARN Annual Report 2023
Notes to the Consolidated Financial Statements
(Continued)
6. Other
6.1 Disposals
Soprano Sale
On 31 March 2023, the Group completed the sale of its 25% interest in Soprano Design Pty Limited (Soprano) to Potentia Capital (Potentia), a
leading Australian technology focused private equity firm. The Group received $66.3 million in cash as consideration for the sale of its entire
interest.
At 31 December 2022 the Group had determined that its interest in Soprano should be held as an asset held for sale at its carrying value of
$23.8 million. The gain on sale recognised, net of costs to sell was $39.1 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.
6.2 Contingent Liabilities
The parent entity and all wholly-owned controlled entities have provided guarantees in respect of banking facilities. As at 31 December 2023, the
facilities had been drawn to the extent of $99.4 million (2022: $87.9 million), of which $5.4 million (2022: $2.9 million) of the balance pertains to
bank guarantees.
The Group did not have any other contingent liabilities and unrecognised capital contractual commitments as at 31 December 2023 (2022: $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.
Commitments
The Group has committed to leasing part of the ground floor liability premises in North Sydney starting in November 2024 and continuing for 9
years. This has not been measured in the Group’s lease liabilities.
11 3
Notes to the Consolidated Financial Statements
(Continued)
6.3 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
PricewaterhouseCoopers – overseas firm
Tax services
Compliance
Total non-audit services
(i)The prior year comparative has been amended to reflect actual amounts paid
2023
$
2022(i)
$
1,247,000
92,931
1,727,120
84,798
91,800
14,608
90,780
16,187
1,446,339
1,918,885
89,250
126,276
440,269
168,780
24,121
23,387
239,647
632,436
114
ARN Annual Report 2023
Notes to the Consolidated Financial Statements
(Continued)
6.4 Related Parties
(A) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total
2023
$
2,823,068
137,861
28,085
237,726
2022(i)
$
2,773,160
131,211
64,314
821,127
3,226,740
3,789,812
(i) Comparative has been updated to reflect the change in annual leave accrual, refer to the Remuneration Report disclosures for more detail.
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
Director fee with associate
Property rental
Class of other related party
Key management personnel (i)
Key management personnel (ii)
2023
$
18,750
921,444
2022
$
74,577
782,289
(i)
Directors fee received by Belinda Rowe for services performed in relation to Soprano Design Pty Limited. For the year ending 31 December 2023 the Group
paid $18,750 (2022: $36,906), whilst Soprano Design Pty Limited made no direct payments (2022: $37,671).
(ii)
The Group paid property rental to entities associated with Alison Cameron on commercial arm’s length terms.
(C) Payables with other related parties
There were $nil payable to related parties as at 31 December 2023 (2022: $nil).
(D) Loans to related parties
There were $11.1 million in loans owing to related parties as at 31 December 2023 (2022: $11.0 million). This relates to Nova Entertainment
(Perth) Pty Ltd.
(E) Commitments with other related parties
There were $nil commitments to related parties as at 31 December 2023 (2022: $nil).
11 5
Notes to the Consolidated Financial Statements
(Continued)
6.5 Other Material Accounting Policies
Principles of consolidation – subsidiaries
The consolidated financial statements incorporate the assets and liabilities of ARN Media 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 ARN Media
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.
116
ARN Annual Report 2023
Notes to the Consolidated Financial Statements
(Continued)
6.5 Other Material 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 2023.
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.
6.6 Subsequent Events
Subsequent to the end of the financial year, the Directors have declared the payment of a fully franked dividend of 3.6 cents per ordinary share.
This dividend is payable on 22 March 2024.
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.
11 7
Directors’ Declaration
In the Directors’ opinion:
(a)
the financial statements and notes set out on pages 63 to 116 are in accordance with the Corporations Act 2001, including:
(i)
(ii) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2023 and of its performance for the
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
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
22 February 2024
Independent auditor’s report
To the members of ARN Media Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of ARN Media 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 2023 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 2023
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, including material accounting policy
information 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.
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.
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 and Nova Perth Pty Ltd financial information
specific risk focused analytical procedures at the Group level.
further audit procedures at a Group level, including over the consolidation of
the Group's reporting units and the preparation of the financial report.
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.
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)
The Group continues to hold significant
indefinite lived intangible assets in the
Australia Radio Network (ARN) cash
generating unit (CGU) totalling $319.2
million.
As required by Australian Accounting
Standards, at 31 December 2023 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 $103.7 million to intangible
assets.
The carrying value of 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 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.
We performed the following procedures, amongst others:
• 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 experts
• considered whether the model used to estimate the
recoverable amount of the assets was consistent with
the requirements of Australian Accounting Standards
tested the mathematical accuracy 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
• 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 experts
• 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.
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.
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 2023, 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 through our opinion on the financial report. We
have issued a separate opinion on the remuneration report.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
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.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended
31 December 2023.
In our opinion, the remuneration report of ARN Media Limited for the year ended 31 December 2023
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
Eliza Penny
Partner
Sydney
22 February 2024
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.
12 3
Shareholder Information
1. Shares
(A) Substantial shareholders
The following information is extracted from substantial shareholder notices received by the Company as at 25 January 2024:
Name
Seven West Media (Sydney)
News (Sydney)
Allan Gray Investment Mgt (Sydney)
Grant Broadcasters (Sydney)
Barrenjoey Capital Partners (Sydney)
Spheria Asset Mgt (Sydney)
Samuel Terry Asset Mgt (Sydney)
(B) Top 20 holders of fully paid ordinary shares
The following information is extracted from the share register as at 19 February 2024:
Name
CITICORP NOMINEES PTY LIMITED
SEVEN WEST MEDIA INVESTMENTS PTY LTD
NEWS PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
GRANT BROADCASTERS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BILGOLA NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
FIRST SAMUEL LTD ACN 086243567
BILGOLA NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
HENDERSON MEDIA PTY LTD
QUASAR MEDIA SERVICES PTY LTD
CITICORP NOMINEES PTY LIMITED
PACIFIC CUSTODIANS PTY LIMITED HT1 Plans ctrl1
BNP PARIBAS NOMINEES PTY LTD
BNPP NOMS PTY LTD HUB24 CUSTODIAL SERV LTD
DRAGON SMOKE PTY LTD
PACIFIC CUSTODIANS PTY LIMITED APN EMP SHARE TRUST
BISHOP FAMILY COMPANY PTY LTD
Number
of shares
45,517,739
40,803,132
38,114,063
35,934,891
18,657,959
17,841,954
16,261,358
Number
of shares
% of
total shares
47,886,787
45,517,739
40,803,132
38,467,166
35,934,891
26,325,587
15,274,409
9,233,065
3,737,856
3,451,641
3,193,823
3,161,166
3,161,166
2,731,446
2,054,199
1,651,356
1,615,709
1,239,858
987,836
950,000
15.30
14.54
13.03
12.29
11.48
8.41
4.88
2.95
1.19
1.10
1.02
1.01
1.01
0.87
0.66
0.53
0.52
0.40
0.32
0.30
91.8
Total
287,378,832
1
Pacific Custodians Pty Limited is the registered legal holder for shares held in trust belonging to Employees as part of the treasury incentive plan. As noted in the
Directors’ interests, Ciaran Davis holds 1,332,528, of which 1,260,655 is held in Pacific Custodians Pty Limited HT1 Plans ctrl a/c.
124
ARN Annual Report 2023
Shareholder Information
(Continued)
(C) Analysis of individual ordinary shareholdings as at 19 February 2024:
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
% of total
Number
% of
shareholders
shareholders
of shares
total shares
3,739
945
281
371
59
69.30
17.52
5.21
6.88
1.09
927,562
2,238,058
2,124,775
10,899,311
296,860,667
0.30
0.71
0.68
3.48
94.83
5,395
100.00
313,050,373
100.00
There were 3,152 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 987,836 performance rights on issue at 31 December 2023 (2022: 904,851)
3. Directors’ Interests
The relevant interest of each Director in the securities of the parent entity as at 19 February 2024 was:
Director
H McLennan
B Cubis
P Connolly
C Davis (i)
B Rowe
A Cameron (ii)
Number
of shares
73,000
39,034
65,935
1,332,528
–
35,934,891
Number
of options
–
–
–
–
–
–
(i)
(ii)
Pacific Custodians Pty Limited is the registered legal holde r for shares held in trust belo nging to Employees as part of the treasury incentive plan. As noted in
the Directors’ interests, Ciaran Davis holds 1,332,528, of which 1,260,655 is held in Pacific Custodians Pty Limited HT1 Plans ctrl a/c.
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.
12 5
Shareholder Information
(Continued)
4. Other Information
Stock exchange listing
ARN Media shares are listed on the ASX (code A1N).
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 2023.
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, https://investors.arn.com.au/dividend-reinvestment-plan
Investor information
The Annual Report is the most comprehensive publication with information for investors. Copies of the 2023 Annual Report may be obtained by
contacting the Share Registry or on the Company’s website, https://investors.arn.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,
https://investors.arn.com.au/.
126
Corporate Directory
ARN Media Limited
ABN 95 008 637 643
Directors
Hamish McLennan (Chairman)
Ciaran Davis (CEO & Managing Director)
Alison Cameron
Paul Connolly
Brent Cubis
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 ARN Media Limited will be held on Tuesday 14 May 2024
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://investors.arn.com.au/ outlining how Shareholders will be
able to participate in the AGM.
ARN Media Annual Report 2023