2 0 2 2
A N N U A L
R E P O R T
2 0 2 2
A N N U A L
R E P O R T
Year In Review
SCA’s audio audiences and revenues grew strongly, while television delivered improved margins following SCA’s affi liation switch to Network 10.
Revenue
Expenses
Underlying expenses
EBITDA
Underlying EBITDA
Underlying NPAT
Net debt
Free cash conversion
Dividends (full year)
FY2022
$519.7M
($434.1M)
($431.8M)
$85.6M
$87.9M
$27.4M
$78.5M
67.2%
9.25 cps
COMPARISON TO FY21
$529.2M
($403.2M)
($443.7M)
$125.9M
$85.5M
$19.8M
$52.6M
125.7%
5.0 cps
(1.8%)
7.7%
(2.7%)
(32.0%)
2.8%
38.4%
49.4%
-
85.0%
Audiences are returning in droves to commercial radio. SCA’s Hit and Triple M metro radio stations
recorded their highest ever cumulative audiences of 5.93 million in August 2022. Including SCA’s 78
regional radio stations, we have a total radio audience of more than 8.52 million Australians*.
Since its launch just 18 months ago in February 2021, LiSTNR has
acquired more than 889,000 signed-in users. Developing LiSTNR as
our own digital audio platform allows us to control our own destiny in
the rapidly expanding world of digital audio. Our core competency and
commitment to localism – in the content we create and distribute on
LiSTNR together with the trusted way we engage with our physical and
online communities – diff erentiates us from global technology platforms
and services.
LiSTNR provides a growing and diverse library of live and on-demand
audio content. With the recent addition of three Kinderling children’s
stations, LiSTNR houses more than 100 live radio stations; 25 music
genre stations; 124 original podcasts; live AFL, NRL and international
cricket; local news and information around Australia; and domestic and
international licensed content from the BBC, Schwartz Media, the Royal
Institution of Australia, SoundCloud and other partners. On-platform
listening in the six months to 30 June 2022 multiplied 3.7 times to
2.7 million average monthly streams compared to the same period in
2021. There truly is something for everyone!
The Board has completed a strategic review of the Group’s television
assets and concluded that value for shareholders will be maximised
by continuing to operate the television business. The business is
streamlined, effi cient and capital light, generating EBITDA of $30 million
and an EBITDA margin of 23.7% during the year.
In the year ahead, SCA will balance ongoing initiatives to grow
audiences and advertising interest for our live and on-demand content
with a focus on operational effi ciency and capital management
initiatives to improve returns to shareholders. The Board was therefore
pleased to declare dividends of 9.25 cents per share in FY22, up 85%
on the prior year. In addition, with the long-term strategy for the Group’s
television assets now settled, the Board has resumed the on-market
share buy-back.
Contents
Year In Review
IFC
Our People
Chairman’s Statement
CEO’s Report
Operational Review
Television
Boomtown
Year In Review
02
03
06
14
15
SCA Embrace and Community
The Board and Leadership Team
Financial Report
Additional Information
Corporate Directory
16
17
20
25
95
97
Southern Cross Austereo
Year In Review
8.5M
5.8M
Total FM, AM and DAB+ audience*
Total Hit FM and DAB+ audience*
4.2M
Total Triple M FM and
DAB+ audience*
3.6M
Total TV reach^
3M+
1.7M+
9.9M+
Average monthly unique
radio streamers**
Average monthly streaming total
listening hours**
889K+
8M
Average monthly unique
podcast listeners***
Total signed in digital audio users^^^
Total digital audio network
audience^^
Source: *GfK Metro Survey #5 2022, Provincial Survey #2 2022. P10+, Cume Reach (000’s), Mon-Sun ROS, SCA FM&DAB+ Brands (inc Soundcloud), Hit Network FM&DAB+ Brands, MMM Network
FM&DAB+ Brands. Xtra Insights SCA Regional Markets Surveyed to Date, P10+, Cume Reach (00’s), Mon-Sun ROS. **Triton Streaming Metrics. ***Triton Podcast Metrics. ^Regional TAM Data. 4AGGS
(Network 10 + Sky News Regional), WA (Network 10) & TAS (Seven Network & Network 10). Average Weekly Reach (1 Min Cume). 0200-2600. Consolidated 7. SUN-SAT. 27/06/21 - 02/07/22 (Excl Summer
& Easter Wks). Diary Markets - Last Available Survey. 0600-2400. CEN – 2007. DAR – 2011. SGT – 2015. ^^ LiSTNR Digital Audio Network: 8m Australians per month, including LiSTNR streaming,
podcasts, Soundcloud and Sonos. ^^^Firebase Authenticated User Counts.
2022 Annual Report
Year In Review | 1
Chairman’s Statement
The recovery in media markets continued in the past year, but not in a
straight line. Natural disasters, geo-political events and various ongoing
pandemic impacts dampened business and consumer confi dence
during the year. But, with positive trends in audio consumption and
engagement with our LiSTNR platform, we are cautiously optimistic
about earnings recovery in the year ahead.
SCA’s metro radio audiences reached record levels in the most recent
offi cial radio survey 5 published in August 2022. The cumulative
audience of SCA’s Hit and Triple M stations in the fi ve metro capitals
of 5.93 million was its highest ever and 22.8% higher than in the
fi nal survey of 2021. Including our network of 78 radio stations in
regional Australia, we have a total radio audience of over 8.52 million
Australians*. In our top seven annually surveyed locations, SCA
most recently ranked #1 in 60% of available dayparts for our target
demographics of men aged 25-54 for Triple M Network and women
aged 25-54 for the Hit Network*. In addition more than 889,000
signed-in LiSTNR users who are increasingly turning to LiSTNR to meet
their daily audio needs.
Advertisers rewarded the compelling reach of SCA’s audio platforms
during FY22 with 9.6% growth in audio revenue to $392.8 million,
sparked by expansion of 35% in digital audio revenue.
Despite the positive trends in consumption of our content, and
impressive year-on-year growth in audio revenues, the year’s results
were below our expectations as broadcast radio markets recover
more slowly than expected and remain below pre-COVID 2019
levels. The recovery in local revenues lagged the recovery in national
revenues in both metro and regional markets. It is clear that small and
medium business clients in regional markets have been particularly
aff ected by fl oods, labour shortages and supply chain delays. In the
face of current economic uncertainty and an increase in the cost of
capital globally, the Group recognised impairment charges of $178.6
million (net of tax) relating to impairment in the carrying value of radio
licences, goodwill and brands.
Our investment in a fully owned and operated digital audio ecosystem,
LiSTNR, positions SCA to take a leading share of the rapidly
expanding Australian digital audio market. We will continue to invest
in evolving LiSTNR to provide audiences with an easy-to-use, intuitive
and personalised experience, while building and enhancing the suite
of premium content available on LiSTNR. This will include ongoing
curation of our original podcasts, such as Hamish & Andy and The
Howie Games, as well as expansion of our domestic and international
partnerships with the BBC, Schwartz Media, the Royal Institution of
Australia, SoundCloud, and others.
Importantly, however, it will also include targeted investment in
our live and local radio shows and news and information services
around Australia. With record radio audiences migrating to listen to
our shows on mobile phones, desktop computers, smart speakers,
connected cars and other digital devices, the industry and SCA are
carefully migrating listeners to new ways of listening and engaging
with our brands.
At the same time, we have urged the new Federal Government
to legislate to ensure local AM, FM and DAB+ radio is prominently
available on car dashboards and other digital devices. This has
become an increasingly signifi cant issue as car manufacturing has
moved off shore and manufacturers develop cars for global markets.
During the year, the Board completed a strategic review of the Group’s
television assets, including engagement with several interested
parties. Bids from these parties did not align with the Board’s valuation,
and the Board has concluded that value for shareholders will be
maximised by continuing to operate the television business. The
business is streamlined, effi cient and capital light, generating EBITDA
of $30 million and an EBITDA margin of 23.7% during the year. The
television business also provides a valuable marketing platform to
grow awareness and enjoyment of LiSTNR in regional Australia.
Free-to-air television remains an important and trusted source of
information and entertainment in regional Australia, especially in the still
large areas with no or limited Internet coverage. We are therefore also
asking the Federal Government to legislate to ensure free-to-air television
is readily and prominently available on connected televisions and to
update anti-siphoning rules to protect the community’s access to major
Australian and international sporting events on free-to-air television.
After six years on our Board, Melanie Willis retired as a director during the
year. On behalf of my fellow directors, I thank Melanie for her signifi cant
contribution to SCA, including for fi ve years as Chair of the Board’s Audit
& Risk Committee. Considering changes in SCA’s business over the past
year, the Board has decided not to seek a replacement for Melanie. The
Board considers its reduced size and its mix of skills and experience
are appropriate for SCA’s needs. The Board will, however, review the
structure and composition of its committees in coming months.
I would also like to acknowledge Nick McKechnie’s contribution as SCA’s
Chief Financial Offi cer since 2014. Under Nick’s stewardship, the Group
has signifi cantly improved its balance sheet and cash fl ow position which
has enabled us to invest in our digital transformation strategy. We wish
him well in his new role.
In the year ahead, SCA will balance ongoing initiatives to grow audiences
and advertising interest for our live and on-demand content with a focus
on operational effi ciency and capital management initiatives to improve
returns to shareholders. The Board acknowledges shareholders have
experienced a diffi cult journey since COVID fi rst began to aff ect SCA
and media markets generally in early 2020. The Board was therefore
pleased to declare dividends of 9.25 cents per share in FY22, up 85%
on the prior year. In addition, with the long-term strategy for the Group’s
television assets now settled, the Board has resumed the on-market
share buy-back.
On behalf of the Board, I thank SCA’s people all around Australia for
their dedication and commitment during the year just ended.
I trust you will enjoy reading our annual report.
Rob Murray
Chair
*GfK Metro Survey #5 2022, Provincial Survey #2 2022. P10+, Cume Reach (000’s), Mon-Sun ROS, SCA FM&DAB+ Brands (inc Soundcloud), Hit Network FM&DAB+ Brands, MMM Network FM&DAB+
Brands. Xtra Insights SCA Regional Markets Surveyed to Date, P10+, Cume Reach (00’s), Mon-Sun ROS.
2 | Chairman’s Statement
Southern Cross Austereo
CEO’s Report
In the past year, SCA completed a fi ve-year program to install a digital
operating infrastructure across all offi ces and every studio. This
investment enables us to create, ingest and distribute our premium
content from any location to audiences at a time and on a device of
their choice and positions us to capture the commercial value of the
ever-increasing appetite of Australians for our live and on-demand
audio content.
Completion of this program was a core driver of our purpose to
entertain, inform and inspire Australians, anytime, anywhere. And
we’ve refi ned the pillars of our corporate strategy for the next two
years, which are to entertain, inform and inspire our audiences; to
evolve LiSTNR into a unique, world-class audio platform; to optimise
and simplify our sales off ering to grow revenue; and to re-imagine
and restructure SCA’s operating model.
Entertaining, informing and inspiring our audiences
This pillar remains the fi rst and most important requirement for our
success. A successful media company must consistently deliver large
and engaged audiences to attract interest and investment from our
advertising clients.
The ending of COVID-19 related lockdowns in the second half of the
past year saw workers in Australia’s major population centres return
to their offi ces. Home to offi ce commuting, particularly in cars but also
by public transport or on foot, is one of the prime drivers of audio
consumption. The total weekly metro commercial radio audience of
12 million recorded in survey 5 was the highest ever and a 7.6% jump
over the prior year^. SCA’s Hit and Triple M stations led this rise as
audiences naturally returned to entertainment and music formats.
In the fi ve metro radio markets, SCA has the largest audience in our
core target of people aged 25-54 with over 3.2 million listeners*.
Seventy percent of advertising briefs target this demographic. The
aggregate metro audience (cume) of both the Hit Network and the
Triple M Network in survey 5 was the highest ever. With cume of 1.325
million, Melbourne’s Fox FM also recorded its highest ever cume and
was the most listened to radio station in Australia*.
Our Sydney Hit Network station, 2DayFM, remains the biggest
opportunity for growth in our portfolio. In September 2021, we
relaunched the station as the ‘new’ 2DayFM with a refreshed music
strategy and a female-skewed format. Hughesy, Ed and Erin took
their Breakfast show to key communities to build engagement and
encourage more listening. While much work remains to be done, the
number of weekly listeners to 2DayFM has grown 45% since relaunch
of the station. The strategy for 2DayFM in the year ahead is directed
at attracting and retaining new listeners while extending the time they
spend listening. Sustained growth in the audience of the Breakfast
show will fl ow through to listening in other dayparts, including the
national Carrie and Tommy Drive show which has grown its weekly
national metro audience to more than 1.77 million*.
The Triple M Network has doubled down on its local roots this
year. All Triple M stations around the country have locally produced
Breakfast shows (unlike the regional ‘super shows’ on the Hit
Network) as well as new State-based Rush Hour Drive shows.
This diff erentiates Triple M from our own Hit Network and other
competitors which, for the most part, off er national Drive shows.
These State-based Rush Hour shows have quickly resonated with
audiences as survey results have improved over the year.
Triple M also recorded the largest commercial AFL and NRL
metro footy audience, delivering 47% more audience than any
other commercial competitor. Triple M’s AFL coverage achieved a
cumulative audience of 626,000 in Melbourne, Adelaide and Perth,
while Triple M’s NRL coverage has a cumulative audience of 471,000
in Sydney and Brisbane*. Triple M also returned to cover international
cricket last summer.
For the fi rst time this year, our audiences were able to listen to Triple
M’s AFL, NRL and cricket commentary on LiSTNR. Sporting bodies
had previously reserved streaming rights for themselves or other
parties and extending these rights to LiSTNR has expanded the reach
and infl uence of these sports. This was especially exciting for our
cricket fans in regional markets and led to a spike in the number of
signed-up users of LiSTNR during last summer.
We have also continued to expand the volume and diversity of other
live and on-demand audio content hosted on LiSTNR. With the recent
addition of three Kinderling children’s stations, we have over 100 live
radio stations; 25 music genre stations; 124 original podcasts; live
AFL, NRL and international cricket; local news and information around
Australia; and domestic and international licensed content from the
BBC, Schwartz Media, the Royal Institution of Australia, SoundCloud,
and other partners.
The Australian Podcast Ranker for July 2022 had Hamish & Andy as
Australia’s most popular podcast, with seven other LiSTNR podcasts
in the top 20, and fi ve LiSTNR podcasts were the most popular
Australian-made in their genre (Comedy: Hamish & Andy; News: 7am,
in partnership with Schwartz Media; Sport: Triple M Footy AFL; Society
and culture: It’s a Lot with Abbie Chatfi eld; and Fiction: The Younger
Man). The Younger Man, an adaptation of Zoë Foster Blake’s romantic
comedy novel of the same name, is the fi rst of LiSTNR’s serialised
audio dramas.
Evolve LiSTNR into a unique, world-class
audio platform
We released LiSTNR in February 2021 as a minimum viable product
and have progressively added to its functionality and user experience
in the 18 months since. That we have acquired over 889,000 signed-
in users during that time with app store user ratings consistently over
4.5/5 is testament to our work to date, but also an indicator of the
opportunities ahead.
Signing in to LiSTNR enables users to express their audio interests
and preferences. Using built-in artifi cial intelligence and machine
learning, LiSTNR interprets this information and users’ actual listening
habits to help users fi nd other content likely to be of interest to them.
In turn, this will build trust and loyalty to LiSTNR. We also use this
information to commission new content for LiSTNR and to organise
the content available on LiSTNR so it is intuitive for users.
We make most LiSTNR content available on other audio-on-demand
platforms in Australia. This remains essential to maximise the reach
of LiSTNR content for our creators and advertisers. However, over
time it will be important to grow the on-platform audience for LiSTNR
content, deepening the fi rst party data and insights available to help
advertisers connect to addressable and targeted audiences at scale.
We are confi dent that developing LiSTNR as our own digital audio
platform puts SCA ahead of local and international audio peers. As
consumers increasingly choose to listen to live and on-demand audio
on digital devices, SCA will control its own destiny through LiSTNR.
Our core competency and commitment to localism – in the content
we create and distribute on LiSTNR together with the trusted way we
engage with our physical and online communities – diff erentiates us
from global technology platforms and services.
2022 Annual Report
CEO’s Report | 3
CEO’s Report
Optimise and simplify our sales off ering to
grow revenue
The ways in which our audiences consume our content continue
to diversify and our range of products is expanding in tandem.
For example, in August, we launched a world fi rst dynamic sport
campaign delivering live AFL and NRL Friday night game scores
inside audio ads on broadcast and digital audio platforms. Live score
updates are delivered during Triple M Footy ad breaks, so fans know
who’s winning even while the ads are on.
Enhanced audio transcription of our content now enables us to report
accurately and quickly to clients on credits delivered during live sport
and other shows.
During the year, SCA’s insights division, SCA iQ, worked with
Amplifi ed Intelligence and Professor Karen Nelson-Field to conduct
a feasibility study into broadcast audio attention to understand how
live radio infl uences listeners’ brand choice. The feasibility study
found broadcast audio commands high attention, on par with other
broadcast media, while SCA’s suite of audio content performed better
than some visual attention counterparts. Commercial Radio and Audio
(CRA), our peak industry body, and its members have committed to
continue this testing to develop audio attention metrics for broadcast
audio and podcasting.
We were delighted recently to host more than 400 media buyers and
other guests for an immersive experience showcasing a day in the life
of a LiSTNR user from waking up listening to Steve Price on Australia
Today, heading to the gym listening to It’s A Lot with Abbie Chatfi eld,
catching the train to work enjoying Triple M’s The Marty Sheargold
Show, and cooking dinner with the Hit Network’s national Drive show,
Carrie and Tommy.
It’s more important than ever for our sales and creative teams to
understand our products and to be able to explain them simply and
match them to our clients’ objectives.
Taking a client-centric approach, we have therefore created an
integrated radio and digital audio sales structure and will this year
commission a single sales and traffi c system for audio inventory. Our
sales training provides detailed knowledge about SCA’s products
(including our growing suite of digital audio content and audience
attribution tools), fundamental skills for eff ective selling, critical thinking,
and tools for motivating, coaching, and performing as part of a team.
SCA is also at the forefront of industry initiatives to educate buyers
about digital audio and improve the tools available to buyers. CRA
has made good progress with offi cial survey provider, GfK, to evolve
the commercial radio industry’s audience measurement currency.
Radio audience survey data is now collected predominantly by
electronic diary and live streaming data will be incorporated in coming
months. The Australian Podcast Ranker, of which SCA was a founding
member, now provides monthly data on both listeners (reach) and
downloads (frequency), helping media buyers to plan and value their
investment in digital audio inventory.
Re-imagine and restructure SCA’s operating model
Increasingly, content created for broadcast is consumed by our
audiences on connected devices, whether live or later as a radio
show podcast, or in snippets posted to LiSTNR. Our radio shows
build engagement and loyalty with our audiences through audio
and video clips posted to social media. Visualisation is becoming
increasingly important in the world of digital audio. At the same time,
our advertisers want to know more about the audience to fi ne-tune
their messages and improve their return on investment.
To meet these imperatives, SCA is committed to a digital fi rst operating
model for audio. We have made strides in this direction, but work
remains to optimise our workforce and systems. Actions underway
to close gaps in our current business model include designing new
workfl ows, performance measures and measurement and reporting
tools; educating and upskilling our people to ensure we have the
required capabilities; educating our clients about the benefi ts of
digital audio advertising products; and partnering with leading content
creators and technology innovators from around the world.
SCA has made small investments in key technology partners to
accelerate and infl uence their product development while working
collaboratively with our sales, content and technology teams. The
dynamic sport scores advertising innovation and improved reporting
on client credits mentioned above resulted from our collaboration
with Frequency and Sonnant, two of our recent investment partners.
Television
We are very comfortable retaining our television assets.
Through sale of capital assets and outsourcing of asset intensive
activities to specialist service providers since 2017, SCA has created a
streamlined, effi cient and capital light service. SCA’s television assets
delivered EBITDA of $30 million, an improved EBITDA margin of
23.7%, and a market leading revenue-to-audience power ratio of 1.09
in the three aggregated markets of regional Queensland, Southern
New South Wales, and regional Victoria. These outcomes followed
a seamless transition to affi liation with Network 10 in the three
aggregated markets from 1 July 2021.
SCA’s provision of national sales representation services for Network
10 programming in Northern New South Wales, Western Australia,
Tasmania, Darwin and Mildura/Riverland delivers a simple and scaled
sales proposition for national buyers of advertising on Network 10
programming in regional Australia.
Television is also a strong marketing platform for the growth of LiSTNR
in regional markets, delivering around $10 million of in-kind marketing
support in FY22.
Executive leadership changes
During the year, I was pleased to promote and welcome Rebecca
Ackland to our executive leadership team as Chief People and
Culture Offi cer. Bec joined our People and Culture team four years
ago and has progressed rapidly from operational human resources
responsibilities to designing and implementing initiatives to ensure
SCA will have the digital and other skills and capabilities to achieve
our strategic ambitions. Bec’s leadership and counsel through the
complex challenges of the COVID-19 pandemic cemented her
credentials. Bec also brings a fresh perspective to the leadership
team and is a role model for other aspiring women at (or considering
joining) SCA.
After eight years, we will shortly farewell Nick McKechnie as Chief
Financial Offi cer. Nick has made a signifi cant contribution to SCA.
I have valued Nick’s support and advice in my seven years as CEO,
which have included the ongoing challenges presented by the
COVID-19 pandemic. On behalf of the senior leadership team and
everyone else at SCA, I wish Nick success in his new role.
*GfK Metro Survey #5 2022, Provincial Survey #2 2022. P10+, Cume Reach (000’s), Mon-Sun ROS, SCA FM&DAB+ Brands (inc Soundcloud), Hit Network FM&DAB+ Brands, MMM Network FM&DAB+ Brands. Xtra Insights SCA Regional Markets
Surveyed to Date, P10+, Cume Reach (00’s), Mon-Sun ROS. ^CRA survey 5 release.
4 | CEO’s Report
Southern Cross Austereo
CEO’s Report
The year ahead
In the fi rst quarter, broadcast radio revenues are forecast to grow
between fi ve and seven percent. With growth in local advertising still
subdued, there is stronger momentum in metro markets compared
to regional markets. First quarter digital audio revenues are forecast
to increase by about 30 percent. After the Commonwealth Games in
2022 and the Tokyo Olympics in 2021, television markets are tracking
below the fi rst quarter last year.
Our FY23 non-revenue-related costs will increase by between two
and four percent and total fi nancing costs will be about $17 million.
With the Melbourne offi ce relocation completed, capital expenditure
in FY23 will concentrate on core systems and innovation and will
reduce from $30 million to about $20 million.
We are targeting to reach 1.75 million signed-in users on LiSTNR
by the end of FY23, driven by stronger awareness of the LiSTNR
brand, an increase in the diversity of premium content from both SCA
and our partners, and further improvements in user personalisation
and discovery.
In conclusion, we are proud of the culture we have built at SCA that
encourages inclusion, diversity, agility and collaboration. Our people
are highly skilled, passionate, and curious by nature. May I also thank
our shareholders for their support of our business. We are working
hard to improve the pace of recovery and adapt to the changing
and increasing consumption of our content across existing and new
platforms. We are genuinely excited about our future and look forward
to updating you on our progress.
Grant Blackley
Managing Director and
Chief Executive Offi cer
2022 Annual Report
CEO’s Report | 5
Operational Review
Highlights:
• SCA has 8.52 million listeners across its national FM, AM and DAB+ networks*
• LiSTNR now has 1.5 million app installs, 889,000 signed-in users, plus 8 million
Australians consuming LiSTNR’s digital audio content and growing**
• LiSTNR won Australian Podcast Company of the Year and Podcast of the Year in
the 2022 Podcast Awards for the second consecutive year
• There has been a strong recovery in radio listening following the pandemic, with
the industry weekly listeners up 8% year on year to 12 million^
• In survey 5, SCA recorded record cumulative audiences of 5.93 million for its
metro stations, up 199,000 new listeners on survey 4, 2022*
• The Hit Network recorded its largest metro audience ever in the latest metro
radio ratings survey 5 in August 2022 with 4.21 million listeners and 5.8 million
listeners in total across its 50 stations around the country*
• The Fox in Melbourne is Australia’s most listened to radio station with
1.325 million weekly listeners the highest cumulative audience in Australian
radio history*
• Triple M reported its largest audience in 17 years, with 2.89 million listeners, in
metro survey 5 in August 2022; and 4.28 million listeners across its 49 stations
country-wide*
• Triple M and LiSTNR won the audio streaming rights to AFL, NRL and Cricket
Australia, bringing NRL game broadcasts to regional markets for the fi rst time
• SCA will retain its television assets for scale in regional markets
• SCA’s affi liation with Network 10 resulted in a market-leading power ratio of
revenue to audience of 1.09
• SCA extended its long-standing affi liation with the Seven Network in Tasmania,
Darwin, Broken Hill and Spencer Gulf, and remote Central Eastern Australia.
• 7 Tasmania is the number one television network in the State, delivering 58.8%
commercial share of viewing
*GfK Metro Survey #5 2022, Provincial Survey #2 2022. P10+, Cume Reach (000’s), Mon-Sun ROS, SCA FM&DAB+ Brands (inc Soundcloud), Hit Network FM&DAB+ Brands, MMM Network FM&DAB+
Brands. Xtra Insights SCA Regional Markets Surveyed to Date, P10+, Cume Reach (00’s), Mon-Sun ROS. **LiSTNR Digital Audio Network: 8m Australians per month, including LiSTNR streaming, podcasts,
Soundcloud and Sonos. ^CRA Survey 5 release.
6 | Operational Review
Southern Cross Austereo
Operational Review
LiSTNR
LiSTNR hit its fi rst birthday milestone in February this year and is now Australia’s fastest growing audio
entertainment platform, with 889,000 signed-in users and growing.
LiSTNR Sign-Ups
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
To celebrate, LiSTNR hosted ‘Audio Amplifi ed’ a unique immersive
experience to show a day in the life of a listener, from waking up in the
morning listening to Steve Price on Australia Today, heading to the gym
listening to Abbie Chatfi eld’s It’s A Lot podcast, catching the train into work
while being entertained by Triple M’s The Marty Sheargold Show and
Triple M Footy, to cooking dinner in the evening with the Hit Network’s
national drive show, Carrie and Tommy, just to name a few. It was attended
by more than 400 people and was covered extensively in the media.
LiSTNR, an Australian fi rst premium, curated and personalised free app, is
central to SCA’s digital transformation and houses SCA’s 99 Hit and Triple
M radio stations, 124 original Australian podcasts and 25 music stations.
LiSTNR has fi ve key curated content verticals: Entertainment and Culture,
Sport, News and Information, Factual and Drama, and Parenting and Kids
Entertainment, along with branded podcasts funded by advertisers.
The suite of podcasts on LiSTNR includes Australia’s most popular podcast,
Hamish & Andy. LiSTNR has the most podcasts in the Top 20 Australian
podcasts, including number one sports podcast Triple M Footy AFL, number
one news podcast in partnership with Schwartz Media 7am, and number
one entertainment/culture podcast It’s a Lot with Abbie Chatfi eld. Others in
the Top 20 include The Howie Games, The Briefi ng, Triple M’s Rush Hour
with JB & Billy, and Just the Gist.
2022 Annual Report
Operational Review | 7
Operational Review
LiSTNR
LiSTNR’s key focus is on premium, curated podcast and streaming content from trusted Aussie household
names including Hamish Blake, Andy Lee, Mark Howard, Tom Tilley, Steve Price, Natarsha Belling, Adam
Shand, Jess Rowe, Luke Darcy, Turia Pitt and Abbie Chatfi eld, as well as the country’s highest profi le and
most loved talent including Carrie Bickmore, Tommy Little, Dave ‘Hughesy’ Hughes, Ed Kavalee, Erin
Molan, Marty Sheargold, Fifi Box, Brendan Fevola, Nick Cody, Jess Eva, Anthony ‘Lehmo’ Lehmann, Bianca
Dye, Andrew ‘Cosi’ Costello, Stav Davidson, Abby Coleman, and more.
This year, LiSTNR has launched more than 30 podcasts, including The
Younger Man, the fi rst audio rom com podcast series in its new Audio
Fiction pillar based on Zöe Foster Blake’s book. Other key launches
include The Sport, LiSTNR and Schwartz Media’s fi rst co-created
podcast, Shockwaves: The Bali Bombings, the fi rst co-produced
podcast with Network 10 and LiSTNR; The Science Briefi ng and Huh?
Science Explained both co-created with the Royal Institution of Australia
(RiAus), the fi rst of four branded podcasts with carsales called Watts
Under the Bonnet: The Electric Vehicle Podcast; while Steph Claire
Smith and Laura Henshaw’s popular KICPOD podcast and That’s
Enough Already with Urzila Carlson moved to LiSTNR, and two of Andy
Lee’s best-selling children’s books Do Not Open This Book and Do Not
Open This Book for Eternity also became available as audio books.
In addition, Sydney’s popular radio duo, Mike E and Emma, launched
a new, live national weekday Breakfast show station on LiSTNR and
DAB+ called RnB FRIDAYS. The channel also features the hottest
Hip-Hop and RnB music.
Today, LiSTNR publishes more co-created original podcast titles and
episodes than any other Australian commercial digital audio company.
Throughout the year, LiSTNR has collected a number of accolades, including being awarded Podcast
Company of the Year at the 2022 Podcast Awards by Radio Today for the second consecutive year. LiSTNR
also won Podcast of the Year for Come Out Wherever You Are, Podcast Thought Leader of the Year and
Podcast Executive Producer of the Year.
SCA’s Innovation Program, The Lab, received more than 400 entries into
its company-wide Lab Contest in 2021 to develop innovative ideas for
LiSTNR. Two of the three winners’ ideas came to fruition this year – The
Stories of Us podcast that tells inspiring true stories about locals from
around Australia, and Sound States, a series of ‘sensory non-music audio’
that infl uences mood states of listeners, a concept that has found cult
popularity among young audiences.
8 | Operational Review
Southern Cross Austereo
Operational Review
LiSTNR
As well as its content line-up, LiSTNR has developed successful
business partnerships across content, audience intelligence and
machine learning with the NRL, AFL, Cricket Australia, Network 10,
Kinderling, BBC, Schwartz Media, Apple Music, Salesforce, Frequency,
NumberEight, SourseAI and Sonnant – with more premium partnerships
to come.
Consumers are migrating at pace to digitally enabled IP listening across multiple devices and platforms.
In time this will become the dominant mode of audio consumption.
• Strategic imperative to own and operate our digital audio eco-system (not licence)
• Localism is our key diff erentiator to global tech platforms
• On-demand content growing the audio market on top of an already resilient radio platform
• Digital Audio First Strategy – re-thinking the way we program and commission content
This year LiSTNR delivered a new record high of 3.4 million podcast
listeners. Excluding Spotify, LiSTNR has the highest share of voice in
the media at 31%. Active streams during FY22 were 62.33 million, while
total listening hours were 60.3 million for the same period.
Sources: Triton Australian Podcast Ranker March 2022, Streem data, Triton.
Average monthly streams on LiSTNR have increased by over 3.7x since
launch, as listening on the platform grows rapidly across podcasting,
live streaming of radio shows and music streams.
Average Monthly Streams on LiSTNR by HY 3.7x Growth in Listening
On-platform listening is scaling rapidly - growth in signed-in users, increasing depth of content and more inventory for monetisation.
Source: SCA Internal data
2.7m
1.7m
0.7m
H1 CY21
H2 CY21
H1 CY22
LiSTNR is also gaining ground among consumers. User satisfaction of
the LiSTNR app grew from 49% overall satisfaction to 59% and is the
second-highest fi rst to mind recalled audio brand. There has
been 61% growth, from 6.4% to 10.3%, in unprompted awareness
among consumers, and 26.9% growth, from 22.1% to 28.5%, in
prompted awareness.
Source: SCA iQ \LiSTNR Brand Tracking, July 2022. External sample (Fonto & Ovation Insights),
National P18-64 n=1,210. In fi eld 14th to 31st July 2022.
LiSTNR’s Instagram has achieved more than 55% audience growth
in 2022, to almost 10,000 followers. Two stand-outs were Hamish &
Andy’s Remembering Project with 2.2 million organic video views, and
Abbie Chatfi eld’s It’s A Lot podcast with more than 12 million organic
video views.
10.0k
9.0k
8.0k
7.0k
6.0k
Instagram Growth Chart
Week of Jan 01
Week of Apr 01
Week of Jul 01
Audio listening is also booming. The latest Edison Infi nite Dial report in
June 2022 found that 80% of Australians had listened to live radio or
radio catch-up podcasts in the past week and that average time spent
listening to podcasts had surged to seven hours and six minutes of
podcasts per week (up from fi ve hours in 2021).
LiSTNR is accelerating SCA’s transition from a one to many unknown
consumers model to a one to one known signed-in consumers model,
which is appealing to digital audio advertisers. Supported by the growth
in consumption of LiSTNR’s live and on-demand audio content and an
expanding digital audio market, SCA’s digital audio revenue jumped by
35% in FY22.
2022 Annual Report
Operational Review | 9
Operational Review
Radio
SCA owns 99 stations across FM, AM and DAB+ radio and provides
national sales representation for 23 other regional radio stations.
SCA is the #1 commercial radio network for the key buying demographic of
people 25 to 54 years of age. The Hit and Triple M networks continued to
entertain, inform and inspire more than 8.52 million Australians each week*.
The Hit and Triple M networks are home to some of the best radio talent
in the country including Carrie Bickmore, Fifi Box, Tommy Little, Abbie
Chatfi eld, Brendan Fevola, Nick Cody, Ed Kavalee, Dave Hughes and Erin
Molan on Hit, and Marty Sheargold, Mark Geyer, Gus Worland, Jess Eva,
Margaux Parker, Dave Gleeson, Wendell Sailor, Ryan Girdler, Leisel Jones,
Peter Sterling, James Brayshaw, Billy Brownless, Gorden Tallis, Greg
Martin, Jude Bolton, Mark Ricciuto, Chris Dittmar, Peter ‘Spida’ Everitt and
Andrew Jarman on Triple M.
There has been a strong recovery in radio listening following the
pandemic.
Commercial Radio and Audio reports that weekly listeners have risen
8% year on year to 12 million people in metro capital cities in the survey
5 radio ratings. There has been a 900,000 year on year increase in
weekly listeners for the industry, a 27% increase in listeners streaming
radio content, and a 35-minute weekly increase in in-car listening as city
workers return to commuting between home and offi ce.
Smart speaker listening also continues its explosive growth. On the Hit
Network, smart speaker listening has grown by 169% in two years and on
Triple M, smart speaker growth is 230% in the same period (July 2020 to
July 2022).
In the survey 5 radio ratings, the Hit and Triple M networks continue
to show a remarkable audience return to radio, with a record national
cumulative audience of 5.93 million for our metro stations – a rise of
26.4% since the last survey of 2021. SCA’s cumulative audience has
grown at a faster rate that its peers over the past fi ve radio ratings surveys
and has added 1.2 million listeners over the past fi ve years*.
Metro Commercial Radio Audiences
Source: Commercial Radio Australia
11.7
11.1
11.2
10.9
10.7
10.5
2017
2018
2019
2020
2021
2022
Average Metro Radio Audience – All People 10+ Cume
Source: GFK – 5 Cap Cities, share of audience People 10+ (incl DAB). Commercial Radio Australia
300
260
220
180
140
#5
2019
#6
2019
#7
2019
#8
2019
#1
2020
#2
2020
#6
2020
#7
2020
#8
2020
#1
2021
#2
2021
#3
2021
#4
2021
#5
2021
#6
2021
#7
2021
#8
2021
#1
2022
#2
2022
#3
2022
#4
2022
SCA
NOVA
ARN
NINE
This year, SCA launched eight new DAB+ radio stations from the Hit
and Triple M networks on the Gold Coast, bringing local listeners the
best of digital radio music and entertainment off erings for the fi rst time.
The Gold Coast is the 10th city in Australia to have DAB+. In addition to
its two FM stations, 90.9 Sea FM and 92.5 Triple M, SCA launched six
digital-only radio stations: Triple M Classic Rock, Triple M 80s and Triple
M 90s, plus Easy 80s Hits, Oldskool 90 Hits, and RnB FRIDAYS Radio.
Metro radio advertising revenue grew 9.4% in the fi nancial year and
regional ad revenue grew by 6.4% as the advertising market recovers
from the pandemic but is still impacted by labour shortages and supply
chain issues.
SCA has completed its fi ve-year 60 offi ce digitisation program across
Australia, creating a digital infrastructure fi t for the future.
10 | Operational Review
Southern Cross Austereo
Operational Review
Hit Network
Listeners have fl ocked back to the Hit Network, which recorded its largest metro audience ever in the
latest radio ratings survey 5 in August 2022 with 4.21 million listeners*. Across its national network
of 50 stations, Hit has 5.8 million listeners in total*.
In particular, The Fox in Melbourne continued its record-breaking streak as Australia’s most listened to
radio station with 1.325 million weekly listeners*. This is the highest cume ever in Australian radio history.
Survey 5 also saw 2DayFM celebrate its fi fth consecutive cume increase
and the Breakfast show with Hughsey, Ed and Erin again grew its audience,
achieving the highest audience growth in Sydney, and a 38% increase in
audience this year*.
A lucky listener from Sydney won the prize after playing live with 48 other
fi nalists on Million Dollar Day with Drive hosts Carrie and Tommy. The prize
enabled Stacey from Casula to give up 16 years of renting to fi nally buy her
own family home.
In addition, Brisbane’s B105, home of the Stav, Abby and Matt Breakfast
show, recorded its highest cume ever, rising by 10% to 642,000*. Perth’s
Mix 94.5, home of the Pete, Matt and Kymba Breakfast show, matched this
record with its highest cume ever, up 5% to 595,000*. SAFM has the number
one Breakfast show, with Bec, Cosi and Lehmo, among women aged 25 to
54; and is also the number one station for this demographic*.
The Hit Network is the number one network for the key buying
demographic of people aged 25 to 54 and has the number one share of
women aged 25 to 54*.
Hit’s regional stations also had a stellar year, with many recording the biggest
radio audience in their respective markets. On the Gold Coast, 90.9 Sea FM
is the number one station overall and in Breakfast among women aged 25 to
54. Hit 100.9 in Hobart is the number one most listened to station in the city*.
A number of other Hit stations were crowned number one with Hit 106.9
in Newcastle, Hit 93.1 Wagga Wagga, Hit 100.3 and 94.7 in Mackay and the
Whitsundays, the number one stations overall and in Breakfast among women
aged 25 to 54*. Hit 104.7 Canberra was the number one station overall among
people aged 18 to 39, Hit 105.5 Coff s Harbour and Hit Port Hedland and
Broome were both the number one stations overall in people aged 10+*.
Hit 106.5 Karratha was number one in Breakfast, Drive and in people aged
25 to 54*.
The Hit Network made Australian radio history in November 2021 as the
network crowned its very fi rst millionaire. Hit’s biggest ever promotion,
the $1,000,000 Alphabucks competition, ran on air nationally from July to
November 2021. To win, players were asked to answer 10 questions using
one letter from the alphabet with 30 seconds to answer. More than 75,000
registered to play.
Hit ‘hit’ the ground running in 2022 with a new national Nights show, Hot
Nights with Abbie Chatfi eld, that has been a ratings success story. Abbie’s
podcast, It’s A Lot, also features on LiSTNR and featured in the top 10
podcasts for the fi rst time in the July Australian Podcast Ranker.
Hobart’s favourite sons and ACRA-award winning duo, Jimmy and Nath from
the 100.9 Hit Breakfast show, launched a new national weekend breakfast
show, Jimmy and Nath, plus a new national late night show, of the same
name. As a result, a brand-new Breakfast show launched on Hit 100.9 in
Hobart with Dan and Christie taking the reins from Jimmy and Nath.
On the Gold Coast, Danny Lakey joined the Breakfast show to become
Bianca, Ben and Lakey on 90.9 Sea FM in July, marking his return to the
Gold Coast after 10 years.
Hit’s popular national Drive show, Carrie and Tommy, fl ew some lucky
listeners to London to see Ed Sheeran live at Wembley Stadium, Hit’s fi rst
overseas competition since the pandemic.
The Fox Breakfast Show team of Fifi , Fev and Nick also hit the road, travelling
throughout Melbourne’s suburbs to connect with listeners, to the Gold Coast
for ‘Fifi ’s Big Night Out’ and to Victoria’s Mount Buller to broadcast from the
ski resort as part of its long-term partnership.
The Hit Network welcomed the return of live events this year with the launch
of RNB Fridays ‘Fridayz Live’ in partnership with the Mushroom Group. The
national live concert series features across Sydney, Melbourne, Brisbane,
Adelaide, and Perth in November 2022. Hosted by Abbie Chatfi eld, the Hit
Network’s Hot Nights host, and Fatman Scoop, the concerts are headlined
by Macklemore with other great artists.
2022 Annual Report
Operational Review | 11
Operational Review
Triple M
Triple M reported its largest audience in 17 years, with 2.89 million listeners, in the latest radio ratings
survey 5 in August 2022*. Triple M is also the number one radio network for men aged 25 to 54. Across
its 49 stations nationally, Triple M has 4.28 million listeners*.
The Marty Sheargold Show is the number one Breakfast show in
Melbourne for men aged 40 to 54, while The Rush Hour in Sydney,
Melbourne, Brisbane and Adelaide is number one for men aged 25 to 54*.
All Triple M stations around the country have locally produced Breakfast
shows and the year kicked off with a new Drive show strategy, bringing
new, State-based Rush Hour Drive shows across the country.
The Rush Hour team in Sydney is hosted by Wendell Sailor, Jude Bolton
and Gus Worland, while in Melbourne The Rush Hour with JB and Billy,
now in its 11th year on air, moved from its early evening timeslot to take over
Drive, as did Adelaide’s The Rush Hour with Bernie, Blewey and Jars. In
Perth West Coast Eagle and 2006 Norm Smith Medallist, Andrew Embley
hosts The Rush Hour with Andrew Embley.
In Brisbane and the Gold Coast, nine-time Olympic medal winner Leisel
Jones joined The Rush Hour team of Triple M NRL commentator, Ben
‘Dobbo’ Dobbin, and host of The Scorecard on LiSTNR, Liam Flanagan.
Across Queensland, Elliott Lovejoy and Annabelle ‘AB’ Brett host The Rush
Hour with AB and Elliott.
Triple M and LiSTNR also negotiated streaming rights with the AFL, NRL and
Cricket Australia, to bring all the sports action to listeners. Triple M Cricket
was the smash hit during the Ashes series, One Day Internationals and T20
matches, and the network’s expert commentary team pioneered a new
soundtrack to summer across Australia, introducing cricket on the LiSTNR
app for the fi rst time ever to great success.
The Australian Rugby League Commission also agreed to extend its
long-standing partnership with Triple M and LiSTNR for Audio Broadcast
Rights until 2027, including exclusive commercial broadcasts of four NRL
Home and Away Matches each week, the State of Origin, Representative
Matches and NRL Finals Series, and the NRL Women’s Premiership, Nines
and All Stars. The NRL was broadcast to regional markets on Triple M for
the fi rst time.
Triple M has the largest AFL and NRL metro audience, delivering 47% more
audience than its closest commercial competitor. In the latest radio ratings
survey 5 in August, 626,000 people tuned into Triple M’s AFL broadcast
in Melbourne, Adelaide and Perth, and 471,000 listened to Triple M’s NRL
broadcast, with comprehensive coverage of all games and the best expert
commentary team in the country*.
Triple M’s annual ‘No Talk Day’ returned for the fourth consecutive year
in July to raise awareness around men’s mental health and suicide and
encourage courageous conversations on Triple M’s 45 stations across the
country with support from mental health charity partner Beyond Blue. From
6:00am to 6:00pm on July 4, Triple M removed all regular programming
replacing it with music and candid conversations from Triple M on-air
talent and some of the biggest names in rock, sport and comedy about
their challenges with mental health and the resources they have used to
recognise the signs and work on overcoming feeling helpless.
For the fi rst time this year, Triple M hosted a long-form mental health
discussion, ‘Triple M’s Courageous Talk’, moderated by Triple M No Talk Day
co-founder Shaun Gough with special guests Wayne Schwass, former North
Melbourne AFL footballer, commentator and mental health activist; Dr Grant
Blashki, Lead Clinical Advisor for Beyond Blue; Matt O’Gorman, drummer
for Aussie rock band British India and host of Triple M Aussie; and Christian
McBride, Tour/Production Manager and CrewCare board member.
This year, SCA created a world fi rst dynamic sport advertising campaign
on Triple M that delivered live AFL and NRL Friday night game scores
inside audio ads on broadcast and digital audio platforms, in partnership
with McDonald’s.
Several Triple M Breakfast shows added some serious talent this year,
starting in Sydney as rugby league legend Mark ‘MG’ Geyer joined the
line-up to form Breakfast with MG, Jess, and Pagey. 92.5 Triple M Gold
Coast saw Ali Plath join the Breakfast show alongside Peter ‘Spida’ Everitt
and Sean ‘Flan’ Flanagan. In Adelaide, Laura ‘Loz’ O’Callaghan joined 104.7
Triple M Breakfast alongside popular duo Roo and Ditts to become Roo,
Ditts and Loz.
In Perth, 92.9 Triple M breakfast welcomed Michelle Anderson, from The
Rush Hour Perth team to the Breakfast show with Xav, Michelle and Baz.
And Hobart’s 107.3 Triple welcomed Esther ‘Woody’ Nichols and Andy
‘Tubes’ Taylor a new Breakfast show for the city.
Aussie Rock superstar Dave Gleeson returned to Nights on Triple M as
host of Triple M Nights with Dave Gleeson in Sydney, Melbourne, Brisbane,
Adelaide, Perth, Newcastle, Gold Coast and Hobart.
In Sydney, 104.9 Triple M’s Dead Set Legends Saturday morning show
added Candice Warner joining Triple M legend Dan Ginnane and horse
racing royalty Richard Freedman to talk all things sport. In Adelaide, Tom
Rockliff , Callum Ferguson, and Mark ‘Thomo’ Thomas formed Triple M
Dead Set Legends with Tom Rockliff , Callum Ferguson and Thomo on
Saturday mornings.
In regional markets, Brisbane and Adelaide, the ‘Good Times, Greatest
Hits’ music proposition was implemented for a broader audience appeal.
1152 Triple M Riverina celebrated a big milestone this year – 90 years
on air serving the Wagga Wagga and Riverina region. Over the past 90
years, 1152 Triple M has been a part of so many signifi cant moments of the
region, keeping the community informed during fl oods and bushfi res and
celebrating events such as the establishment of the RAAF base in 1940.
1152 Triple M was part of the proclamation of Wagga Wagga becoming a
city in April 1946, selling the fi rst Chiko Roll at the Wagga Wagga Show in
1951 and waving to Her Majesty Queen Elizabeth II and His Royal Highness
the Duke of Edinburgh in February 1954 during their visit Down Under.
On the New South Wales Central Coast, 107.7 Triple M celebrated its Golden
anniversary as the coast’s oldest radio station with 50 years of broadcasting.
The station has been home to some of Australia’s most well-known radio
personalities including Doug Mulray, John Kerr, comedian Akmal Saleh,
Mike Duncan, Rick Julien, Dwayne Jeff ries, Bob Peters, Cam Humphreys,
Sarah King, Paddy Gerrard, Rob Palmer and many more.
*Source: GFK Radio Ratings. Survey #5 2022 – Metro (FM & DAB+). Gold Coast, Newcastle,
Canberra Survey 2 2022 (FM/AM). Mon-Sun 5:30-12mn Cume. Xtra Insights Mt Gambier, Griffi th,
Coff s Harbour, Rocky-Gladstone, Orange, Dubbo, Bunbury, Warragul, Albury. Xtra Insights
Survey #1 2019. Mt Isa Xtra Insights Survey #1 2020 Geraldton Survey, Port Macquarie, Kingaroy,
Roma, Albany, Maryborough, Hobart, Wheatbelt, Bundaberg, Esperance, Emerald, Gosford,
Toowoomba, Townsville, Shepparton, Kalgoorlie, Cairns, Mildura, Bendigo #1 2021. Karratha, Mt
Gambier, Coff s Harbour, Griffi th, Hobart, Port Hedland Broome Survey, Mackay, Wagga Wagga
#1 12022 (FM/AM) Mon-Sun ROS Cume.
12 | Operational Review
Southern Cross Austereo
Operational Review
SCA iQ
SCA iQ is SCA’s internal centralised hub for media research and insights capability which houses
data from more than 300,000 SCA listeners from around Australia, who provide fi rst-party data and
behavioural insights.
SCA iQ’s Mood Monitor, now in its ninth year, is a major study to survey
metro and regional Australians particularly around mood, concerns and
fi nances. In SCA iQ’s latest instalment of Mood Monitor in May 2022,
Australians are returning to their pre-pandemic levels of positivity and
concerns but with some slight nuances. Our concern for the environment,
healthcare and the Australian economy all exceeded results seen pre
and during the pandemic. Whilst the increasing cost of living has our
‘concerned’ levels rising, it is notable that 48% of Aussies are using audio
to help support their mental health and mood at the moment.
This year, SCA iQ launched a Boomtown version of Mood Monitor for
regional Australians.
SCA is paving the way to measure broadcast audio attention with a
world-fi rst feasibility study to test broadcast audio attention globally in
partnership with Professor Karen Nelson-Field’s Amplifi ed Intelligence.
SCA is the fi rst audio company internationally to pioneer measurement of
broadcast audio attention to understand how live radio infl uences brand
choice to exposed listeners.
Among the initial fi ndings, the study revealed that broadcast audio
commands high attention, on par with other broadcast media, while
SCA’s suite of audio content performed better than some visual attention
counterparts in the digital media space. Commercial Radio and Audio
(CRA) and its members have committed to continue this testing to develop
audio attention metrics for broadcast audio and podcasting.
A new report this year from SCA iQ, called Audio Reach Amplifi er, explored
ad-supported audio’s ability to increase a campaign’s scale and better
impact the total marketing funnel, and analysed the value of audio in
companion reports for Total Audio and Digital Audio.
The report found that 16.8 million Australians are listening to ad-supported
broadcast and digital audio every week – with 49% listening via the
Internet, 40% listening on mobile devices, and 24% via smart speakers.
Ad-supported audio reaches 84% of the critical 25 to 54-year-old
demographic, who are the largest group of listeners. The report found
that digital audio formats extend radio’s reach in this demographic by 24%
more than using commercial radio alone.
Audio Reach Amplifi er is the fi rst in a series of reports, to be released
by SCA iQ, demonstrating the value of audio at every stage of the
marketing funnel.
SCA iQ also undertook Australia’s largest audio ‘Establishment Study’
in Australia for many years. The national study had a 14,000-strong
sample size and was designed to provide robust benchmarks for audio
reach and consumption across all audio platforms. This data is used
in many of SCA’s new audio products and dashboards. Its primary
purpose is to provide deep, granular data to enhance current audio
currency measurement.
An audio incremental reach tool developed by SCA iQ allows
advertising clients to understand why planning more than one audio
channel is advantageous. In addition, SCA iQ also developed a LiSTNR
insights and planning dashboard for advertising clients and our sales
teams. The dynamic, informative dashboard features LiSTNR app user
and content profi les and is designed to infl uence increased usage of
the LiSTNR network. Currently in trial, it will launch in FY23.
2022 Annual Report
Operational Review | 13
Television
SCA changed its principal regional television affi liation in the three
aggregated markets of Queensland, southern New South Wales,
and Victoria to Network 10 in July 2021. SCA had already been
broadcasting Network 10 programming in Broken Hill and Spencer Gulf.
Network 10 has a popular range of programming including The Masked
Singer, MasterChef, Survivor, I’m a Celebrity Get Me Out of Here, The
Bachelor, Have You Been Paying Attention?, The Project, The Living
Room, plus sports Australian A League football, MotoGP, Bellator MMA,
F1 and the Melbourne Cup Carnival.
During the year, SCA also took over national sales representation of
Network 10 programming in northern New South Wales (including Gold
Coast), Tasmania, Western Australia and Mildura. This allows SCA to
off er a simple and scaled ‘Total 10’ sales proposition to national buyers
of advertising on Network 10 programming.
Despite Network 10 programming generally rating lower than SCA’s
former Nine Network affi liation, SCA’s superior sales performance
delivered a market-leading power ratio of revenue to audience of
1.09 in the three aggregated markets. As a result, SCA maintained its
earnings from television with EBITDA of $30 million and an increased
EBITDA margin of 23.7%.
1.09
Commercial Share and Power Ratio
19.0%
20.8%
19.6%
1.08
21.1%
H1 FY22
H2 FY22
Audience Share
Commercial Share
Power Ratio
SCA was also pleased during the year to extend until 30 June 2024 its
longstanding affi liation with the Seven Network in Tasmania, Darwin,
Broken Hill and Spencer Gulf, and Remote Central Eastern Australia.
7 Tasmania is the number one television network in Tasmania, delivering
58.8% commercial share of viewing in zone 1. The network reaches
more than 380,000 unique viewers, or 71.4% of people in Tasmania,
on average each month*.
It was the only commercial network to deliver audience share growth,
up +3.1 points year on year, and delivered the highest year on year share
growth of all commercial primary channels, up +2.1 points. In addition,
7TWO is the number one commercial multi-channel, followed by
7mate and both delivered year on year share growth of 0.8% and 0.2%
respectively. 7mate was the only commercial multi-channel to grow its
audience year on year, up 10.2%*.
SCA Tasmania produces 7 Nightly News, a one-hour, live news bulletin
every day from its Launceston offi ce. 7 Nightly News is the number one
program in Tasmania with a 73.9% commercial share of viewing, which
is up 3.5 points year on year. The News program has 10.5 times more
viewers than its closest commercial competitor*.
SCA’s 7 Tasmania service also delivered 19 of the top 20 regular
programs in Tasmania including 7 Nightly News, Home and Away, The
Voice, Farmer Wants a Wife and RFDS*.
Premium sporting events were big winners for SCA’s 7 Tasmania service.
The AFL Grand Final was the highest rating broadcast in 2021, delivering
more than 80% commercial share of viewing, and the highest AFL Grand
Final audience since 2017, growing 20% year on year*.
The Tokyo Olympics last year had 50% more viewers than the Rio
de Janeiro Olympic Games and reached more than 385,000 unique
viewers, or 72.2% of Tasmanians. Over the summer ratings period, 7
Cricket dominated, reaching 395,000 unique viewers, or 74% of people
in Tasmania*.
SCA is committed to providing local news services for regional television
viewers. In Southern New South Wales, there are nine news updates
each weekday in the Canberra, Wollongong, Wagga Wagga and Orange
markets, and in Victoria nine weekday news updates are broadcast to
Bendigo, Ballarat, Gippsland and Albury. In Queensland, SCA provides
nine news updates each weekday in the markets of Cairns, Townsville,
the Sunshine Coast, Rockhampton and Bundaberg.
SCA also produces nine news updates each weekday in the Hobart
and Launceston markets for its joint venture, TDT, which carries Network
10 programming. In Darwin, SCA broadcasts six news updates and city
specifi c content to meet the requirements of our broadcast licences,
while in regional South Australia, SCA airs a 30-minute news bulletin on
weekdays, with video journalists based in Port Lincoln, Port Pirie, Port
Augusta, Whyalla and Broken Hill.
SCA’s total local news output on weekdays is four hours and 34 minutes.
Overall, SCA’s television assets cover the following parts of regional
Australia:
• Network 10 programming in regional Queensland, Southern New
South Wales, Victoria, Broken Hill and Spencer Gulf, along with
additional national sales representation in Northern New South Wales,
Tasmania, Darwin, Western Australia and Mildura
• Channel Seven programming in Tasmania, Broken Hill and Spencer
Gulf, Darwin and Remote Central and Eastern Australia
• Nine programming in Broken Hill and Spencer Gulf.
SCA also has a multi-year free-to-air program supply agreement with
Sky News Australia. Sky News content is broadcast across SCA’s largest
regional markets on a dedicated 24-hour news channel. Sky News
Regional broadcasts on Channel 56 in 17 of SCA’s regional markets
across Victoria, Southern New South Wales, and Queensland. SCA also
performs sales representation for Sky News Regional on behalf of WIN
in Northern New South Wales, Griffi th, and Mount Gambier/Riverland.
Following a strategic review, SCA has decided to retain its television
assets. The outsourcing of back of house capital-intensive functions has
simplifi ed television operations.
Television also provides SCA with scale in a growing regional market
as well as a marketing platform for SCA to further mature LiSTNR in
regional Australia.
Source: Regional TAM Data, TAS, Total People, Consolidated 7, 1 July 2021- 30 June 2022, 1800-2230 unless specifi ed, Sun-Sat, Commercial share, AUD, Commercial Channels (using content
affi liates NOT broadcaster), Regular programs (0200-2600, grouped, min 3 eps, sports ungrouped, excl. encores, repeats and specials), Top telecasts (0200-2600, ungrouped), Avg monthly reach =
1 min cume (0200-2600), Tokyo Olympics reach (entire telecast incl rpts 21/7-9/8, excl. Paralympics), Cricket based on typology, Summer: weeks 49-6.
14 | Television
Southern Cross Austereo
Boomtown
This year the Boomtown collective has
capitalised on the transformation that has
occurred in regional Australia seeing population
growth in regional areas outpacing metro for
the fi rst time in four decades.
Representing the 9.1 million people living in
regional Australia, including major business
and population centres like the Gold Coast,
Newcastle, Geelong, Toowoomba, Hobart,
Darwin and Canberra; Boomtown has
experienced unprecedented population
growth in the past year due to the ‘work
from anywhere’ phenomenon driven by the
COVID-19 pandemic.
As a result, metro migration has occurred on a scale never seen before,
with young urban professional families and digital nomads accounting for a
signifi cant proportion of those relocating to Boomtown. This has created a
‘spiral of success’ for Boomtown, with record job vacancies on off er, 75% of
which are for highly skilled and professional roles, and a property boom in
regional Australia the likes of which hasn’t been seen for 15 years.
In addition, Boomtown residents are happier, with 79% of people who
moved to regional Australia ‘extremely satisfi ed’ with their move.
The Boomtown collective comprises eight major media stakeholders: SCA,
WIN, Seven West Media, ARN, ACM, Imparja, News Corp and oOh!. The
collective continues to successfully demonstrate the value of advertising to
regional Australians among national advertisers and their media agencies.
After four years in market, Boomtown has helped move regional media to
a position of strength, with trade tracking studies showing that awareness,
consideration, usage and eff ectiveness are at close-to-saturation levels
amongst its media audience.
There has been a 15-point uplift in the Boomtown Net Promoter Score
(NPS), demonstrating a strong propensity to recommend Boomtown and
regional media amongst its target audience.
Boomtown will continue to deliver its mission statement: ‘Connecting
ambitious brands with the power of regional media’.
Key initiatives
The winner of Boomtown’s ‘Win a million dollars in regional media’
competition, a multi-platform regional campaign that has delivered
exceptional results for leading Australian pasta brand San Remo,
demonstrated the power of regional media to boost brand awareness
and sales.
In one of the most comprehensive cross-media case studies released
by Boomtown, San Remo turned a $1 million regional media advertising
investment into impressive results. The campaign recorded 47% category
growth across the campaign regions, a 9.4% sales increase in spaghetti,
0.9% increase in dollar value and 0.6% increase in volume share in the
highly competitive specialty foods category.
There have been continued improvements to the Boomtown Hub, aimed at
simplifying the process of planning regional media through interactive media
coverage maps and search tools, to update and refi ne its eff ectiveness.
Since its launch in 2021 the Hub has attracted more than 4,000 users.
Throughout the year, Boomtown delivered another series of its successful
educational Masterclasses, facilitated by marketer and academic Gaye
Steel. These classes continue to receive excellent feedback with an
average rating score of 9.1 by participants. An online self-paced Masterclass
is also in currently in development, empowering anyone to learn about
Boomtown at any time.
Boomtown continued its partnerships in trade, including AdNews
LIVE, the Independent Media Agencies of Australia, presenting at the
IMAA Operation Bounceback event in April, and the Media Federation
of Australia’s NGEN program, industry leaders in training new starters
in the industry.
Also in development is the ‘Boomtown Agency Advocate Program’,
ensuring we have Boomtown champions in all major media agencies
across Australia.
The ‘Boomtown City Spotlight’ campaign also launched and is designed
to showcase Australia’s 14 major regional cities, bust some myths about
regional areas, and promote regional Australia and its residents as
contemporary, vibrant and profi table markets.
This year, Boomtown will continue to improve its suite of tools, including
the Boomtown Hub, education, case studies and insights. The monthly
newsletter will also continue, which reports an average open rate of 41.6%,
an extremely high engagement with its audience.
More information is available on the Boomtown website:
https://boomtown.media/.
2022 Annual Report
Boomtown | 15
Our People
Values
SCA prides itself on creating a culture where people feel valued and
can perform at their very best. We don’t just focus on what we do; we
care about how we do it. SCA’s fi ve values guide day-to-day decisions
and shape individual and collective behaviour.
• We COLLABORATE: We work as a team.
Together, we deliver our best.
• Take INITIATIVE: Each of us is responsible for
exceeding expectations. We go the extra mile.
• Maximise CREATIVITY: We lead with fresh
thinking. We create winning ideas.
• Have COURAGE: We always show strength
and spirit. We stand up for our beliefs and
each other.
• Act with INTEGRITY: We do what’s right and
act with transparency and honesty.
We deliver on our promises.
Our values are at the heart of all that we do and are indicative of our
company culture, for which we were awarded a Cultural Sustainability
Award from Human Synergistics following our most recent culture audit
in 2021.
Diversity and Inclusion
SCA believes that business performance is enhanced by a diverse
workforce where employees are treated with respect and fairness
and have equal access to opportunities. SCA aims to provide a living,
creative organisation that understands the diversity of its audiences
and advertisers.
At present, women occupy 40% of senior management positions
and 53% of middle management positions at SCA. We have been
focused on programs introduced in recent years to encourage
fl exible work practices to help our people – both men and women –
to successfully manage their career and family life through a practical
work-life balance, as well as providing learning opportunities for ‘future
executive’ women to ensure we are succession planning for equitable
hiring decisions.
SCA has rolled out an enhanced workplace fl exibility framework to
ensure the Company continues to prioritise employee wellbeing
while delivering exceptional outcomes for our audiences, advertisers
and shareholders.
Developing and looking after our people
SCA continues to invest in leadership with a focus on the skills that
SCA requires of its leaders now and in the future. SCA takes a values-
based approach to leadership. We train and develop our leaders to
exhibit values-based behaviours that align to our Code of Conduct
and leadership behaviours framework and recruit talent that show
capability in these areas.
SCA has high expectations of its leaders. We review leadership styles
through a 360-degree feedback tool called the Leadership Styles
Inventory (LSI) with our partner Human Synergistics. SCA puts at least
40 leaders through the LSI process annually and, once this process is
completed a supporting coaching program is put in place to support
development in highlighted areas. SCA’s People and Culture Team is
an accredited practitioner of the LSI tool. The LSI tool indicates SCA’s
Senior Management Team has a highly constructive culture.
At SCA, Learning and Development is a key focus for all our people,
to equip them with the skills they require to deliver our strategic goals.
Accordingly, we off er a robust suite of learning including:
• Women in Content Program
• Executive Ready Women in Leadership Program
• Leaders of the Future Program
• SCA Leads Leadership Development Program
• ‘Leading Teams’ for National Executive Functional Groups
• LSI and Coaching for Leadership Development
• Mentoring Program
• Specialised high performance sales training
• Managing Mental Health training
• Managing Underperformance training.
SCA manages workplace health and safety risks in an active way. Local
managers monitor and manage risks at their workplaces, ensuring that
risks are identifi ed, assessed and managed proactively and not only
in response to an incident. Key risks managed on a day-to-day basis
include security arrangements for high profi le performers and on-air
announcers and conducting ‘stunts’ for on-air radio content. Measures
have been implemented in all our locations to educate our people about
workplace risks associated with COVID-19 and to manage those risks.
An important outcome of SCA’s outsourcing of television playout and
broadcast transmission services has been to reduce the range of
workplace risks for which SCA is directly responsible. Risks relating to
engineers travelling and working in remote areas and at heights on high
voltage equipment and managing asbestos in old buildings in regional
areas are now managed directly by specialist service providers.
Proactive steps are taken to promote the mental health and wellbeing
of SCA’s people, including a wellbeing portal on SCA’s intranet, training
on managing mental health in the workplace, and an employee
assistance program and counselling service.
Governance and sustainability
SCA’s Corporate Governance Statement demonstrates the extent
to which SCA has complied with the ASX Corporate Governance
Council’s Principles and Recommendations and corporate governance
best practice. SCA also publishes a Sustainability Report reporting
on how we manage our impacts on people, the environment and the
economy. Our Corporate Governance Statement, Sustainability Report
and related corporate governance policies are available on SCA’s
website (http://www.southerncrossaustereo.com.au/investors).
16 | Our People
Southern Cross Austereo
SCA Embrace and Community
SCA Embrace is SCA’s charity initiative launched in September 2016. Under our national framework of
supporting selected charities for a two-year period, SCA engages with these charities to ensure there is
growth in awareness (and fi nancially) during this period.
Through our diverse employee group, SCA provides the charities with support through radio, digital and
television advertising; digital, social and research support; event and meeting spaces; brainstorming
sessions; concert and sporting tickets; on-air interviews; and staff volunteering.
SCA’s current national charity partners are Foodbank Australia
and Make-A-Wish Australia. In the initial six months of these
partnerships, we have provided more than $18 million of in-kind radio,
digital and television advertising, along with digital, social, creative and
research support.
Due to the nature of this charity program SCA was able to support
Foodbank in the 2022 Queensland and New South Wales fl oods
without delay by providing emergency support on-air messaging,
social posts for awareness and donation requests; as well employees
volunteering in the warehouse environment.
We continue to be very proud of SCA Embrace, a program that has
provided more than $160 million of in-kind advertising over the past six
years.
In July 2021 SCA extended its charity program to support local charities
in regional markets. More than 20 local offi ces partnered with an
organisation in the community and provided similar opportunities as our
national partners have access to. During the fi rst year of the local model
SCA provided close to $1 million of in-kind radio advertising as well as
local team support.
Testimonials
Make-A-Wish Australia CEO, Sally Bateman:
Foodbank Australia CEO, Brianna Casey:
“We are incredibly grateful for the amazing in-kind support we have
received from SCA since the commencement of our partnership. The
exposure across metro and regional Australia has helped broaden
our reach. It has driven our biggest uplift in applications into the wish
program since the pandemic began, which we’re so pleased about.
“The guidance and insights shared by the radio and television teams
have also helped us connect with a new audience of givers, with
our most recent fundraising eff orts up over 20% in what we know
continues to be such a challenging time for everyone. We’re genuinely
amazed by what together we’ve achieved in such a short time. In the
year ahead, we look forward to ensuring everyone at SCA has the
opportunity to become a fully-fl edged member of our ‘Wishforce’, so
that we can make the impossible, possible for more wish kids.”
“In only a few short months, SCA has become a treasured member
of the Foodbank family, wrapping their arms around us every time
we swing into action responding to fl oods, the cost of living crisis, the
ongoing challenges of COVID and more.
“The SCA team knows how time-sensitive disaster response eff orts
are, and when the devastating March 2022 fl oods hit communities
across both New South Wales and Queensland, they had CSAs and
News Alerts ready within a matter of hours. SCA’s active promotion of
Foodbank campaigns and appeals has helped generate much-needed
funds to help us secure essential food and grocery items for natural
disaster response and recovery, as well as everyday food relief.
“Between skyrocketing electricity bills, increased food and grocery
prices, the housing crisis, fl oods, supply chain disruption and the global
pandemic, it’s no wonder we are seeing increased demand for food
relief, and a whole new cohort of people in need of assistance. We’re
working hard to ensure every person who needs food relief receives it,
and we couldn’t be more delighted to have SCA right there with us as
we help change the lives of so many.”
SCA YourWellbeing
After a successful 2.5-year relationship with Beyond Blue under SCA
Embrace, SCA has continued this very strong partnership under our mental
health and wellbeing pillar, SCA YourWellbeing.
Similar to previous benefi ts, Beyond Blue continues to receive in-kind
advertising as well as support from all aspects of the business. Beyond Blue
continues to support SCA with its expertise and knowledge to ensure we
are providing a safe and well workplace and has assisted with our mental
health and wellbeing strategy.
Since January 2022 SCA has provided Beyond Blue with more than
$6 million of in-kind advertising and in July 2022 achieved its fourth national
Triple M ‘No Talk Day’ on-air event to raise awareness around men’s mental
health and suicide.
2022 Annual Report
SCA Embrace and Community | 17
SCA Embrace and Community
Connecting and supporting communities
SCA’s local news and information services on radio and television keep communities up to date on the issues that matter most to them, as well as providing
local skilled jobs, supporting local businesses, providing local advertising opportunities, and supporting local events, charities and community initiatives.
SCA produces nightly news bulletins for its Channel Seven television service in Tasmania and local television news updates in regional Victoria, southern
New South Wales, regional Queensland, and other regional television markets.
SCA prides itself on its ‘fi ercely local’ engagement with communities and this support has ramped up now COVID lockdowns have eased and in the wake of
the devastating Queensland and New South Wales fl oods.
In addition to the SCA Embrace national charity program, SCA is an active contributor to communities. Here are just a few examples of SCA engaging with
local communities, resulting in meaningful connections and contributions, from the past year:
Triple M Bundaberg’s Christmas Crusade
Triple M Bundaberg’s annual Christmas Crusade was its most successful campaign to date.
In partnership with local charity Angels Community Group, the Triple M team rallies the community to
ensure big smiles and relief as no child will miss out on having a very special Christmas. The campaign
saw thousands of toys donated, fi lling the entire offi ce, helping more than 700 families who qualifi ed.
Sue Tasker from Angel Community Group said: “I cannot express the impact this Crusade has on
children who otherwise may have missed celebrating Christmas. The ability for JB and Jules to get the
word out and rally the community was amazing.”
Triple M Central Queensland’s ‘Good Luck Truck’
The Good Luck Truck is a successful hallmark of the Triple M brand, however 2022 saw it run for the
fi rst time in Central Queensland, and with great success. Local fi nancial organisation The Capricornian
Bank joined up in funding the program to bring much needed relief to the region.
After just three days of promotion, we received 53 genuine entries of people out there looking for
support or a bit of a leg up and ended up with hundreds of entries. This was a clear indication that
things were getting tough out there with the housing and rental markets, cost of lettuce and everything
else putting the pinch on listeners. The challenge became how to have the most meaningful impact for
the most people, so over a four-week campaign Triple M did everything from paying bills and buying
groceries to buying washing machines and sending someone for a spa day.
Hit Central Queensland’s Sleepout:
Sarge, Hit Central Queensland’s Workday announcer, took to the streets, literally, for Rockhampton’s
fi rst ever sleepout event. Designed to help break the cycle of homelessness and generate funding
and support for the many people suff ering in the community, Sarge partnered with Harvey Norman,
Live Free Support Services, and other members of the community to facilitate a massive fundraising
event culminating in the sleepout. The fundraiser was a big night with everything from helicopter tours
to a $14,000 bedding package going under the hammer for the cause.
Triple M Townsville ‘Pricey’s Good Luck Truck’
Each year Triple M calls on listeners to nominate someone that needs a bit of a helping hand, with
Pricey’s Good Luck Truck. In early 2021, Mel Landon was diagnosed with stage 4 breast cancer. Her
husband Richard quit his job to help care for Mel and their two young kids. Given Mel’s young age
and her sheer determination, they decided to treat her with a very aggressive form of chemo, which
in turn damaged her heart leaving it with 20% capacity.
The family lives on Magnetic Island and their car had been playing up but given their signifi cant
fi nancial strain, they were not in a position to maintain it. Not only was Triple M able to coordinate
getting the car to the mainland, fi ve local businesses pitched in and repaired it.
A $250 groceries voucher was also donated, and Triple M pitched in with a gift basket and toys for
the kids for Christmas. We managed to turn this around within 36 hours.
Sadly, Mel lost her battle in August. We are honoured to have had the opportunity to help their family
during this diffi cult time and thank the local community for their support.
Hit 103.1 Townsville’s ‘Hit the Hill’
Hit Townsville has again ‘hit the hill’ to raise awareness for mental health and suicide prevention. The
whole Hit team was involved, broadcasting live at the top of Townsville’s iconic Castle Hill to culminate
a whole week of activity. Close to $10,000 was raised for a local charity through this new, virtual style
event in 2021.
18 | SCA Embrace and Community
Southern Cross Austereo
SCA Embrace and Community
Hit Central Coast Maz and Lakey at Wagga Mardi Gras
In what was the biggest LGBTQI+ celebration in regional Australia, Hit NSW’s Breakfast show Maz
and Lakey hit the town to help host the Wagga Mardi Gras 2022. Thousands of locals lined the
streets as the parade, including featuring the Hit 93.1 team, made its way to a big celebration at
local parklands. Maz and Lakey engaged with the community through stage presence and one to
one mingling.
Triple M Central Coast Coast Shelter Sleep Out
Teaming up with local charity partner Coast Shelter, local Afternoons announcer Justin Coombes-
Pearce spent a night under the stars at Central Coast Stadium, alongside several other Coastie
personalities and business owners. Proceeds raised for the event went directly to the homeless
community of the Coast, as well as victims of domestic violence utilising Coast Shelter facilities to
escape their home environment.
Hit and Triple M ‘Wagga Wagga Takes 2’
The SCA Wagga Wagga team once again were heavily involved in Wagga’s biggest annual
fundraising event ‘Wagga Wagga Takes 2’. Hit and Triple M have been involved in this event since it
started in 2007. Hit and Triple M’s support isn’t just limited to promotion of the event, but every year
the stations have representation in the show.
The event pairs up a local celebrity with a local entertainer, and together they sing for their
chosen local charity. This year, SCA Wagga Sales Manager Trent Cohalan got up on stage to
perform Car Wash to raise money for charity. SCA Regional Content Director, Duncan Potts is the
MC of the show, with support from Triple M Breakfast host Leigh Ryan and Hit Workday announcer
Dane McGuirk.
In 2022, 10 acts were part of the show, and collectively raised $200,000 for 10 local Wagga
charities. Since the show began back in 2007, Wagga Wagga Takes 2 has returned nearly
$4 million to local Wagga charities.
Hit Albury ‘City2City’
City2City is a run/walk between our two major border towns, raising money for local hospitals in
Albury Wodonga Health. Every year, since it began in 2015, Hit Albury gets involved in some way,
with our announcers hosting the start line, fi nish line and even multiple staff members running
themselves. This year, Hit’s Tyson Witham helped launch the event as MC at the starting line,
where $70,000 was raised for Albury Wodonga’s Community Care Services.
Triple M Albury ‘Carevan’
Triple M Albury’s fundraising for Carevan got turned on its head this year with two incredible
displays of generosity. Starting off with a week of auctions, Rob from Zypex Australia heard
about our eff orts to raise money for a new van and bid an incredible $5,000 for a copy of Border
Monopoly. However, when discussing with the charity exactly what they did and how much a new
van would assist in their eff orts he decided to buy them one so Carevan could continue helping
out so many across the region.
Hit and Triple M Albury ‘Border Dance for Cancer’
The Stars of the Border Dance for Cancer is a yearly event on the Border that raises money for
the Cancer Council of NSW with funds also going to the Albury Wodonga Cancer Centre. Over its
eight years, someone from Hit or Triple M has participated in the event as a ‘dancer’. In May 2022,
Triple M’s Guy Mylecharane had a dance performance and Hit’s Tyson Witham hosted the event,
where along with some Border locals they raised $300,000 to help fi ght cancer.
Triple M Bendigo Guide Dogs Victoria
Cogho and Kylie recruited Triple M listeners to assist in naming a new puppy at Guide Dogs Victoria.
After 30+ suggestions from our audience they settled on Banjo. Guide Dogs Victoria brings Banjo
into the show often to update us on his progress as he gets ready to serve his fi rst family with Guide
Dogs Victoria.
Triple M Shepparton
During COVID lockdowns Shepparton copped it a little harder that most Victorian towns and
the region relied heavily on front line workers. Leisha Brodyk, the then Triple M Shepparton
Breakfast announcer, dipped into her own pocket to provide these workers with pizza on a
Saturday afternoon.
BANJO
2022 Annual Report
SCA Embrace and Community | 19
The Board and Leadership Team
Robert Murray
Chairman and Independent Director
Appointed: 1 September 2014
Most recently elected by shareholders: 30 October 2020
Board Committees: Nomination Committee (Chair)
Rob Murray became Chairman of the Company on 19 August 2020.
Rob had a successful career in sales, marketing and general management having served most recently
as the CEO of Lion (formerly Lion Nathan), one of Australasia’s leading food and beverage companies,
including during its acquisition by Kirin Holdings in 2009. Before joining Lion Nathan in 2004, Rob worked
for Procter & Gamble for 12 years, and then for eight years with Nestlé, fi rst as MD of the UK Food business,
and then as CEO of Nestlé Oceania.
Rob brings valuable strategic and commercial insight to the Board, along with his in-depth understanding of
consumer behaviour and global experience in mergers and acquisitions and other corporate transactions.
He is a director of the Bestest Foundation, and Advisory Chair of the Hawkes Brewing Company. He was
previously a director of Metcash, Dick Smith Holdings, Super Retail Group and Linfox Logistics.
Glen Boreham AM
Independent Director
Appointed: 1 September 2014
Most recently elected by shareholders: 13 October 2021
Board Committees: Digital Transformation Committee (Chair), People & Culture Committee,
Nomination Committee
Glen’s executive career culminated in the role of CEO and Managing Director of IBM Australia and New
Zealand in a period of rapid change and innovation from 2006 to 2010. He was the inaugural Chair of Screen
Australia from 2008 to 2014, and chaired the Australian Government’s Convergence Review of the media
industry. The Board benefi ts from Glen’s extensive knowledge, insights and networks in the technology and
data industries. Having lived in Asia, Europe and Australia, Glen brings a global perspective.
Glen is also a director of Cochlear and Link Group and was formerly Chair of the Advisory Board at IXUP
where he remains a Strategic Adviser. He was previously Chair of the Industry Advisory Board at the
University of Technology Sydney, Chair of Advance, representing the one million Australians living overseas,
as well as Deputy Chair of the Australian Information Industry Association and a Director of the Australian
Chamber Orchestra. In 2010, he became a founding member of Australia’s Male Champions of Change
group. Glen is a Member of the Order of Australia for services to business and the arts.
Carole Campbell
Independent Director
Appointed: 1 September 2020
Most recently elected by shareholders: 30 October 2020
Board Committees: Audit & Risk Committee (Chair)
Carole Campbell has over 30 years’ fi nancial executive experience in a diverse range of industries
including professional services, fi nancial services, media, mining and industrial services. Carole started her
career with KPMG and has held executive roles with Macquarie Group, Westpac Institutional Bank, Seven
West Media, Bis Industries and Merivale.
Carole transitioned to a non-executive career in 2018 and is a non-executive director of GUD Holdings
Limited where she chairs the audit committee at both companies. She was previously a non-executive
director of IVE Group Ltd and Humm Group. Carole is also Deputy Chair of Council of the Australian Film
Television and Radio School.
Carole is a Fellow of Chartered Accountants Australia and New Zealand and brings extensive experience
in accounting, treasury, fi nance and risk management to her role on the Board and as Chair of the Audit &
Risk Committee.
20 | The Board and Leadership Team
Southern Cross Austereo
The Board and Leadership Team
Ido Leffl er
Independent Director
Appointed: 30 October 2020
Most recently elected by shareholders: 30 October 2020
Board Committees: Digital Transformation Committee, People & Culture Committee
Ido Leffl er has long and successful experience in developing digital brands and extensive networks in the
start-up communities of Silicon Valley and Australasia. Ido is the co-founder and Chief Executive Offi cer
at Yoobi, a school supplies company that engages kids through bright colours, cool designs and, most
importantly, cause. He is also a co-founder of Yes To Inc. – a leading global natural beauty brand; and of
Beach House Group – a global consumer product house.
Ido is a non-executive director of Vestergaard and The Lux Group. He was a non-executive director
of Spark New Zealand Limited for six years until November 2020. Ido also sits on other corporate and
advisory boards, including as an emeritus member of the United Nations Foundation Global
Entrepreneur Council.
Heith Mackay-Cruise
Independent Director
Appointed: 30 October 2020
Most recently elected by shareholders: 30 October 2020
Board Committees: Audit & Risk Committee, Digital Transformation Committee
Heith Mackay-Cruise’s executive career included senior roles in Marketing for Pepsi-Cola in Australia and
Australian Consolidated Press and as CEO and Managing Director of PBL Media in New Zealand, Study
Group and Sterling Early Education.
Since 2014, Heith has focused on non-executive roles including four years on the board of the ASX-listed
Bailador Technology Investments Limited, and privately owned groups including Literacy Planet, hipages
Group, LifeHealthcare, and his ongoing roles as Chair of Straker Translations Ltd and UP Education Limited
and on the boards of Orro Group Holdings Pty Ltd and the Australian Institute of Company Directors.
Heith brings to the Board his executive leadership experience, as well as global platforms exposure and
marketing and digital knowledge.
Helen Nash
Independent Director
Appointed: 23 April 2015
Most recently elected by shareholders: 30 October 2020
Board Committees: Audit & Risk Committee, People & Culture Committee (Chair),
Nomination Committee
Helen Nash has more than 20 years’ executive experience in consumer packaged goods, media and quick
service restaurants. As Chief Operating Offi cer at McDonald’s Australia, she oversaw restaurant operations,
marketing, menu, insights and research, and information technology. This mix of strategic and operational
experience allows Helen to bring broad commercial skills and acumen, as well as a consumer focus, to
the Board. Helen also brings robust fi nancial skills to her role having initially trained in the UK as a Certifi ed
Management Accountant.
Since transitioning to her non-executive career in 2013, Helen has served as a director of companies in a
range of industries. She is Chair of Inghams Group Limited, a director of Metcash Ltd, and was formerly a
director of Pacifi c Brands Ltd and Blackmores Ltd. Our Board benefi ts from Helen’s governance experience
and skills, including her membership of audit and remuneration committees at these other companies.
2022 Annual Report
The Board and Leadership Team | 21
The Board and Leadership Team
Grant Blackley
Managing Director and CEO
Appointed: 29 June 2015
Most recently elected by shareholders: 29 October 2015
Grant Blackley has enjoyed a distinguished career with more than 30 years’ experience in the media
and entertainment sectors. Grant joined the Board in June 2015 as Chief Executive Offi cer and Managing
Director and is responsible for leading the strategic and operational performance of the company. Grant
is the Chairman of Commercial Radio Australia and a director of the Australian Association of National
Advertisers. He has in the past served as a director of Free TV Australia. He has served in numerous senior
leadership roles including at Network 10, as CEO from 2005 to 2010. Before becoming CEO at Network 10,
Grant held key roles in network sales, digital media and multi-channel program development as well as
being responsible for Group strategy, acquisitions and executive leadership and development.
Rebecca Ackland
Chief People and Culture Offi cer
Appointed: May 2022
Rebecca Ackland is an experienced people and culture leader and has had a successful career at SCA
including key roles within talent acquisition, people operations and as People and Culture Manager.
Rebecca passionately champions SCA’s award-winning culture, ensuring we place our people and our
values at the core of what we do every day.
As Chief People and Culture Offi cer, Rebecca is responsible for development and execution of SCA’s
people and culture strategy and leads a team of experienced executives across specialties of talent, human
resources operations, capability and learning, as well as people service
Dave Cameron
Chief Content Offi cer
Appointed: January 2020
Dave Cameron has been with SCA for over 25 years and brings to the role of Chief Content Offi cer a
wealth of experience and expertise in content strategy, programming and premium talent management.
Dave has spent several years in Content and Music Director roles and prior to his appointment to Chief
Content Offi cer held the position of General Manager of the Melbourne offi ce.
As Chief Content Offi cer, Dave is responsible for overseeing and delivering strategic leadership and
creative excellence for SCA’s key content initiatives across all of its stations including FM, DAB+ and
extended digital and associated on-demand content.
22 | The Board and Leadership Team
Southern Cross Austereo
The Board and Leadership Team
Nikki Clarkson
Chief Marketing Offi cer
Appointed: January 2020
Nikki Clarkson is an experienced marketing and communications executive with over 20 years of proven,
award winning experience across multiple industries. Prior to joining the Leadership Team, Nikki held the
position of Head of Marketing and Communication at SCA for 10 years and has also held senior executive
positions in creative advertising agencies including Clemenger Harvie Edge.
As Chief Marketing Offi cer, Nikki is responsible for all marketing and communication strategy and execution
for SCA’s radio and TV brands, all on-demand brands, trade and corporate marketing and Group corporate
communications and publicity.
Brian Gallagher
Chief Sales Offi cer
Appointed: July 2015
Brian Gallagher is a media executive with strong commercial and broadcast experience across the metro
and regional media markets gathered over 30 years. Brian has worked in radio, free-to-air TV, pay TV,
content marketing and program production. Brian has worked with the Nine Network and Network 10,
and was CEO of Ignite Media Brands prior to joining SCA as Chief Sales Offi cer.
Brian is responsible for the development and implementation of an overall sales strategy for the Group,
including driving the entire sales operation across SCA’s full suite of media channels and brands.
Stephen Haddad
Chief Technology Offi cer
Appointed: June 2018
Stephen Haddad is an experienced CIO/CTO and business transformation executive who has
demonstrated his ability to drive strategic business growth over 20 years in Australian media, fi nance and
consulting organisations. Prior to this role, Stephen held CIO roles at Bauer Media and Fuji Film and senior
roles within banking and telecommunications.
Stephen is responsible for all technology domains across SCA, including Business Systems, Corporate
Networks and Infrastructure, Digital Design and Development, Audio Engineering Technology and
Operations and Television Broadcast Engineering and Operations. Stephen also has management
responsibility for the Project Management Offi ce and Procurement functions.
2022 Annual Report
The Board and Leadership Team | 23
The Board and Leadership Team
John Kelly
Chief Operating Offi cer
Appointed: February 2016
John Kelly is an experienced executive who has previously held senior executive roles in large Australian
sporting and media organisations. John was COO at Football Federation Australia from 2013 to 2015 where
his role encompassed strategy and media rights. Prior to that role, John spent over 16 years in various
Executive and Director roles at Network 10, including over eight years as Group CFO. John is a Chartered
Accountant and commenced his career at KPMG where he progressed to the role of Manager.
As Chief Operating Offi cer, John is responsible for leading the Operations function of the business to ensure
alignment and delivery of the corporate strategy. This includes overseeing SCA’s general management
teams, strategy, research and insights and digital audio as well as facilitating SCA’s external key sporting
rights agreements and key digital audio partnerships.
Nick McKechnie
Chief Financial Offi cer
Appointed: September 2014
Nick McKechnie is a Chartered Accountant with over 20 years’ experience. Nick was the CFO of ConnectEast
from 2009 to 2014 and Group Financial Controller from 2007 to 2009. Prior to this role Nick held a variety of
senior fi nance roles at Virgin Media in the UK and commenced his career with Arthur Andersen.
As CFO of SCA, Nick is responsible for the fi nancial stewardship of the company, including the allocation
of capital and resources and the management of returns to shareholders. Financial objectives include
optimising the cost of capital through use of an appropriate balance of equity and debt capital and through
seeking to invest capital in projects that result in returns above the company’s existing Return on Invested
Capital. Nick is responsible for managing relationships and communication with providers of equity and
debt capital and for ensuring a strong and eff ective governance framework exists.
Nick has tendered his resignation. The search for a replacement is underway and Nick will remain with the
business until a replacement has been appointed.
24 | The Board and Leadership Team
Southern Cross Austereo
Financial
Report
2022 Annual Report
Financial Report | 25
Contents
Corporate Governance Statement
Directors’ Report
Review and Results of Operations
Distributions and Dividends
Signifi cant Changes in State of Aff airs
Events Occurring After Balance Date
Likely Developments and Expected Results of Operations
Indemnifi cation and Insurance of Offi cers and Auditors
Non-Audit Services
Environmental Regulation
Information on Directors
Information on Company Secretary
Meetings of Directors
Remuneration Report
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Key Numbers
Capital Management
Group Structure
Other Notes to the Financial Statements
Directors’ Declaration
Independent auditor’s report to the members of Southern Cross Media Group Limited
Additional Information
Corporate Directory
The fi nancial statements were authorised for issue by the Directors on 22 August 2022.
The Directors have the power to amend and re-issue the fi nancial statements.
27
27
27
30
30
30
30
30
30
30
31
33
33
34
53
54
55
56
57
58
59
74
81
83
88
89
95
97
26 | Financial Statements
Southern Cross Austereo
Directors’ Report
For the year ended 30 June 2022
Corporate Governance Statement
The statement outlining Southern Cross Media Group Limited’s
corporate governance framework and practices in the form
of a report against the ASX Corporate Governance Council’s
Corporate Governance Principles and Recommendations,
4th Edition, will be available on the Southern Cross Austereo
website, www.southerncrossaustereo.com.au, under the investor
relations tab in accordance with listing rule 4.10.3 when the
2022 Annual Report is lodged.
Directors’ Report
The Directors of Southern Cross Media Group Limited (‘the
Company’) submit the following report for Southern Cross Austereo,
being Southern Cross Media Group Limited and its subsidiaries
(‘the Group’) for the year ended 30 June 2022. In order to comply
with the provisions of the Corporations Act 2001, the Directors’
Report is as follows:
Directors
The following persons were Directors of the Company during the
whole of the year, unless otherwise stated, and up to the date
of this report:
– Rob Murray (Chairman)
– Grant Blackley (Managing Director)
– Glen Boreham
– Carole Campbell
– Ido Leffl er
– Heith Mackay-Cruise
– Helen Nash
– Melanie Willis
Principal Activities
The principal activities of the Group during the course of the
fi nancial year were the creation of audio content for distribution on
broadcast (AM, FM and DAB radio) and digital networks. The Group
also broadcasts free-to-air television content in regional markets.
These media assets are monetised via revenue generated from the
development and sale of advertising solutions for clients.
There were no changes in the nature of the Group
during the full year.
Review and Results of Operations
Operational Review
Group Results
The Group reported revenues of $519.7 million, a decrease
of 1.7% on the prior year revenues of $528.6 million. Earnings
before Interest, Taxes, Depreciation and Amortisation (‘EBITDA’)
of $85.6 million, a decrease of 32.0% on prior year EBITDA of
$125.9 million. Excluding government grants year on year, EBITDA
was comparable at $83.9 million for FY22 and $85.5 million for
FY21. Government grants include JobKeeper and Public Interest
News Gathering as described in Note 6 ‘Government Grants’ to
the Financial Statements. Net loss after tax was $153.7 million
for the year ended 30 June 2022, down from a profi t after tax of
$48.1 million for the same period in the prior year.
Current year results include impairment charges against the
audio intangible assets of $250.9 million ($178.6 million net of tax)
and impairment of investments of $0.8 million. Excluding these
impairment charges, net profi t after tax was $25.7 million.
EBITDA is a measure that, in the opinion of the Directors, is a useful
supplement to net profi t in understanding the cash fl ow generated
from operations and available for payment of income taxes, debt
service and capital expenditure.
EBITDA is useful to investors because analysts and other
members of the investment community largely view EBITDA
as a widely recognised measure of operating performance.
EBITDA disclosed within the Directors’ Report is equivalent
to ‘Profi t before depreciation, amortisation, interest, fair value
movements on fi nancial derivatives and income tax expense
for the full year’ included within the Consolidated Statement of
Comprehensive Income.
Signifi cant Items
At 30 June 2022, the Group recognised impairment charges
against intangible assets of $250.9 million, which related to an
impairment in the carrying value of radio licences, goodwill and
brands in the Audio Cash Generating Unit (‘CGU’). There was
also a related derecognition of a deferred tax liability in respect
of certain brands and licences for $72.3 million. The impairment
refl ects an increase in the discount rate; slower than expected
recovery from the economic impacts of the COVID pandemic;
independent estimates of radio broadcast growth rates showing
declines over the forecast period; and a more pessimistic weighting
towards the Lower Case due to increased potential for worsening
economic conditions.
There were also $0.8 million of impairment charges against
investments and $4.0 million of other signifi cant items relating
to restructuring costs and expenses associated with terminated
fi nance systems refresh.
Government Grants
As part of its response to COVID-19, in March 2020 the Australian
Government announced various stimulus measures resulting from
the economic fallout due to the coronavirus lockdown.
JobKeeper
The Group determined it was eligible to receive the initial
JobKeeper Payment Scheme (‘JobKeeper’) for the period
April to September 2020 and the fi rst period of the extension
from October to December 2020. During the prior year SCA
recognised $31.9 million in JobKeeper funding and nil for the year
ended 30 June 2022.
PING
The Group applied and was found eligible for funding under the
Commonwealth Government’s Public Interest News Gathering
(PING) program. During the prior year SCA received $10.3 million
for the period September 2020 to August 2021 of which $1.7 million
was recognised as income during this fi nancial year and $8.6
million in the prior year.
Segment Profi t and Loss
Revenue
Audio
Television
Corporate
Total Revenue
EBITDA
Audio
Television
Corporate
Total EBITDA
Group NPAT
2022
$’m
392.8
126.2
0.7
519.7
85.8
30.0
(30.2)
85.6
(153.7)
2021
$’m
358.4
169.6
0.6
528.6
115.0
38.1
(27.2)
125.9
48.1
Variance
9.6%
(25.6%)
16.7%
(1.7%)
(25.4%)
(21.3%)
(11.0%)
(32.0%)
(419.5%)
2022 Annual Report
Directors’ Report | 27
Directors’ Report
For the year ended 30 June 2022
Audio
The Audio business consists of two complementary radio brands
operating across Australian capital cities and regional Australia
along with the digital assets associated with these two brands.
These brands target diff erent audience demographics with the
Triple M network skewed towards males in the 25 to 54 age
bracket and the Hit Network targeted towards females in the
25 to 54 age bracket.
Digital audio revenues continue to grow with an increase of
35.2% year on year. SCA anticipates digital audio growth will
continue into FY23. The Group’s digital platform, LiSTNR, grew
signifi cantly in FY22, with strong adoption by users attracted to
the compelling product and increasing choice of content on the
product. Total listenership of SCA and partner digital audio content
measured across all digital platforms has now exceeded 5 million
listeners on a monthly basis, and the number of listeners who have
registered with LiSTNR has now exceeded 800,000 users.
The Group’s metro radio revenue increased by 9.4%, driven
primarily from the Sydney and Melbourne markets with growth of
13.3% and 9.7% respectively. The recovery in metro advertising
markets continued, particularly in the second half of FY22
once COVID-19 lockdowns in the key markets of Sydney and
Melbourne were ended. The recovery in audio markets was driven
by increased listening which saw commercial radio audiences
achieve record highs in the surveys reported in 2022 to date.
Regional radio achieved total growth of 6.4%. The Boomtown
initiative continues to infl uence National advertisers on the
benefi ts of regional reach with 8.9% growth across the Group’s
regional markets.
Whilst total audio revenues increased by 9.6%, EBITDA fell 25.4%
on prior year. This fall is a product of reduced government stimulus
and increased investment in growing SCA’s digital audio business.
Television
The Television business consists of a number of regional television
licences. Each regional television licence receives programming
from a metropolitan television network affi liate. During the fi nancial
year the Group received the majority of its programming from the
Ten Network, whilst Tasmania, Darwin and Central licence areas
received Seven Network programming. Total television revenues
decreased by 25.6%, largely due to the change in affi liation
partners from the Nine Network to Network Ten which occurred
on 1 July 2021. EBITDA fell 21.3% on prior year predominantly due
to lower government stimulus. Excluding government stimulus,
EBITDA decreased by 2.2%.
Corporate
The Corporate function comprises the group-wide centralised
functions that cannot be clearly attributable to the audio or
television CGUs. Corporate expenses increased by $3.2 million,
mainly due to increased consulting fees and the termination of a
cloud-based software implementation.
Financial position
Cash fl ow generation was consistent throughout the year with
a return to the payment of dividends and increased investing
activities back to pre-pandemic levels. The reduction of debt in
the prior year resulted in lower interest payments of $9.5 million.
The Group’s key leverage ratio increased to 0.95 times, up from
0.43 times in June 2021. This remains well within the maximum
covenant of 3.5x. Lower debt levels saw the Interest cover increase
to 23.45 times, up from 15.62 in June 2021. The minimum interest
cover covenant is 3.0 times.
The Group’s debt facilities were refi nanced in January 2022 with
a four-year extension in the $250 million facilities through to
January 2026, providing security of fi nancing into the medium term.
Strategic update
The Group’s mission is ‘To entertain, inform and inspire
Australians. Anytime. Anywhere.’ With a renewed focus on
being Australia’s leading Audio company, and a particular focus
on the growing Digital Audio sector, the Group will leverage its
localism and audio ecosystem to maximise total shareholder
returns for investors.
In FY21 the Group developed a new and refreshed Corporate
Strategy. This strategy provides an overall strategic pathway for
the Company over the next fi ve years which stipulates specifi c
objectives and targets whilst enabling the Group to remain agile.
In FY22 the Group refi ned its four specifi c objectives to:
1. Entertain, inform and inspire our audiences
2. Evolve LiSTNR into a Unique World Class Audio Platform
3. Optimise and simplify our sales off ering to grow revenue
4. Re-imagine and restructure SCA’s operating model
2023 Outlook
The Group’s focus will be on Audio, specifi cally on growing Digital
Audio. Digital Audio earnings will attract a premium valuation
multiple thereby positioning the Group as an emerging growth
option for shareholders. The Group also maintains a highly
competitive position in traditional radio (licences), which will provide
the base from which to drive Digital Audio. Continued evolution
of the Group’s Digital First operating model will be key, with a
multifaceted innovative workforce who are platform agnostic
(Radio and Digital) and underpinned by an effi cient and secure
technology infrastructure.
SCA has completed a strategic review of SCA’s television assets
and concluded that value will be maximised by continuing to hold
the television assets. SCA received multiple bids for the asset but
concluded that greater value would be realised for shareholders by
retaining the asset and the earnings that it derives. The review was
supported by SCA’s fi nancial adviser, Grant Samuel.
Through sale of transmission towers and outsourcing of asset
intensive activities to specialist service providers since 2017, SCA
has created a streamlined and effi cient service that minimises the
cost of delivery of broadcast and television to SCA’s licence areas.
SCA operates a best-in-class television sales team that consistently
delivers market leading revenue-to-audience power ratios in
regional markets.
During FY22 the Group extended its program supply agreement
with Seven West Media covering the Tasmania, Darwin, Central and
Spencer Gulf markets to 30 June 2024. The Group also broadcasts
Nine and Network 10 programming in Spencer Gulf. The Group’s
current television affi liation agreement with Network 10 runs to
30 June 2023. While the regional television industry is in structural
decline, SCA will continue to seek effi ciencies to maximise cash
fl ow from the asset into the future. The contribution from television
will continue to support returns to SCA’s shareholders.
On 24 March 2022, the Group announced its intention to conduct
an on-market share buy-back of up to $40 million. For the period
to 30 June 2022, the Group purchased $5.5 million in shares. This
was funded from existing cash reserves. The on-market share buy-
back will continue into FY23 and will be funded by existing cash
reserves and debt facilities.
28 | Directors’ Report
Southern Cross Austereo
Material Risks
Business and operational risks that could aff ect the achievement of the Group’s fi nancial prospects include the following risks:
Risk
Mitigation Strategies
Economic shape of recovery
reduces shareholder returns
into the long term
In March 2020, COVID-19 severely impacted economic activity, with declines in certain sectors and with
signifi cant impacts on the Australian economy, increasing unemployment and economic contraction due to
the pandemic. Although the advertising market has not fully recovered to pre-pandemic levels, building on
the strong recovery in FY2021, this year has seen further growth in audio and television, despite the impact
of signifi cant lockdowns due to COVID variants. Subsequent to the end of the lockdowns, radio audiences
have grown signifi cantly as listening patterns have been re-established.
Some advertising categories remain aff ected by the outcomes of the pandemic and will take longer
to recover, especially as economic conditions may deteriorate, with infl ation and interest rates rising.
However, as described below, SCA is transitioning into a digital audio fi rst business, a high growth market,
and investing in systems and capability to create a higher level of operating eff ectiveness into the future,
to mitigate this risk.
New products emerge that
are more compelling than
Linear Radio
SCA has core expertise in the development of market leading content and constantly reviews the evolving
distribution landscape to understand how it can continue to serve market leading content through new and
innovative products.
Consumption of digital audio continues to grow strongly, with 71% of Australians 12+ listening to online audio
each week, up from 66% in 2021, with average time spent listening increasing from 12 hours 11 minutes per
week up to 13 hours 31 minutes1. This is expanding the range of audio content and diversifying the ways in
which audio can be consumed.
On 18 February 2021 SCA launched LiSTNR, a curated and personalised free app off ering radio, podcasts,
music and news, creating a new audio destination for all Australians.
LiSTNR is an important part of SCA’s digital transformation, building on the success of PodcastOne Australia,
which was launched in 2017. LiSTNR features all of SCA’s existing digital content plus a huge range of new
and compelling premium content, all located in one free and easy to use app. Since launch, over 800,000
users have signed up to LiSTNR, resulting in signifi cant audio consumption through the product and
generating fi rst-party data from our signed-in audience that gives SCA enhanced ability to off er our clients
targeted, engaged audiences at scale. This targeted advertising is enabled by an Instream advertising
product, which also delivers it across the digital inventory of SCA’s partners such as SoundCloud.
SCA believes that with continued investment it will be able to off er its listeners compelling content across
the medium of their choice – being broadcast radio or digital audio. Further resources will be deployed
towards the ongoing development of LiSTNR to ensure that SCA’s digital audio off ering is a market leader
in terms of content depth and quality, product capability and digital sales expertise.
Global technology platforms
alter the distribution
landscape that leads
to a loss of revenue
With new alternative digital platforms and technologies emerging, there is a risk that the Group loses market
share to alternative digital platforms and technologies or fails to fully exploit the opportunity digital media
represents for the business to lock in and grow new audience loyalty, or that it suff ers fi nancial loss due to
a transfer of advertising spend to digital media.
As described above, SCA has launched LiSTNR and continues to develop the product so that it directly
attracts listeners and establishes itself as a destination for audio listening, providing a signifi cant signed-in
user base that enables SCA to compete eff ectively in providing digital advertising solutions.
The Group’s team of digital experts are integrated into the Group’s day to day operations in order to
leverage existing content and sales capabilities.
The Group invests in engaging digital audiences through the simulcast of its FM radio stations online and
the creation of additional stations on DAB that extends its brands across broadcast and online platforms.
This is coupled with a large range of digital only content that ensures the LiSTNR product has a deep
content off ering for users. SCA utilises its own media assets as well as paid media to drive awareness
and adoption of LiSTNR to build a strong market position.
SCA has launched LiSTNR and continues to develop the product so that it directly attracts listeners and
establishes itself as a destination for audio listening.
SCA aims to grow market share quickly with LiSTNR, so that it builds a strong and loyal audience that can
compete with both domestic and international competitors. LiSTNR’s podcasting and streaming monthly
audience each grew by more than 200% in the year to March 20222.
SCA has a core expertise in content creation and is focused on providing localised content as a key
diff erentiator to international operators to ensure it receives strong engagement and listening from its
customer base.
Global technology
companies enter the Audio
space as content aggregators
and service providers
to consumers
1 The Infi nite Dial Australia 2022 study.
2 Triton Podcasting and Streaming Metrics (February 2021 – March 2022).
2022 Annual Report
Directors’ Report | 29
Non-Audit Services
The Company may decide to employ the auditor on assignments
additional to their statutory audit duties where the auditor’s
expertise and experience with the Group are important.
Details of the amounts paid or payable to the auditor
(PricewaterhouseCoopers Australia) for audit and non-audit
services provided during the year are set out in note 23.
The Board has considered the position and, in accordance with
advice received from the Audit & Risk Committee, is satisfi ed that
the provision of the non-audit services is compatible with the
general standard of independence for auditors imposed by the
Corporations Act 2001. The Directors are satisfi ed that the provision
of non-audit services by the auditor did not compromise the auditor
independence requirements of the Corporations Act 2001 for the
following reasons:
– all non-audit services have been reviewed by the Audit & Risk
Committee to ensure they do not impact the impartiality and
objectivity of the auditor; and
– none of the services undermine the general principles relating
to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants.
Environmental Regulation
The operations of the Group are not subject to any signifi cant
environmental regulations under Australian Commonwealth, State
or Territory law. The Directors are not aware of any breaches of any
environmental regulations.
Directors’ Report
For the year ended 30 June 2022
Distributions and Dividends
Type
Cents per
share
Total
Amount
$’m
Date of
Payment
Final 2021 Ordinary
5.0 cents
Interim 2022 Ordinary 4.5 cents
$13.2 million 1 October 2021
7 April 2022
$11.9 million
Since the end of the fi nancial year the Directors have declared
the payment of a fi nal 2022 ordinary dividend of $12.35 million
(4.75 cents per fully paid share) out of ‘Retained Profi ts – 2019
reserve’. This dividend will be paid on 4 October 2022.
Signifi cant Changes in State of Aff airs
In the opinion of the Directors, there were no signifi cant changes
in the state of aff airs of the Group that occurred during the
year under review.
Events Occurring After Balance Date
Events occurring after balance date are outlined in note 26 ‘Events
Occurring after Balance Date’ to the Financial Statements.
Likely Developments and Expected
Results of Operations
Further information on likely developments relating to the
operations of the Group in future years and the expected results
of those operations have not been included in this report because
the Directors of the Company believe it would be likely to result in
unreasonable prejudice to the commercial interests of the Group.
Indemnifi cation and Insurance
of Offi cers and Auditors
During the year the Company paid a premium of $3,030,094 to
insure its offi cers. So long as the offi cers of the Company act in
accordance with the Constitution and the law, the offi cers remain
indemnifi ed out of the assets of the Company and the Group
against any losses incurred while acting on behalf of the Company
and the Group. The auditors of the Group are in no way indemnifi ed
out of the assets of the Group.
30 | Directors’ Report
Southern Cross Austereo
Information on Directors
Chairman
Appointed: 1 September 2014
Robert Murray
Most recently elected by shareholders: 30 October 2020
Board Committees: Nomination Committee (Chair)
Rob Murray became Chair of the Company on 19 August 2020.
Rob had a successful career in sales, marketing and general management having served most recently as the
CEO of Lion (formerly Lion Nathan), one of Australasia’s leading food and beverage companies, including during
its acquisition by Kirin Holdings in 2009. Before joining Lion Nathan in 2004, Rob worked for Procter & Gamble
for 12 years, and then for eight years with Nestlé, fi rst as MD of the UK Food business, and then as CEO of
Nestlé Oceania.
Rob brings valuable strategic and commercial insight to the Board, along with his in-depth understanding of
consumer behaviour and global experience in mergers and acquisitions and other corporate transactions. Rob
is a director of Metcash and of the Bestest Foundation, and Advisory Chair of the Hawkes Brewing Company.
He was previously a director of Dick Smith Holdings, Super Retail Group and Linfox Logistics.
Director
Appointed: 1 September 2014
Glen Boreham
Most recently elected by shareholders: 13 October 2021
Board Committees: Digital Transformation Committee, People & Culture Committee, Nomination Committee
Glen’s executive career culminated in the role of CEO and Managing Director of IBM Australia and New Zealand
in a period of rapid change and innovation from 2006 to 2010. He was the inaugural Chair of Screen Australia
from 2008 to 2014 and chaired the Australian Government’s Convergence Review of the media industry. The
Board benefi ts from Glen’s extensive knowledge, insights and networks in the technology and data industries.
Having lived in Asia, Europe and Australia, Glen brings a global perspective.
Glen is also a director of Cochlear and Link Group and was formerly Chair of the Advisory Board at IXUP
where he remains a Strategic Adviser. He was previously Chair of the Industry Advisory Board at the
University of Technology Sydney, Chair of Advance, representing the one million Australians living overseas,
as well as Deputy Chair of the Australian Information Industry Association and a Director of the Australian
Chamber Orchestra. In 2010, he became a founding member of Australia’s Male Champions of Change group.
Glen is a Member of the Order of Australia for services to business and the arts.
Director
Appointed: 1 September 2020
Carole Campbell
Most recently elected by shareholders: 30 October 2020
Board Committees: Audit & Risk Committee (Chair)
Carole Campbell has over 30 years’ fi nancial executive experience in a diverse range of industries including
professional services, fi nancial services, media, mining and industrial services. Carole started her career with
KPMG and has held executive roles with Macquarie Group, Westpac Institutional Bank, Seven West Media, Bis
Industries and Merivale.
Carole transitioned to a non-executive career in 2018 and is a non-executive director of GUD Holdings Limited
where she chairs the audit committee. She was previously a non-executive director of IVE Group Ltd and
Humm Group Ltd. Carole is also Deputy Chair of Council of the Australian Film Television and Radio School.
Carole is a Fellow of Chartered Accountants Australia and New Zealand and brings extensive experience
in accounting, treasury, fi nance and risk management to her role on the Board and as Chair of the Audit &
Risk Committee.
Director
Ido Leffl er
Appointed: 30 October 2020
Most recently elected by shareholders: 30 October 2020
Board Committees: Digital Transformation Committee, People & Culture Committee
Ido Leffl er has long and successful experience in developing digital brands and extensive networks in the start-
up communities of Silicon Valley and Australasia. Ido is the co-founder and Chief Executive Offi cer at Yoobi, a
school supplies company that engages kids through bright colours, cool designs and, most importantly, cause.
He is also a co-founder of Yes To Inc. – a leading global natural beauty brand; and of Beach House Group – a
global consumer product house.
Ido is a non-executive director of Vestergaard and The Lux Group. He was a non-executive director of Spark
New Zealand Limited for six years until November 2020. Ido also sits on other corporate and advisory boards,
including as an emeritus member of the United Nations Foundation Global Entrepreneur Council.
2022 Annual Report
Directors’ Report | 31
Directors’ Report
For the year ended 30 June 2022
Director
Appointed: 30 October 2020
Heith Mackay-Cruise
Most recently elected by shareholders: 30 October 2020
Board Committees: Audit & Risk Committee, Digital Transformation Committee
Heith Mackay-Cruise’s executive career included senior roles in Marketing for Pepsi-Cola in Australia and
Australian Consolidated Press and as CEO and Managing Director of PBL Media in New Zealand, Study Group
and Sterling Early Education.
Since 2014, Heith has focused on non-executive roles including four years on the board of the ASX-listed
Bailador Technology Investments Limited, and privately owned groups including Literacy Planet, hipages
Group, LifeHealthcare, and his ongoing role as Chair of UP Education Limited.
Heith brings to the Board his executive leadership experience, as well as global platforms exposure, and
marketing and digital knowledge.
Director
Helen Nash
Appointed: 23 April 2015
Most recently elected by shareholders: 30 October 2020
Board Committees: Audit & Risk Committee, People & Culture Committee (Chair), Nomination Committee
Helen Nash has more than 20 years’ experience in consumer packaged goods, media and quick service
restaurants. As Chief Operating Offi cer at McDonald’s Australia, she oversaw restaurant operations,
marketing, menu, insights and research and information technology. This mix of strategic and operational
experience allows Helen to bring broad commercial skills and acumen, as well as a consumer focus, to the
Board. Helen also brings robust fi nancial skills to her role having initially trained in the UK as a Certifi ed
Management Accountant.
Since transitioning to her non-executive career in 2013, Helen has served as a director of companies in a range
of industries. She is a director of Metcash Ltd and Inghams Group Limited, and was formerly a director of Pacifi c
Brands Ltd and Blackmores Ltd. Our Board benefi ts from Helen’s governance experience and skills, including
her membership of audit and remuneration committees at these other companies.
Director
Appointed: 26 May 2016
Melanie Willis
Most recently elected by shareholders: 13 October 2020
Board Committees: Audit & Risk Committee, People & Culture Committee
Melanie has extensive experience in corporate fi nance, strategy and innovation and investments both in
executive and non-executive roles. She has worked in sectors including accounting and fi nance, infrastructure,
property investment management and retail services (including tourism and start-up ventures). She held
executive roles as CEO of NRMA Investments (and head of strategy and innovation), CEO of a fi nancial
services start-up and director of Deutsche Bank, having previously been in corporate fi nance at Bankers
Trust and Westpac.
Melanie chaired the Audit & Risk Committee until 30 September 2021 and continues as a member of that
Committee which benefi ts from her extensive skills and experience in fi nancial reporting and risk management
matters. In addition to her broad fi nance, strategic and commercial skills, Melanie brings valuable governance
experience from her roles as a director of Challenger, PEXA Group, Paypal Australia and QBE Insurance
(AusPac), and from her former positions as a director of Mantra, Pepper Group, Ardent Leisure and Chief
Executive Women. Melanie previously chaired the audit and risk committee at Mantra and was a member of
the audit committee at Pepper Group. She currently chairs the risk committee and is a member of the audit
committee at Challenger, chairs the audit and risk committee and is a member of the remuneration, nomination
and people committee at PEXA Group, and chairs the audit committee and people and culture committee at
Paypal Australia.
Director
Appointed: 29 June 2015
Grant Blackley
Most recently elected by shareholders: 29 October 2015
Grant Blackley has enjoyed a distinguished career with more than 30 years’ experience in the media and
entertainment sectors. Grant joined the Board in June 2015 as Chief Executive Offi cer and Managing Director
and is responsible for leading the strategic and operational performance of the Company. Grant is the Chairman
of Commercial Radio Australia and a director of the Australian Association of National Advertisers. He has in the
past served as a director of Free TV Australia. He has served in numerous senior leadership roles including at
Network 10, as CEO from 2005 to 2010. Before becoming CEO at Network 10, Grant held key roles in network
sales, digital media and multi-channel program development as well as being responsible for group strategy,
acquisitions and executive leadership and development.
32 | Directors’ Report
Southern Cross Austereo
Information on Company Secretary
General Counsel and
Company Secretary
Tony Hudson
Appointed: 7 September 2015
Tony Hudson has over 25 years’ experience in senior legal and governance roles. Tony was General Counsel
and Company Secretary at ConnectEast from 2005 until 2015. Before that, Tony was a partner of Blake Dawson
Waldron (now Ashurst Australia), working in the fi rm’s Melbourne offi ce and from 1993 until 2000 in its Jakarta
associated offi ce. Tony manages the Group’s national legal and corporate aff airs teams, including responsibility
for regulatory aff airs and board governance.
Meetings of Directors
The number of meetings of the Board of Directors and its committees held during the year and the number of meetings attended by each
director are summarised in the table below.
The Nomination Committee did not meet during the year. As a result, the members of the Nomination Committee (Rob Murray,
Glen Boreham, and Helen Nash did not receive any fees in respect of their membership of the Nomination Committee during the year.
Director
Rob Murray
Grant Blackley
Glen Boreham
Carole Campbell
Ido Leffl er
Heith Mackay-Cruise
Helen Nash
Melanie Willis
Board
Audit & Risk
People & Culture
Digital Transformation
Attended
Held 1 Attended
Held 1 Attended
Held 1 Attended
Held 1
Meetings of Committees
13
14
13
14
14
14
14
14
14
14
14
14
14
14
14
14
4
4
1
4
–
4
4
4
*
*
*
4
*
4
4
4
5
5
6
3
5
5
6
6
*
*
6
*
6
*
6
6
5
5
5
2
5
5
–
–
*
*
5
*
5
5
*
*
1 Held refers to the number of meetings held during the time the director held offi ce or was a member of the relevant committee during the year.
* Not a member of the relevant committee during the year.
2022 Annual Report
Directors’ Report | 33
Directors’ Report
For the year ended 30 June 2022
Remuneration Report
Letter from People & Culture Committee
Overview
On behalf of the Board, I am pleased to present SCA’s
remuneration report for the year ended 30 June 2022 (FY22).
The People & Culture Committee (PCC) assists the Board
in its oversight of management activities in developing and
implementing strategies to improve SCA’s fi nancial performance,
culture and diversity, consistent with our values. An important part
of the committee’s role is to ensure SCA’s remuneration policies
align executive reward with creation of value for shareholders,
having regard to applicable governance, legal and regulatory
requirements and industry standards.
Executive remuneration includes fi xed and variable components.
As foreshadowed in last year’s remuneration report, the Board
replaced the previous short-term incentive (STI) and long-term
incentive (LTI) plans with a combined Executive Incentive Plan
(EIP) for FY22 and future years. The Board made these changes
after consulting with SCA’s major shareholders and considering
independent advice from KPMG on market practices and investor
expectations. The new EIP provides a simpler and more direct
way to link executive performance and reward to generation of
sustainable positive returns for shareholders.
Classifi cation of executive KMP
For some years, the Board has classifi ed the senior leadership
team, comprising the CEO and the CEO’s direct executive reports,
as key management personnel (KMP) for fi nancial reporting
purposes. This was because the senior leadership team jointly
planned, directed and controlled the activities of the Group,
despite their operational roles only covering discrete areas
of the Group’s operations.
Following changes in the responsibilities of the CEO’s direct
executive reports during FY22, the Board has classifi ed only
four executives as KMP: the Chief Executive Offi cer (CEO), the
Chief Financial Offi cer (CFO), the Chief Operating Offi cer (COO)
and the Chief Sales Offi cer (CSO). From 1 July 2021, the Board has
assessed that these four executives have overarching responsibility
for formation of corporate strategy, budgets and other decisions
regarding allocation of resources. The Board’s assessment
was informed by, among other factors, the CEO’s and CFO’s
participation in all meetings of the Board and its committees, the
COO’s central role in developing corporate strategy and facilitating
the Board’s consideration and approval of corporate strategy, and
the CSO’s responsibility for revenue strategy across SCA’s audio
and television operations around Australia. From July 2021 the
responsibilities and infl uence of other members of the leadership
team are limited to their respective functional departments.
Senior Leadership Team
The PCC oversees the composition, performance and remuneration
not just of SCA’s executive KMP but of all members of the Senior
Leadership Team. During the year, the PCC was delighted
to support the elevation of Rebecca Ackland to this team as
Chief People and Culture Offi cer. With Rebecca’s elevation,
SCA achieved its previous 2024 target for 25% women in executive
leadership. Rebecca also brings a younger perspective to the
leadership team and is a role model for other aspiring women
at or considering joining SCA.
Executive Incentive Plan
Under the new EIP, the performance of the executive KMP is
assessed annually against a mix of fi nancial and non-fi nancial
performance measures. The EIP uses a balanced scorecard to
assess the performance of executive KMP. Sixty percent of the
annual award is based on performance against annual fi nancial
performance hurdles. Non-fi nancial measures – accounting for
40% of the annual award – include execution of strategic projects
designed to drive future fi nancial performance, and cultural and
behavioural infl uences. This balanced scorecard recognises the
long-term benefi ts to the organisation of SCA’s leaders committing
to develop and maintain a strong culture and operational
discipline. In all cases, executives’ maximum EIP opportunity
is capped at target.
The Board also maintains a corporate balanced scorecard to assess
overall performance against agreed targets for radio audience
survey performance, advertising market commercial share, growth
in digital audio reach and monthly active users of LiSTNR, as well as
fi nancial performance measures. Several of the measures from the
corporate scorecard are refl ected in the scorecards of individual
executives and the Board also uses the scorecard to inform its
exercise of discretion when considering the performance and
incentive opportunities of individual executives.
The annual EIP award to each executive KMP is settled partly in
cash and the remainder in equity performance rights. The cash
component is 40% for the CEO and 50% for other executive KMP.
These performance rights are eligible for vesting and conversion
to ordinary shares at the end of year 3, subject to ongoing
employment. Vesting of one-half of the performance rights will
potentially be scaled back according to SCA achieving satisfactory
growth in earnings per share over the three years of the EIP.
A further restriction on disposal of vested shares will apply until
the end of year 5, two years after allocation of any vested shares.
While the former LTI plan has been suspended, entitlements
granted to executives in FY21 remain on foot. Shareholders will
recall this bespoke LTI plan is focused on increasing SCA’s market
capitalisation and resuming a reliable fl ow of dividends over the
three-year performance period to 30 June 2023. Vested awards
under the FY21 LTI plan will be settled in equity. Details of this
bespoke LTI plan, under which total shareholder return is the
sole performance measure, are outlined in section 2.3.2 of the
remuneration report.
Target shareholdings for executive KMP
and non-executive directors
Incentive awards under the EIP or the former LTI plan that are
settled in equity are subject to restrictions on disposal until the
applicable executive KMP has accumulated the target shareholding
required by the Senior Executive Share Ownership Policy.
The Board adjusted this policy during the year. The policy had
previously required the CEO to accumulate a shareholding with
a value equivalent to 100% of the CEO’s fi xed remuneration and
other executive KMP to accumulate a shareholding with a value
equivalent to 50% of their fi xed remuneration. The revised policy
requires executive KMP to invest an amount not less than 50%
of the executive’s base salary in acquiring SCA shares. The CEO
must invest an amount not less than 100% of the CEO’s base salary
in acquiring SCA shares. The market price at the time of allocation
to an executive of shares under one of SCA’s executive incentive
plans is included in the executive’s invested amount. The proceeds
of any sales of shares will be deducted from an executive’s invested
amount. There is no due date by which an executive must acquire
the target shareholding.
34 | Directors’ Report
Southern Cross Austereo
Executive remuneration planning for FY23
In accordance with the Board’s three-year schedule, the Board
engaged KPMG to benchmark SCA’s remuneration of the
senior leadership team during April 2022. At the time of the
benchmarking, SCA’s market capitalisation ranked 282 in the
ASX 300. A comparator group comprising 38 companies from
the ASX 150-300 Consumer Staples, Consumer Discretionary
and Communication Services sector and certain other media peers
was selected for the benchmarking. KPMG found that the fi xed
remuneration of SCA’s executive KMP in FY22 ranked between
the 69th and 78th percentile of the comparator group and their
total remuneration ranked between the 55th and 74th percentile.
Board remuneration
There were no changes to the remuneration of non-executive
directors in FY22. The same remuneration framework for non-
executive directors will continue in FY23.
In accordance with the Board’s three-year schedule, the Board
engaged KPMG to benchmark SCA’s remuneration of non-
executive directors during April 2022. Using the comparator
group described above, KPMG found that the remuneration
of SCA’s non-executive directors in FY22 is in the top quartile
of the comparator group. Melanie Willis will retire as a director on
31 August 2022. Considering changes in SCA’s business over the
past year, the Board has decided not to seek a replacement for
Melanie. The Board considers its reduced size and its mix of skills
and experience will be appropriate for SCA’s needs. However,
as a result of Melanie’s retirement, the Board will review its
Committees to ensure they are structured optimally for SCA’s
business requirements.
Further details of current Board remuneration arrangements are
provided in the remuneration report.
The PCC continues to strive to ensure SCA’s remuneration
framework will drive behaviours to generate sustainable value for
shareholders. Introduction in FY22 of the new EIP has that explicit
objective. I look forward to your feedback and to welcoming you
to our 2022 Annual General Meeting.
Yours faithfully,
Helen Nash
Chair of the People & Culture Committee
The Board considers the revised policy operates more fairly to
executive KMP who have invested substantially in acquiring SCA
shares and who have, along with other shareholders, experienced
a signifi cant loss in the value of their shareholdings since the
COVID-19 pandemic began to aff ect SCA in March 2020. Details
of executive KMP shareholdings are set out in section 8.1 of the
remuneration report.
The Board adopted corresponding changes to the non-executive
directors Shareholding Policy during the year. Details of non-
executive directors’ shareholdings are set out in section 8.1
of the remuneration report.
Executive remuneration in FY22
The Board approved increases of between 2.6% and 4.5% in
the base remuneration of the CEO and other executive KMP for
FY22. The remuneration of these executive KMP had not been
adjusted since FY19. The Board considered these adjustments
were reasonable to ensure SCA’s executive remuneration
remained competitive in a tightening labour market.
Under the FY22 EIP, the performance of each executive KMP was
assessed against a mix of fi nancial and non-fi nancial performance
measures. The profi tability and fi nancial performance measures
under the EIP for FY22 were Group EBITDA, earnings per share,
digital revenue growth, and non-revenue-related costs compared
to budget. The fi rst three revenue-related targets were not
achieved. The PCC and Board accepted this underperformance
against budget was in large part due to COVID-related lockdowns
across New South Wales and Victoria in 1H FY22 as well as
broader macroeconomic and geopolitical factors that were not
foreseeable at the time the budget was set and which were beyond
the control of the executive team. In contrast, the non-revenue-
related costs target was fully achieved, refl ecting the proactivity
of the executive team in controlling costs during the year. Despite
this, on the recommendation of the CEO, the Board exercised its
discretion downward to award only 25% of the available reward for
achievement of this target. This resulted in a small award (3% out
of a possible 60%) for all executive KMP under the profi tability and
fi nancial performance component of the EIP.
The Board considered that good progress was made during the
year on strategic initiatives designed to embed a digital audio
operating model and grow the user base and commercial potential
of LiSTNR. These outcomes were driven by targeted investments
in original and partner content, technology, marketing, as well as
recruitment, training and development of our people. Cultural and
behavioural goals were also substantially achieved during the year,
although the Board made some adjustments to recognise that
steps were not taken quickly enough in a small number of cases
to address poor behaviour and its impacts on others.
As a result of these assessments, executive KMP received
between 38% and 41% of their respective EIP opportunities.
Half of their awards (and 60% of the CEO’s award) will be settled
by grant of performance rights that will be eligible for vesting after
30 June 2024, strongly aligning executives’ interests with those
of other shareholders.
Details of the EIP outcome for each executive KMP are provided
in the remuneration report.
As noted above, no LTI entitlements were eligible for
vesting in FY22.
2022 Annual Report
Directors’ Report | 35
Directors’ Report
For the year ended 30 June 2022
1. Overview of FY22 remuneration
This section provides an overview of the remuneration received by executive KMP and non-executive directors in FY22.
1.1 Executive KMP
The principles for remuneration of executive KMP are set out in section 2. Details of remuneration paid during the year are provided
in sections 3 (Remuneration of executive KMP and directors), 4 (Analysis of incentives) and 5 (Share-based incentives).
This table provides an overview of statutory remuneration received by executive KMP in FY21 and FY22.
Name
Grant Blackley
Chief Executive Offi cer
and Managing Director
Nick McKechnie
Chief Financial Offi cer
John Kelly
Chief Operating Offi cer
Brian Gallagher
Chief Sales Offi cer
Stephen Haddad
Chief Technology Offi cer
Dave Cameron
Chief Content Offi cer
Nikki Clarkson
Chief Marketing Offi cer
Total executive KMP
Total remuneration
Performance-
related
proportion
%
Amount
$
1,692,408
26.5%
1,692,269
768,705
794,301
787,462
800,090
766,238
771,929
–
529,294
–
555,572
–
414,089
4,014,813
5,557,544
29.1%
20.6%
27.3%
22.0%
27.6%
21.7%
27.1%
–
23.6%
–
19.2%
–
23.0%
23.6%
26.4%
Year
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Short-term incentive
opportunity1
Long-term incentive
eligible for vesting2,3
Awarded
%
Forfeited
%
Vested
%
Forfeited
%
39.0
50.0
38.0
59.0
41.0
59.0
40.0
57.0
–
60.0
–
55.0
–
55.0
39.0
55.0
61.0
50.0
62.0
41.0
59.0
41.0
60.0
43.0
–
40.0
–
45.0
–
45.0
61.0
45.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 The short-term incentive opportunity awarded or vested during FY22 is the cash component of awards made under the Executive Incentive Plan.
2 No LTI entitlements were eligible for vesting in FY22. Entitlements granted under the FY20 LTI plan that would have been eligible for vesting in FY22 were
cancelled during 2020 because of the impact on SCA’s business of the COVID-19 pandemic.
3 A portion of the awards made under the Executive Incentive Plan in FY22 will be satisfi ed by the grant of performance rights that will be eligible for vesting
after expiry of the three-year performance period on 30 June 2024.
4 The roles of the Chief Technology Offi cer (Stephen Haddad), Chief Content Offi cer (Dave Cameron) and Chief Marketing Offi cer (Nikki Clarkson) were assessed
as KMP in FY21. For reasons explained in the letter of the Chair of the Boards’s People & Culture Committee, the Board has assessed these roles were not KMP
roles during FY22.
1.2 Non-executive directors
The aggregate remuneration of the Company’s non-executive directors during FY22 was $1,280,600, compared to $1,235,072 in FY21.
Aggregate remuneration was lower in FY21 because non-executive directors took a voluntary 10% fee reduction between 1 May 2020
and 30 September 2020 due to the impact of COVID-19. The principles for remuneration of non-executive directors are set out in section 2.
Details of the remuneration of non-executive directors during the year are provided in section 3.
36 | Directors’ Report
Southern Cross Austereo
2. Remuneration principles
2.1 Overview of executive remuneration
The Company aims to ensure remuneration is competitive and appropriate for the results delivered. Executive reward is aligned with
the achievement of strategic objectives and the creation of value for shareholders and is informed by market practice for executive reward.
Executive remuneration packages include a mix of fi xed and variable remuneration. In FY21, variable remuneration included short- and
long-term incentives. In FY22, the former short-term incentive (STI) and long-term incentive (LTI) plans were replaced by a combined
Executive Incentive Plan (EIP). Entitlements granted to executive KMP (and other participants) under the FY21 LTI plan remain on foot and
will be eligible for vesting after the end of the three-year performance period on 30 June 2023. More senior roles in the organisation have
a greater weighting towards variable remuneration.
The table below shows the target remuneration mix for executive KMP in FY21 and FY22. The STI portion is shown at target levels
and the LTI portion is based on the value granted or to be granted in the relevant year.
Executive KMP3
Grant Blackley
John Kelly
Nick McKechnie
Brian Gallagher
Stephen Haddad
Dave Cameron
Nikki Clarkson
Fixed remuneration
EIP/STI
EIP/LTI
Target remuneration mix
FY22
40%
50%
50%
50%
–
–
–
FY21
40%
50%
50%
50%
50%
50%
50%
EIP1
FY22
30%
25%
25%
25%
–
–
–
STI
FY21
30%
30%
30%
30%
30%
30%
30%
EIP2
FY22
30%
25%
25%
25%
–
–
–
LTI
FY21
30%
20%
20%
20%
20%
20%
20%
1 The EIP is a combined incentive plan under which awards are paid partly in cash and partly in equity performance rights that are eligible for vesting at the end
of year 3. The percentages in this column are the cash component of the EIP awards in FY22.
2 The EIP is a combined incentive plan under which awards are paid partly in cash and partly in equity performance rights that are eligible for vesting at the end
of year 3. The percentages in this column are the equity performance rights component of the EIP awards in FY22.
3 The roles of the Chief Technology Offi cer (Stephen Haddad), Chief Content Offi cer (Dave Cameron) and Chief Marketing Offi cer (Nikki Clarkson) were assessed
as KMP in FY21. For the reasons explained in the letter of the Chair of the Board’s People & Culture Committee, the Board has assessed these roles were not
KMP roles during FY22.
2.2 Fixed remuneration for executive KMP
Fixed remuneration for executives is structured as a total employment package. Executives receive a combination of base pay,
superannuation and prescribed non-fi nancial benefi ts at the executive’s discretion. SCA contributes superannuation on behalf of
executives in accordance with the superannuation guarantee legislation.
Fixed remuneration is reviewed annually to ensure the executive’s pay is competitive and appropriate for the results delivered. There are
no guaranteed fi xed remuneration increases included in any executive KMP contracts. The Board approved increases of between 2.6%
and 4.5% in the base remuneration of the CEO and other executive KMP for FY22. The remuneration of these executive KMP had not
been adjusted since FY19. The Board considered these adjustments were reasonable to ensure SCA’s executive remuneration remained
competitive in a tightening labour market.
2022 Annual Report
Directors’ Report | 37
Directors’ Report
For the year ended 30 June 2022
2.3 Variable remuneration for executive KMP
2.3.1 Executive incentive plan
The table below outlines details of the Company’s executive incentive plan (EIP). The EIP operated for the fi rst time in FY22.
What is the incentive?
The EIP is an annual at-risk bonus designed to reward executives for meeting or exceeding fi nancial and
non-fi nancial objectives.
How is each executive’s
entitlement determined?
Each executive is allocated a dollar value target (which may be a fi xed percentage of the executive’s total
remuneration) representing the executive’s maximum EIP opportunity for the one-year performance period.
How is the
incentive delivered?
The EIP operates over fi ve years as follows:
– a one-year performance period commencing on 1 July in the fi rst year of the EIP, after which individual
and corporate performance is assessed and an EIP award may be made partly in cash and partly in grant
of performance rights;
– a two-year service period commencing on 1 July in the second year of the EIP, after which performance
rights will be eligible for vesting and conversion to fully paid ordinary shares; and
– a two-year retention period commencing on 1 July in the fourth year of the EIP, during which any shares
allocated at the end of the service period are subject to a disposal restriction.
To the extent the EIP performance conditions for an executive are satisfi ed during the performance period,
SCA will make an EIP award to the executive. SCA will satisfy the dollar value of the EIP award by:
– paying the executive the cash component of the EIP award; and
– granting the executive performance rights with a face value equal to the equity component of the EIP
award in two equal tranches.
The number of performance rights granted to the executive is calculated by dividing the dollar value of the
equity component of the EIP award by the face value of a performance right at the end of the applicable
performance period. The face value of a performance right is:
– the volume weighted average price of SCA’s shares for the fi ve trading days commencing seven days
after SCA’s results for the performance period are announced to the ASX; less
– the amount of any fi nal dividend per share declared as payable in respect of the performance period.
These performance rights will be eligible for vesting at the end of year 3, two years after their grant to the
executive. This two-year period is referred to as the service period.
What are the
performance measures
and hurdles?
The Board sets the annual goals for the CEO near the beginning of each fi nancial year. The goals are allocated
to three categories having regard to SCA’s business strategy: fi nancial performance (60%), strategic execution
(30%) and culture and behaviour (10%).
The CEO determines the annual goals for other Leadership Executives in the same three categories and having
regard to their areas of responsibility.
Financial performance (60%)
The fi nancial performance metrics that apply under the EIP in FY22 are summarised below.
– Group EBITDA compared to budget: This is a core measure of operational profi tability. This metric
is relevant for all Leadership Executives.
– Earnings per share (EPS) compared to budget: This uses net profi t after tax (NPAT) as the core profi tability
driver while also taking account of any capital management initiatives that increase or reduce the number of
shares on issue. This metric is relevant for all Leadership Executives.
– Revenue compared to budget: Targets may be set for total revenue or for specifi c categories of revenue,
such as digital audio revenue. This metric is relevant for several Leadership Executives including the
Chief Sales Offi cer.
– Non-revenue-related costs compared to budget: These controllable costs exclude costs such as agency
commissions and television affi liation fees that are variable with revenue. This metric is relevant for all
Leadership Executives.
Achievements against fi nancial metrics are based on SCA’s audited annual fi nancial report. The Board has
discretion to adjust targets and outcomes to ensure executive reward is appropriately linked to corporate
performance. For this purpose, the Board may consider matters including SCA’s overall corporate performance
and progress against strategic objectives; signifi cant non-cash items (for example impairment losses);
acquisitions, divestments and one-off events; and abnormal or non-recurring items.
Strategic execution (30%)
Goals for strategic execution are tailored to the individual responsibilities of each executive. These goals focus
on implementation of strategic initiatives, major projects, and material operational improvements designed to
deliver growth, improved and sustainable business performance, and shareholder value.
Culture and behaviour (10%)
Goals for culture and behaviour are tailored to the individual responsibilities of each executive. These goals
focus on maintaining a positive corporate culture, eff ective leadership and development, retaining talent,
and building eff ective external relationships to improve and sustain long-term business performance and
shareholder value.
38 | Directors’ Report
Southern Cross Austereo
Is there a gateway?
The following gateways and vesting schedules apply for EIP awards based on fi nancial metrics:
EBITDA – percentage of budget
Vesting percentage
Below 95%
95%
Above 95% to 102.5%
Above 102.5%
Nil
50%
Straight-line vesting between 50% and 100%
100%
EPS – percentage of budget
Vesting percentage
Below 90%
90%
Above 90% to 105%
Above 105%
Nil
50%
Straight-line vesting between 50% and 100%
100%
Revenue – percentage of budget
Vesting percentage
Below 97%
97%
Above 97% to 100%
Above 100%
Nil
50%
Straight-line vesting between 50% and 100%
100%
Digital revenue – percentage of budget
Vesting percentage
Below 85%
85%
Above 85% to 107.5%
Above 107.5%
Nil
50%
Straight-line vesting between 50% and 100%
100%
Non-revenue-related costs – percentage of budget Vesting percentage
Above budget
On budget or below
Nil
100%
There is no gateway for non-fi nancial measures.
Individual performance must be at a ‘meets expectations’ level before any EIP award will be made.
What is the maximum
amount payable?
The maximum award under the FY22 EIP is 100% of an executive’s EIP target opportunity if all vesting
conditions are fully satisfi ed over the one-year performance period.
How is performance
assessed?
The Board will calculate the fi nancial measures under the EIP at the end of the performance period. SCA may
engage an independent consultant to review or carry out these calculations. The Board has discretion to adjust
targets and outcomes to ensure executive reward is appropriately linked to corporate performance.
CEO: At the end of each fi nancial year, with the assistance of the Board’s People & Culture Committee, the
Board assesses the performance of the CEO against the applicable non-fi nancial measures and determines
the extent to which the CEO has achieved applicable targets. In doing so, the Board may consider the CEO’s
achievements in the context of SCA’s overall performance.
Other Leadership Executives: At the end of the fi nancial year the CEO assesses the performance of the other
Leadership Executives against the applicable non-fi nancial measures and determines the extent to which each
Leadership Executive has achieved applicable targets. In doing so, the CEO may consider each Leadership
Executive’s achievements in the context of SCA’s overall performance. The CEO provides these assessments
to the People & Culture Committee for review.
2022 Annual Report
Directors’ Report | 39
Directors’ Report
For the year ended 30 June 2022
Vesting of performance
rights after
service period
If the executive remains employed by SCA at the end of the service period:
– Tranche 1 of the executive’s EIP award will vest at that time; and.
– Tranche 2 of the executive’s EIP award will be eligible for vesting according to the following scale.
3-year EPS CAGR
% of Tranche 2 that vests
1.5% or below
Nil
Above 1.5% to 8.0%
Straight-line vesting between 0% and 100%
Above 8.0%
100%
SCA will allocate one fully paid ordinary share for each of the executive’s performance rights that vests at the
end of the service period. An executive will receive an additional allocation of fully paid ordinary shares with
a value equal to the dividends paid on vested rights over the service period. The Board has discretion to settle
vested awards in cash.
Any performance rights that do not vest at the end of the service period will lapse.
The Board has discretion to fulfi l SCA’s obligation to allocate shares on vesting by issuing new shares or
acquiring shares on-market. The Board has decided that any shares to be allocated on vesting of performance
rights under the FY22 EIP grant will be acquired on-market.
Shares allocated under the EIP to Leadership Executives will be subject to disposal restrictions for two years
(until the end of year 5) or cessation of the Leadership Executive’s employment, whichever is earlier. These
shares will be subject to further disposal restrictions under the Senior Executive Share Ownership Policy
unless the Leadership Executive has accumulated the target shareholding required under that policy.
Cessation
of employment
If an executive ceases employment with the Company during the fi ve-year term of the FY22 EIP grant, the
treatment of executive’s rights under the EIP will be determined by time and the circumstances of the cessation
of employment as explained below.
During performance period
Bad Leavers (who resign or are terminated for cause) during the year 1 performance period will not be eligible
for an award under the FY22 EIP.
For an executive who ceases employment for other reasons during the performance period, the Board has
discretion to make an award to the executive under the EIP on a pro-rata basis considering time and the
performance to date against the applicable performance measures, to hold the EIP award to be tested against
the applicable performance measures at the end of the original performance period , or to treat the EIP award
in any other manner it considers appropriate.
During service period
Bad Leavers (who resign or are terminated for cause) during the two-year service period will forfeit any
unvested performance rights, unless otherwise determined by the Board.
For executives who cease employment during the service period for other reasons, the Board has discretion to
vest any unvested performance rights on a pro-rata basis considering time and the performance to date against
the EPS performance hurdle, to hold all or a part of any unvested performance rights to be tested against the
EPS performance hurdle at the end of the original service period, or to treat the award in any other manner it
deems appropriate.
After service period
If an executive ceases employment with SCA after the service period, SCA will release the executive’s shares
from any remaining restrictions on disposal.
If a change of control event in relation to SCA occurs before assessment of performance under an EIP award
or before vesting of performance rights granted under an EIP award, the Board has discretion as to how to
treat the unassessed award or unvested performance rights, including to forfeit or make an award in whole
or in part and to determine performance rights will vest or lapse in whole or in part, or that performance rights
will continue subject to the same or diff erent conditions. In exercising its discretion, the Board may consider
the proportion of the performance period and the service period that has passed at the time of the change of
control, the performance to date of SCA and the executive against applicable performance conditions , and any
other matters the Board considers to be relevant.
The Board may reconsider the level of satisfaction of a performance hurdle and take steps to reduce the benefi t
of an EIP award to the extent its vesting was aff ected by fraud, dishonesty, breach of obligation or other action
likely to result in long-term detriment to SCA.
Change of control
Clawback
40 | Directors’ Report
Southern Cross Austereo
Other features
Treatment of dividends: There are no dividends payable to executives on unvested performance rights.
Once performance rights have vested to fully paid ordinary shares, the executive will be entitled to dividends
on these shares. In addition, upon vesting of an executive’s performance rights, the executive will receive an
additional allocation of fully paid ordinary shares with a value equal to the dividends paid on vested rights over
the service period.
Sourcing of shares: The Board has discretion to purchase shares on-market or to issue new shares in respect
of vested performance rights. The Board typically chooses to purchase shares on-market for this purpose and
will do so for any performance rights that vest under the FY22 EIP.
Retention of shares: Participants must retain any shares allocated to them upon vesting of performance rights
for two years or cessation of employment, whichever is earlier. SCA’s Senior Executive Share Ownership Policy
also applies to shares allocated to Leadership Executives on vesting of performance rights under the EIP.
2.3.2 Long-term incentive plan
The table below outlines details of the Company’s LTI plan in FY21. The LTI plan has been suspended for subsequent fi nancial years.
Entitlements granted under the FY21 LTI plan will be eligible for vesting after expiry of the three-year performance period on 30 June 2023.
What is the incentive?
How is each executive’s
entitlement determined?
The LTI plan provides executive KMP and about 20 other executives with grants of performance rights over
ordinary shares, for nil consideration. Performance rights granted under the LTI plan are subject to a three-year
performance period.
Each executive is allocated a dollar value (which may be a fi xed percentage of the executive’s total
remuneration) representing the executive’s maximum LTI opportunity for the year. This dollar value is converted
into a number of performance rights in the LTI plan, based on the face value of performance rights at the
applicable grant date. The face value of performance rights is calculated as:
– the weighted average price of the Company’s shares for the fi ve trading days commencing seven days
after the Company’s results for the prior fi nancial year are announced to ASX; less
– the amount of any fi nal dividend per share declared as payable in respect of the prior fi nancial year.
The face value of each performance right for the FY21 grant was determined to be $0.1623. Following
implementation on 2 November 2020 of a one for 10 consolidation of the Company’s share capital,
the face value of each performance right for the FY21 grant has been adjusted to $1.6230.
Because of the severe impacts of the COVID-19 pandemic on the Australian economy and the fi nancial
performance and market capitalisation of SCA, the dollar value of each executive’s entitlement under the LTI
plan in FY21 was discounted by 76%, subject to each participant receiving a minimum grant of 6,161 performance
rights (which, after implementation on 2 November 2020 of the one for 10 consolidation of the Company’s share
capital, is the number of performance rights that has a total face value of $10,000).
How is the
incentive delivered?
To the extent the applicable vesting conditions are satisfi ed at the end of the applicable performance period,
LTI awards are delivered by allocation to participants of one fully paid ordinary share for each performance right
that vests. The Board has discretion to settle vested awards in cash.
Shares allocated under the LTI plan to executive KMP may be subject to restrictions on disposal under the
Senior Executive Share Ownership Policy until the executive has accumulated the minimum shareholding
required under that policy.
2022 Annual Report
Directors’ Report | 41
Directors’ Report
For the year ended 30 June 2022
What are the
performance measures
and hurdles?
In FY21, each grant under the LTI plan had a single performance hurdle over a three-year performance period:
Absolute Total Shareholder Return (TSR).
The absolute TSR performance hurdle considers share price appreciation plus reinvested dividends, expressed
as a percentage of investment and adjusted for changes in the Company’s capital structure. The share price
at the beginning and end of the performance period is the volume-weighted average price of the Company’s
shares on the ASX for the 10 trading days before and after the relevant date (and on the relevant date if
the relevant date is a trading day). The starting share price, based on the volume-weighted average price
on 30 June 2020, was $0.1819 per share. Following implementation on 2 November 2020 of the one for
10 consolidation of the Company’s share capital, the starting share price has been adjusted to $1.819 per share.
Dividends paid during the performance period will be assumed to have been re-invested on the ex-dividend
date. Tax and any franking credits (or equivalent) will be ignored.
The LTI plan for FY21 is designed to incentivise executives to increase the Company’s market capitalisation
following the substantial decline that occurred since a trading update released in October 2019 and onset
of the COVID-19 pandemic in early 2020. In broad terms, an absolute TSR of 100% over the three-year
performance period would restore the Company’s market capitalisation to the average level experienced
during the 2019 calendar year.
The LTI plan for FY21 considers the severe impact of COVID-19 on the Company’s operations and market
capitalisation and the ongoing uncertain economic environment. The Board wishes to provide a targeted
incentive to executives focused on increasing the market capitalisation of the Company over the three-year
performance period. The number of performance rights to be granted to executives was 24% of their standard
entitlement (Base Amount). (This is subject to each participant receiving a minimum grant of 6,161 performance
rights with a total face value of $10,000). Dependent on the TSR of the Company’s securities over the three-
year performance period, the maximum number of performance rights that could vest will be 2.5 times the
Base Amount or 60% of the executive’s standard entitlement under the LTI plan.
TSR performance rights granted in FY21 are eligible to vest according to the following schedule:
TSR performance to 30 June 2023
% of standard entitlement that vests
0% or below
Nil
Above 0% to 150%
Above 150%
Straight-line vesting between Base Amount (24% of standard
entitlement) and 2.5 x Base Amount (60% of standard entitlement)
2.5 x Base Amount (60% of standard entitlement)
The above schedule illustrates that each executive’s vesting opportunity commences at 24% of an executive’s
standard entitlement. The number of performance rights that vests will be subject to a multiplier according to
the TSR performance of the Company over the three-year performance period. For TSR performance of 100%,
a multiplier of 2x applies so that the number of performance rights that vests will be double the Base Amount
granted to the executive. The maximum multiplier is 2.5x for TSR performance of 150% over the three-year
performance period. In that case, the number of performance rights that vests will be 60% of an executive’s
standard entitlement.
Is there a gateway?
The Absolute TSR performance hurdle will be achieved only if the Company’s TSR performance over the
performance period is above zero.
What is the maximum
amount payable?
The maximum award under the FY21 LTI plan is 150% of an executive’s grant if all vesting conditions are fully
satisfi ed over the performance period. Because the grant under the FY21 LTI plan to each executive in FY21
will be at a discount of 76% to the executive’s standard entitlement, the maximum number of performance rights
to be awarded under the FY21 LTI plan is 60% of the executive’s standard entitlement.
How is performance
assessed?
The Board will calculate the Company’s TSR performance at the end of the performance period for each LTI
grant. The Company will engage an independent party to report on the Company’s TSR at the vesting date.
There is no subsequent testing of performance hurdles under the LTI plan.
Cessation of
employment
Bad Leavers (who resign or are terminated for cause) will forfeit any unvested performance rights, unless
otherwise determined by the Board.
Change of control
Clawback
For executives who cease employment for other reasons, the Board has discretion to vest any unvested
performance rights on a pro-rata basis considering time and the current level of performance against the
performance hurdle, or to hold the LTI award to be tested against performance hurdles at the end of the
original vesting period.
If a change of control occurs before vesting of an LTI award, the Board has discretion as to how to treat the
unvested award, including to determine that the award will vest or lapse in whole or in part, or that it will
continue subject to the same or diff erent conditions.
The Board may reconsider the level of satisfaction of a performance hurdle and take steps to reduce the benefi t
of an LTI award to the extent its vesting was aff ected by fraud, dishonesty, breach of obligation or other action
likely to result in long-term detriment to the Company.
42 | Directors’ Report
Southern Cross Austereo
Other features
Treatment of dividends: There are no dividends payable to participants on unvested performance rights.
Once performance rights have vested to fully paid ordinary shares, the participant will be entitled to dividends
on these shares.
Sourcing of shares: The Board has discretion to purchase shares on-market or to issue new shares in respect
of vested performance rights. The Board typically purchases shares on-market for this purpose and will do so
for any performance rights that vest under the FY21 LTI plan.
Retention of shares: The rules of the LTI plan do not require participants to retain any shares allocated to
them upon vesting of performance rights. However, the Company’s Senior Executive Share Ownership Policy
requires executive KMP to retain 25% of the shares allocated to them upon vesting of performance rights until
they achieve the required minimum shareholding under that policy or cease to be employed by the Company.
2.4 Consequences of performance on shareholder value
In considering the Group’s performance and the benefi ts for shareholder value, the Board has regard to the following indicators in the
current fi nancial year and the preceding four fi nancial years.
Revenue
EBITDA
EBITDA %
Net (loss)/profi t before tax
Net (loss)/profi t after tax (NPAT)
NPAT %
Net profi t after tax excluding signifi cant items
NPAT % excluding signifi cant items
EPS (cents)1
TSR
Opening share price2,4
Closing share price2,4
Dividend/Distribution5
30 June 2022
$’000
30 June 2021
$’000
30 June 2020
$’000
30 June 2019
$’000
30 June 2018
$’000
519,682
85,580
16.5%
(214,068)
(153,722)
(29.6%)
28,554
5.5%
10.77
(48.1%)
$2.09
$0.99
9.50c
528,649
125,936
23.8%
71,282
48,096
9.1%
48,096
9.1%
18.2
19.4%
$1.75
$2.093
0.00c
540,152
108,232
20.0%
38,294
25,100
4.6%
34,193
6.3%
17.69
(79.7%)
$8.60
$1.75
4.00c
660,088
147,382
22.3%
(129,475)
(91,395)
(13.8%)
73,879
11.2%
65.11
1.4%
$8.48
$8.60
7.75c
656,784
158,439
24.1%
2,519
82
0.0%
73,932
11.3%
65.16
12.4%
$7.54
$8.48
7.75c
1 EPS is shown after adjustments to exclude the impact of signifi cant or non-recurring items (both income and costs) as approved by the Board for the purposes
of the Company’s LTI plan and EIP.
2 On 4 May 2020, the Company completed a $169.6 million equity raising. The equity raising consisted of a pro-rata accelerated non-renounceable rights issue
and placement, resulting in the issue of 1,873,092,080 shares.
3 On 30 October 2020, the Company’s shareholders approved a one for 10 consolidation of the Company’s share capital. The consolidation was implemented
on 2 November 2020. As a result, the number of shares on issue reduced from 2,642,105,685 to 264,214,027.
4 Opening and closing share prices and dividends per share have been adjusted for the rights issue component of the equity raising referred to in note 2
and the consolidation of share capital referred to in note 3 (Source: Capital IQ).
5 Dividends paid during FY18, FY19, and FY20 represent amounts paid per share prior to the equity raising and prior to the share consolidation.
2.5 Executive service contracts
The Company has entered service contracts setting out the terms of employment of each executive KMP. All service contracts are for an
indefi nite term, subject to termination by either party on up to six months’ notice. Each executive service contract provides for the payment
of base salary and participation in the Company’s incentive plans, along with other prescribed non-monetary benefi ts.
2.6 Services from remuneration consultants
KPMG was engaged during the year to advise on benchmarking of the remuneration of SCA’s non-executive directors and SCA’s
executive KMP and other leadership executives. KPMG did not make any remuneration recommendations (as defi ned in the Corporations
Act). KPMG was paid $23,750 for these services.
Deloitte was engaged during the year to advise on valuation of outstanding entitlements granted under SCA’s EIP and LTI plan. Deloitte
did not make any remuneration recommendations (as defi ned in the Corporations Act). Deloitte was paid $1,500 for these services.
2.7 Remuneration of non-executive directors
The Company enters into a letter of appointment with each non-executive director. The letter sets out the Board’s expectations for
non-executive directors and the remuneration payable to non-executive directors.
The maximum annual aggregate fee pool for non-executive directors is $1,500,000. This was confi rmed in amendments to the Constitution
approved by shareholders at the 2020 AGM.
The Chair receives a fi xed aggregate fee. Other non-executive directors receive a base fee for acting as a director and additional fees for
participation as chair or as a member of the Board’s committees. Non-executive directors do not receive performance-based fees and are
not entitled to retirement benefi ts as part of their fees.
2022 Annual Report
Directors’ Report | 43
Directors’ Report
For the year ended 30 June 2022
The table below sets out the scale of fees for non-executive directors that applied in FY21 and FY22 and those that will apply in FY23.
The amounts shown for FY21 and FY22 do not take account of the temporary 10% reduction in fees between April 2020 and September
2020 in response to the impact of COVID-19.
Base fees – Annual
Chair1
Deputy Chair1
Other non-executive directors
Committee fees – Annual
Audit & Risk Committee – Chair
Audit & Risk Committee – member
People & Culture Committee – Chair1
People & Culture Committee – member
Digital Transformation Committee – Chair
Digital Transformation Committee – member
Nomination Committee – Chair1
Nomination Committee – member2
FY213
$
FY223
$
FY23
$
273,000
176,000
136,500
273,000
N/a
136,500
273,000
N/a
136,500
23,000
15,500
23,000
15,500
23,000
15,500
16,500
11,000
23,000
15,500
23,000
15,500
23,000
15,500
16,500
11,000
23,000
15,500
23,000
15,500
23,000
15,500
16,500
11,000
1. The Chair (and formerly the Deputy Chair) do not receive additional fees for committee work. Accordingly, the fees set out above for Chair of the Nomination
Committee have not been paid in any of the above years and will not be paid in FY23. The Board has not appointed a Deputy Chair since FY21.
2. Members of the Nomination Committee waived their fees in FY21 and FY22 because the Nomination Committee did not meet during that year. The same
waiver will apply if the Nomination Committee does not meet in FY23.
3. Because of the impact on the Company’s business of the COVID-19 health crisis and the lockdown measures implemented by Federal, State and Territory
governments in response to the crisis, the fees paid to non-executive directors for the period from 1 April 2020 to 30 September 2020 were reduced by 10%.
The above fees relate to the Board approved amounts prior to the 10% reduction.
3. Remuneration of executive KMP and directors during the year
3.1 Total remuneration received by executive KMP in FY22 (non-statutory disclosures)
The remuneration in the table below is aligned to the current performance period and provides an indication of alignment between the
remuneration received in the current year and its alignment with long-term performance. The amounts in this table will not reconcile with
those provided in the statutory disclosures in section 3.2. For example, the executive KMP table in section 3.2 discloses the value of
performance rights granted under the LTI plan and the EIP which might or might not vest in future years, while the table below discloses
the value of LTI grants from previous years which vested in the current year.
Non-
monetary
benefi ts
$
Super-
annuation
benefi ts
$
2,789
23,568
KMP executive2
Grant Blackley
Chief Executive Offi cer
and Managing Director
Nick McKechnie
Chief Financial Offi cer
John Kelly
Chief Operating Offi cer
Brian Gallagher
Chief Sales Offi cer
Stephen Haddad
Chief Technology Offi cer
Dave Cameron
Chief Content Offi cer
Nikki Clarkson
Chief Marketing Offi cer
Total executive KMP
Year
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Cash salary
and fees
$
1,203,709
1,148,563
561,207
531,016
576,512
542,730
561,632
527,202
–
371,226
–
423,453
–
277,702
EIP cash
bonus1
$
272,974
426,000
111,077
199,332
122,916
202,860
117,648
191,278
–
112,130
–
91,632
–
84,186
4,509
1,020
1,486
3,698
4,509
3,718
4,509
–
4,509
–
2,780
–
2,992
2,903,060
3,821,892
624,615
1,307,418
11,225
25,294
LTI vested
in the year
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$
1,503,040
1,600,766
696,872
753,528
726,694
771,793
706,566
744,683
–
509,559
–
539,559
–
386,574
3,633,172
5,306,462
21,694
23,568
21,694
23,568
21,694
23,568
21,694
–
21,694
–
21,694
–
21,694
94,272
151,858
1 The EIP cash bonus is for performance during the year using the criteria set out in section 2.3.1. The amount was fi nally determined by the Board on
19 August 2022 after considering recommendations of the People & Culture Committee.
2 The roles of the Chief Technology Offi cer (Stephen Haddad), Chief Content Offi cer (Dave Cameron), and Chief Marketing Offi cer (Nikki Clarkson) were assessed
as KMP in FY21. For the reasons explained in the letter of the Chair of the Board’s People & Culture Committee, the Board has assessed these roles were not
KMP roles during FY22.
44 | Directors’ Report
Southern Cross Austereo
3.2 Total remuneration received by Executive KMP in FY22 (statutory disclosure)
The table below sets out the nature and amount of each major element of the remuneration of each executive KMP in FY22 and FY21.
Short-term employee benefi ts
Year
Salary
and fees
$
EIP
cash
bonus2
$
Non-
monetary
$
Post-
e’ment
Super
contrib-
ution
$
Total
$
Long
Service
Leave1
Termin-
ation
benefi ts
$
$
Share-
based
pay-
ments
Perform-
ance
rights3
$
Perform-
ance-
related
proportion
Total
$
%
2022 1,203,709 272,974
2,789 1,479,472
23,568 14,690
– 174,678 1,692,408
26.5%
2021
1,148,563 426,000
4,509
1,579,072
21,694 24,309
2022
561,207
111,077
1,020
673,304
23,568 24,852
531,016 199,332
1,486
731,834
21,694 22,949
576,512 122,916
3,698
703,126
23,568 10,206
2021
2022
2021
2022
2021
2022
542,730 202,860
561,632 117,648
191,278
527,202
–
–
4,509
3,718
4,509
–
4,509
–
2,780
–
750,099
21,694
10,000
682,998
722,989
23,568
21,694
11,123
9,580
–
–
–
487,865
–
517,865
–
21,694
–
21,694
–
7,116
–
1,186
–
2021
371,226
112,130
2022
Dave Cameron
Chief Content Offi cer 2021
–
423,453
–
91,632
2022
–
–
Executive KMP4
Grant Blackley
CEO and
Managing Director
Nick McKechnie
Chief
Financial Offi cer
John Kelly
Chief
Operating Offi cer
Brian Gallagher
Chief Sales Offi cer
Stephen Haddad
Chief
Technology Offi cer
Nikki Clarkson
Chief Marketing
Offi cer
Total
executive KMP
–
–
–
–
–
–
–
–
–
–
–
–
–
67,194 1,692,269
46,981
768,705
17,824
794,301
50,562
787,462
18,297
800,090
48,549
17,666
766,238
771,929
–
–
12,619
529,294
–
14,827
–
–
555,572
–
11,041
414,089
29.1%
20.6%
27.3%
22.0%
27.6%
21.7%
27.1%
–
23.6%
–
19.2%
–
23.0%
23.6%
26.4%
2021
277,702
84,186
2,992
364,880
21,694
16,474
2022 2,903,060 624,615
3,821,892 1,307,418
2021
11,225 3,538,900
25,294 5,154,604
94,272 60,872
91,614
151,858
– 320,770 4,014,813
159,468 5,557,544
–
1 Long service leave relates to amounts accrued during the year.
2 The EIP cash bonus is for performance during the year using the criteria set out in section 2.3.1. The amount was fi nally determined by the Board
on 19 August 2022 after considering recommendations of the People & Culture Committee.
3 The value disclosed is the portion of the fair value of the rights recognised as an expense in each reporting period.
4 The roles of the Chief Technology Offi cer (Stephen Haddad), Chief Content Offi cer (Dave Cameron), and Chief Marketing Offi cer (Nikki Clarkson) were assessed
as KMP in FY21. For the reasons explained in the letter of the Chair of the Board’s People & Culture Committee, the Board has assessed these roles were not
KMP roles during FY22.
2022 Annual Report
Directors’ Report | 45
Directors’ Report
For the year ended 30 June 2022
3.3 Non-executive directors
The table below sets out the nature and amount of each major element of the remuneration of each non-executive director in FY22 and
FY21. A non-executive director’s salary and fees are based on the scale set out in section 2.7 and membership of the Board’s committees
as set out in the Directors’ Report.
Non-executive Director
Rob Murray1
Chair
Glen Boreham5
Non-executive director
Peter Bush2
Non-executive director
Carole Campbell3
Non-executive director
Ido Leffl er3
Non-executive director
Heith Mackay-Cruise3
Non-executive director
Helen Nash
Non-executive director
Leon Pasternak4
Non-executive director
Melanie Willis
Non-executive director
Total
Short-term employee benefi ts
Salary
and fees
$
273,000
248,648
175,000
170,940
–
53,573
143,295
115,677
150,273
101,979
150,273
101,979
167,045
166,511
–
49,559
153,977
170,625
1,212,863
1,179,491
Year
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Non-
monetary
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$
273,000
248,648
175,000
170,940
–
53,573
143,295
115,677
150,273
101,979
150,273
101,979
167,045
166,511
–
49,559
153,977
170,625
1,212,863
1,179,491
Post-
employment
Super
contribution
$
–
4,170
–
3,743
–
5,089
14,330
10,989
15,027
9,688
15,027
9,688
7,955
7,506
–
4,708
15,398
–
67,737
55,581
Total
273,000
252,818
175,000
174,683
–
58,662
157,625
126,666
165,300
111,667
165,300
111,667
175,000
174,017
–
54,267
169,375
170,625
1,280,600
1,235,072
1 Rob Murray was elected by the Board as Chair on 19 August 2020.
2 Peter Bush stood down as Chair on 19 August and retired as a director on 30 October 2020.
3 Carole Campbell was appointed as a director on 1 September 2020 and appointed Chair of the Audit & Risk Committee from 1 October 2021.
Ido Leffl er and Heith Mackay-Cruise were elected as directors on 30 October 2020.
4 Leon Pasternak retired as Deputy Chair and as a director on 30 October 2020. The Board has not appointed a Deputy Chair in his place.
5 Glen Boreham was appointed as Chair of the newly formed Digital Transformation Committee on 1 November 2020.
46 | Directors’ Report
Southern Cross Austereo
4. Analysis of incentives included in remuneration
4.1 EIP performance outcomes
4.1.1 EIP fi nancial and profi tability measures
The table below summarises SCA’s performance against the fi nancial and profi tability measures included in the KPIs for executive KMP
under the EIP in FY22.
Group EBITDA
Budget
$’000
$116,172
Actual
$’000
$85,580
EPS (excluding signifi cant items)
Actual
Budget
Cps
Cps
% Budget
74%
% Budget
10.77
62%
17.4
Revenue
Budget
$’000
$564,980
Digital revenue
Budget
$’000
$27,866
Actual
$’000
$519,682
Actual
$’000
$20,746
% Budget
92%
% Budget
74%
% Budget
Non-revenue related costs
Budget
$’000
Actual
$’000
$317,627
$307,582
100%
Vesting
%
–
Vesting
%
–
Vesting
%
–
Vesting
%
–
Vesting
%
25%1
Executive KMP
CEO, CFO, COO, CSO
Executive KMP
CEO, CFO, COO, CSO
Executive KMP
CEO, CFO, COO, CSO
Executive KMP
CEO, CFO, COO, CSO
Executive KMP
CEO, CFO, COO, CSO
1 Although the non-revenue related costs target within the profi tability and fi nancial performance component of the FY22 EIP was fully achieved, on
the recommendation of the CEO, the Board exercised its discretion downward to award only 25% of the available reward for achievement of this target.
This recognised the cost control exercised and led by executive KMP in diffi cult economic conditions, while also acknowledging SCA’s overall fi nancial
performance was below target. This resulted in a small award (3% out of a possible 12%) for achievement of this target.
2022 Annual Report
Directors’ Report | 47
Directors’ Report
For the year ended 30 June 2022
4.1.2 EIP outcomes for executive KMP
The table below summarises the key performance indicators (KPIs) applicable for each executive KMP under SCA’s EIP for FY22.
Assessment of the goals set for executive KMP in FY22 resulted in executive KMP being eligible to receive between 38% and 41% of their
respective EIP target opportunities. While fi nancial performance and profi tability targets were not achieved, the Board considered these
awards to recognise appropriately the achievements of the executive team in diffi cult macroeconomic conditions. The executive team did
a creditable job in controlling costs and made good progress on strategic initiatives designed to embed a digital audio operating model
and grow the user base and commercial potential of LiSTNR. Half of each executive’s award (and 60% of the CEO’s award) will be settled
by grant of performance rights that will be eligible for vesting after 30 June 2024, strongly aligning executives’ interests with those of
other shareholders.
The table below shows the outcome for each executive KMP in each EIP component.
Executive KMP
Goals
Grant Blackley, CEO and Managing Director
Outcomes
Group EBITDA, EPS, digital revenue, non-revenue-related Group
operating expenses compared to budget
Refer to tables in section 4.1.1.
Profi tability
and fi nancial
performance (60%)
Strategy
execution (30%)
Profi tability
and fi nancial
performance (60%)
Strategy
execution (30%)
Implement Horizon 1 of corporate strategy
Partially achieved
Implement digital audio fi rst operating model and culture
Achieved
Implement strategy to create leading commercial radio shows in core
markets and target demographics
Partially achieved
Cultural and
behavioural
infl uences (10%)
Identify skills and capabilities required to deliver SCA’s strategic
objectives. Improve diversity through your succession plans
Achieved
Improve employee perceptions of job security and job signifi cance
Achieved
Nick McKechnie, Chief Financial Offi cer
Group EBITDA, EPS, digital revenue, non-revenue-related Group
operating expenses compared to budget
Refer to tables in section 4.1.1.
Implement digital audio fi rst operating model and culture
Partially achieved
Refi nance SCA’s debt facilities to create a fl exible structure
Achieved
Provide functional leadership and risk management for implementation
of a refreshed ERP fi nance system
Partially achieved
Cultural and
behavioural
infl uences (10%)
Identify skills and capabilities required to deliver SCA’s strategic
objectives. Improve diversity through your succession plans
Achieved
Improve communication and collaboration in fi nance team to remove
business barriers and improve stakeholder relationships
Achieved
John Kelly, Chief Operating Offi cer
Profi tability
and fi nancial
performance (60%)
Strategy
execution (30%)
Group EBITDA, EPS, digital revenue, non-revenue-related Group
operating expenses compared to budget
Refer to tables in section 4.1.1.
Implement digital audio fi rst operating model
Develop new premium podcasts for targeted audience and
inventory growth
Achieved
Partially achieved
Establish LiSTNR Sport as a content pillar
Cultural and
behavioural
infl uences (10%)
Identify skills and capabilities required to deliver SCA’s strategic
objectives. Improve diversity through your succession plans
Lead the general management team to ensure it is collaborative and
courageous in implementing the digital audio strategy
Achieved
Achieved
Achieved
3%
26%
10%
Total 39%
3%
25%
10%
Total 38%
3%
28%
10%
41%
Total
48 | Directors’ Report
Southern Cross Austereo
Executive KMP
Goals
Brian Gallagher, Chief Sales Offi cer
Outcomes
Profi tability
and fi nancial
performance (60%)
Group EBITDA, EPS, digital revenue, non-revenue-related Group
operating expenses compared to budget
Refer to tables in section 4.1.1.
Strategy
execution (30%)
Deliver superior sales performance in metro radio through eff ective
yield management and premium ideation
Partially achieved
Deliver strong sales outcomes for the new affi liation with Network 10
Achieved
Drive regional radio revenue performance through developing local
sales teams and leading the Boomtown national sales initiative
Achieved
3%
28%
Cultural and
behavioural
infl uences (10%)
Identify skills and capabilities required to deliver SCA’s strategic
objectives. Improve diversity through your succession plans
Achieved
Promote remuneration structures for sales teams that drive
collaboration, reduce internal competitiveness, and maximise
revenue opportunities
Partially achieved
9%
Total 40%
4.2 EIP awards
The table below sets out details of the incentive awards granted as remuneration to executive KMP for the year. Although the non-
revenue-related costs target within the profi tability and fi nancial performance component of the FY22 EIP was fully achieved, on the
recommendation of the CEO, the Board exercised its discretion downward to award only 25% of the available reward for achievement of
this target. This resulted in a small award (3% out of a possible 60%) for all executive KMP under the profi tability and fi nancial performance
component of the EIP.
Executive incentive plan
% achieved in year
Cash award
included in
remuneration1
$
272,974
111,077
122,916
117,648
Performance
rights to be
granted2
$
409,461
111,077
122,916
117,648
Profi tability
and fi nancial
performance4
Strategy
execution
Cultural and
behavioural
infl uences
%
forfeited
in year3
3%
3%
3%
3%
26%
25%
28%
28%
10%
10%
10%
9%
61%
62%
59%
60%
KMP
Grant Blackley
Nick McKechnie
John Kelly
Brian Gallagher
1 Amounts included in remuneration for the year represent the cash component of EIP awards related to the year based on achievement of corporate and
personal goals for each executive. These amounts were approved by the Board on 19 August 2022.
2 Performance rights will be granted during September 2022 based on the face value of performance rights to be determined as set out in section 2.3.1.
3 The amounts forfeited are due to corporate and personal goals not being achieved in the year.
4 Although the non-revenue related costs target within the profi tability and fi nancial performance component of the FY22 EIP was fully achieved, on the
recommendation of the CEO, the Board exercised its discretion downward to award only 25% of the available reward for achievement of this target.
This recognised the cost control exercised and led by executive KMP in diffi cult economic conditions, while also acknowledging SCA’s overall fi nancial
performance was below target. This resulted in a small award (3% out of a possible 12%) for achievement of this target.
5. Share-based incentive payments
All references to rights in this section are to performance rights over fully paid ordinary shares in SCA issued under SCA’s EIP or LTI plan.
Rights are convertible into fully paid ordinary shares in SCA on a one-for-one basis upon vesting in accordance with SCA’s EIP or LTI plan.
There are no options on issue under SCA’s EIP or LTI plan.
5.1 Rights granted as remuneration during the year
There were no rights over shares granted as remuneration to executive KMP during the year under SCA’s LTI plan or under SCA’s new EIP.
As noted in section 4.2, performance rights will be granted under the EIP during September 2022 based on the face value of performance
rights to be determined as set out in section 2.3.1.
2022 Annual Report
Directors’ Report | 49
Directors’ Report
For the year ended 30 June 2022
The tables below set out details of the rights over shares granted as remuneration to each executive KMP under SCA’s LTI plan during FY21
and which remain on foot on 30 June 2022.
KMP
Grant Blackley
Nick McKechnie
John Kelly
Brian Gallagher
Total
Details for performance rights granted in FY21 under the LTI plan
Grant Date
Metric (100%)
Face value at grant date1
Starting share price on 30 June 20201
Vesting date
25 September 2020
Absolute TSR
$1.6230
$1.8190
30 June 2023
Number
of rights
granted
(Base Amount)1
125,989
33,420
34,307
33,124
226,840
Maximum
number
of rights
to vest2
314,973
83,550
85,767
82,810
567,100
1 The number of rights granted, the face value of those rights and the starting share price for the purposes of calculating TSR are stated after adjustment
for the one for 10 consolidation of the Company’s share capital implemented on 2 November 2020.
2 As explained in section 2.3.2, the number of performance rights that vests under the FY21 LTI plan will be subject to a multiplier according to the TSR
performance of the Company over the three-year performance period. For TSR performance of 100%, a multiplier of 2x applies so that the number of
performance rights that vests will be double the Base Amount granted to the executive. The maximum multiplier is 2.5x for TSR performance of 150%
over the three-year performance period.
All performance rights expire on the earlier of their vesting date or termination of the executive’s employment. When an executive ceases
employment as a good leaver, the executive’s rights will typically be forfeited on a pro-rata basis according to the executive’s period of
service. The rights vest at the end of the performance period specifi ed at the time of their grant. This is 30 June 2023 for performance
rights granted under the FY21 LTI plan. In addition to a continuing employment condition, vesting is conditional on SCA achieving specifi ed
performance hurdles. Details of the performance hurdles are included in the discussion of the LTI plan in section 2.3.2.
5.2 Details of equity incentives aff ecting current and future remuneration
The table below sets out the vesting profi les of rights held by each executive KMP on 30 June 2022 and details of rights that vested
during the year. At the end of the year, there were no rights that had vested and had not been exercised by conversion to fully paid
ordinary shares.
At grant date
During FY22
At year end
Executive
KMP
Grant
date
Vesting
date
Perf
rights
granted1
Perf
rights
vested
and
exercised
Perf
rights
vested
and
exercised
%
Perf
rights
value2
$
Perf
rights
forfeited
Perf
rights
forfeited
%
Perf
3
rights
cancelled3
Perf
rights
cancelled3
%
Perf
rights
not
vested
Perf
rights
not
vested
value2
$
Grant
Blackley
Nick
McKechnie
John
Kelly
Brian
Gallagher
FY21
01/7/23 125,989 201,582
Total
125,989 201,582
FY21
01/7/23
33,420
53,471
Total
33,420
53,471
FY21
01/7/23
34,307
54,891
Total
34,307 54,891
FY21
01/7/23
33,124
52,998
Total
Total
33,124 52,998
226,840 362,942
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
125,989 201,582
– 125,989 201,582
–
–
–
–
–
–
33,420
53,471
33,420
53,471
34,307
54,891
34,307
54,891
33,124
52,998
33,124 52,998
– 226,840 362,942
1 The number of performance rights granted (Base Amount) is stated after adjustment for the one for 10 consolidation of the Company’s share capital
implemented on 2 November 2020. As explained in section 2.3.2, the number of performance rights that vests will be subject to a multiplier according to
the TSR performance of the Company over the three-year performance period. For TSR performance of 100%, a multiplier of 2x applies so that the number
of performance rights that vests will be double the Base Amount granted to the executive. The maximum multiplier is 2.5x for TSR performance of 150% over
the three-year performance period.
2 The value of rights granted is the fair value of rights calculated at the grant date, adjusted in the case of performance rights granted under the FY21 LTI plan,
for the one for 10 consolidation of the Company’s share capital implemented on 2 November 2020. The total value of rights granted in the table is allocated
to remuneration over the vesting period.
3 The number and percentage of rights forfeited during the year is the reduction from the maximum number of rights available to vest due to the performance
criteria not being satisfi ed or to rights being cancelled by the Board.
50 | Directors’ Report
Southern Cross Austereo
5.3 Vesting of rights during the year
Performance rights granted under the FY19 LTI plan were due to be tested in August 2021, following approval of SCA’s fi nancial report
for the year ended 30 June 2021. Performance rights granted under the FY20 LTI plans were due to be tested in August 2022. There
were two equally-weighted performance conditions for rights granted under each of these plans: the Company’s ROIC performance
over the performance period and the Company’s EPS performance over the performance period.
Because of the impact on the Company’s business of the COVID-19 health crisis and the lockdown measures implemented by Federal,
State and Territory governments in response to the crisis, the Board cancelled all outstanding performance rights under the FY19 and
FT20 LTI plans.
As a result, no rights granted under the LTI plan in FY19 or FY20 will vest.
5.4 Grants and vesting of rights since 30 June 2022
Awards made under SCA’s EIP for FY22 will be satisfi ed partly in cash and partly by grant of performance rights. The number of
performance rights to be granted will be based on the face value of the rights, which will be determined under the formula set out
in section 2.3.1.
These rights will be eligible for vesting at the end of the three-year performance period on 30 June 2024, subject to satisfaction
of the conditions described in section 2.3.1.
No rights, whether granted under the former LTI plan or the EIP, have vested since 30 June 2022.
6. Payments to executives before taking offi ce
There were no payments made during the year to any person as part of the consideration for the person taking offi ce.
7. Transactions with KMP
7.1 Loans to KMP
There were no loans made to KMP or their related parties during the year.
7.2 Other transactions and balances with KMP
There were no other transactions with KMP or their related parties during the year.
8. KMP shareholdings
8.1 Balances and movements in KMP shareholdings
The table below sets out the movements in shares held directly or indirectly by KMP during the year.
Non-executive Directors
Rob Murray
Glen Boreham
Carole Campbell
Ido Leffl er
Heith Mackay-Cruise
Helen Nash
Melanie Willis
Executives
Grant Blackley
Nick McKechnie
John Kelly
Brian Gallagher
Share
balance
at start
of year
65,167
48,462
57,250
65,800
56,380
28,875
40,796
362,730
168,545
63,679
26,630
57,597
316,451
Received during the year
STI Plan
Vesting of
EIP rights
Vesting of
LTI rights
–
–
–
–
–
–
–
50,974
19,081
19,419
18,310
107,784
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Other
changes
during
the year
Share
balance at
end of year
–
–
21,000
–
18,190
–
–
39,190
–
–
–
–
–
65,167
48,462
78,250
65,800
74,570
28,875
40,796
401,920
219,519
82,760
46,049
75,907
424,235
2022 Annual Report
Directors’ Report | 51
Directors’ Report
For the year ended 30 June 2022
8.2 Board’s target share ownership policies
The Board’s non-executive director Share Ownership Policy requires non-executive directors to invest an amount not less than the base
fee of a non-executive director in acquiring SCA shares. A non-executive director is required to do so within three years after appointment
as a director. The proceeds of any sales of shares will be deducted from a non-executive director’s invested amount. The current base fee
for non-executive directors is $136,500. The table below shows the status under this policy of non-executive directors’ shareholdings.
Non-executive Director
Rob Murray
Glen Boreham
Carole Campbell
Ido Leffl er
Heith Mackay-Cruise
Helen Nash
Melanie Willis
Share balance
at end of year
FY22
Base fee
$
Invested
amount
$
Achieved
target?
Due date to
achieve target
65,167
48,462
78,250
65,800
74,570
28,875
40,796
401,920
136,500
136,500
136,500
136,500
136,500
136,500
136,500
245,286
199,884
137,011
114,608
139,910
144,033
207,909
1,188,641
Yes
Yes
Yes
No
Yes
Yes
Yes
–
–
–
Oct 2023
–
–
–
The Board’s Senior Executive Share Ownership Policy requires executive KMP (and the CEO’s other direct executive reports) to invest
an amount not less than 50% of the executive’s base salary in acquiring SCA shares. The CEO must invest an amount not less than 100%
of the CEO’s base salary in acquiring SCA shares. The market price at the time of allocation to an executive of shares under one of SCA’s
executive incentive plans is included in the executive’s invested amount. The proceeds of any sales of shares will be deducted from an
executive’s invested amount. There is no due date by which an executive must acquire the target shareholding. The table below shows
the status under this policy of the shareholding of each executive KMP.
Executive KMP
Grant Blackley
Nick McKechnie
John Kelly
Brian Gallagher
Balance at
end of year
FY22
Base salary
$
Invested
amount
$
Achieved
target?
219,519
82,760
46,049
75,907
424,235
1,227,277
584,775
600,080
585,200
2,997,332
1,044,293
307,583
167,888
302,534
1,822,298
No
Yes
No
Yes
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration, as required under s307C of the Corporations Act 2001, is set out on page 53.
This report is signed in accordance with resolutions of the directors of Southern Cross Media Group Limited.
Rob Murray
Chair
Southern Cross Media Group Limited
Sydney, Australia
22 August 2022
Grant Blackley
Managing Director
Southern Cross Media Group Limited
Sydney, Australia
22 August 2022
52 | Directors’ Report
Southern Cross Austereo
Auditor’s Independence Declaration
Auditor’s Independence Declaration
As lead auditor for the audit of Southern Cross Media Group Limited for the year ended 30 June 2022,
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 Southern Cross Media Group Limited and the entities it controlled
during the period.
Trevor Johnston
Partner
PricewaterhouseCoopers
Melbourne
22 August 2022
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
2022 Annual Report
Auditor’s Independence Declaration | 53
Consolidated Statement
of Comprehensive Income
For the year ended 30 June 2022
Revenue from continuing operations
Revenue related expenses
Employee expenses
Program and production
Technical expenses
Promotions and marketing
Administration costs
Other income
Share of net profi t of investments accounted for using the equity method
Profi t before depreciation, amortisation, interest, impairment, fair value
movements on fi nancial derivatives and income tax expenses for the year from
continuing operations
Depreciation and amortisation expense
Impairment of intangibles and investments
Interest expense and other borrowing costs
Interest revenue
(Loss)/Profi t before income tax expense for the year from continuing operations
Income tax credit/(expense) from continuing operations
(Loss)/Profi t from continuing operations after income tax expense for the year
Other comprehensive income that may be reclassifi ed to profi t or loss:
Changes to fair value of cash fl ow hedges, net of tax
Total comprehensive (loss)/profi t for the year attributable to shareholders
Earnings per share attributable to the ordinary equity holders of the Company:
Basic earnings per share (cents)
Diluted earnings per share (cents)
Note
3
6
5
19
4
17
7
15
15
2022
$’000
519,682
(127,297)
(197,797)
(24,130)
(41,801)
(20,064)
(23,790)
16
761
85,580
(31,851)
(251,718)
(16,219)
140
(214,068)
60,346
(153,722)
1,658
(152,064)
2021
$’000
528,649
(158,396)
(147,559)
(20,582)
(40,845)
(16,367)
(20,180)
510
706
125,936
(32,770)
–
(23,201)
1,317
71,282
(23,186)
48,096
3,781
51,877
(58.30)
(58.30)
18.2
18.2
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
54 | Consolidated Statement of Comprehensive Income
Southern Cross Austereo
Consolidated Statement
of Financial Position
For the year ended 30 June 2022
Current assets
Cash and cash equivalents
Receivables
Derivative fi nancial instruments
Current tax asset
Total current assets
Non-current assets
Receivables
Right-of-use assets
Investments
Property, plant and equipment
Intangible assets
Total non-current assets
Total assets
Current liabilities
Payables
Deferred Income
Provisions
Lease liability
Current tax liability
Derivative fi nancial instruments
Total current liabilities
Non-current liabilities
Deferred income
Provisions
Borrowings
Lease liability
Deferred tax liability
Derivative fi nancial instruments
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Other equity transaction
Accumulated losses
Equity attributable to equity holders
Total equity
Note
11
12
18
12
25
19
8
9
12
12
12
25
7
18
12
12
17
25
7
18
16
16
2022
$’000
49,462
100,947
787
2,622
153,818
11,932
110,759
6,465
84,554
703,796
917,506
2021
$’000
75,420
98,687
–
–
174,107
12,974
98,689
5,969
87,199
947,903
1,152,734
1,071,324
1,326,841
48,930
6,742
20,620
6,497
–
–
82,789
88,260
4,854
126,943
120,322
187,749
–
528,128
610,917
460,407
56,884
7,306
17,125
9,868
5,843
319
97,345
90,142
5,546
127,225
103,101
259,701
1,262
586,977
684,322
642,519
1,537,404
5,749
–
(1,082,746)
460,407
460,407
1,542,884
3,559
(77,406)
(826,518)
642,519
642,519
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
2022 Annual Report
Consolidated Statement of Financial Position | 55
2022
Total equity at 1 July 2021
Loss for the year
Other comprehensive income
Total comprehensive income
Transactions with equity
holders in their capacity as
equity holders:
Buy-back of ordinary shares
Transfer of reserves1
Employee share entitlements
Dividends Paid
Consolidated Statement
of Changes in Equity
For the year ended 30 June 2022
Contributed
equity
$’000
1,542,884
–
–
–
Share-based
payment
reserve
$’000
4,664
–
–
–
Other
equity
transactions
$’000
(Accumulated
losses)/
retained
profi ts
$’000
(77,406)
–
–
(826,518)
(153,722)
–
Non-
controlling
interest
$’000
Total
equity
$’000
–
–
–
642,519
(153,722)
1,658
Total
$’000
642,519
(153,722)
1,658
–
(153,722)
(152,064)
– (152,064)
Hedge
reserve
$’000
(1,105)
–
1,658
1,658
(5,480)
–
–
–
(5,480)
–
–
532
–
532
–
–
–
–
–
–
77,406
–
–
–
(77,406)
–
(25,100)
(5,480)
–
532
(25,100)
77,406
(102,506)
(30,048)
–
–
–
–
–
–
(5,480)
–
532
(25,100)
(30,048)
460,407
Total equity at 30 June 2022
1,537,404
5,196
553
–
(1,082,746)
460,407
1 The Group transferred the reverse acquisition reserve of $77.406 million in connection with the IPO of the Group, into Accumulated losses
eff ective 30 June 2022.
Other
equity
transactions
$’000
(Accumulated
losses)/
retained
profi ts
$’000
Total
$’000
588,099
48,096
3,781
51,877
(874,614)
48,096
–
48,096
2021
Total equity at 1 July 2020
Profi t for the year
Other comprehensive income
Total comprehensive income
Transactions with equity
holders in their capacity as
equity holders:
Contributions of equity, net of
transaction costs
Employee share entitlements
Acquisition of remaining interest
Contributed
equity
$’000
1,540,569
–
–
–
Share-based
payment
reserve
$’000
4,436
–
–
–
Hedge
reserve
$’000
(4,886)
–
3,781
3,781
2,315
–
–
2,315
–
228
–
228
–
–
–
–
(77,406)
–
–
–
–
–
–
–
–
–
–
–
2,315
228
–
2,543
Non-
controlling
interest
$’000
298
–
–
–
–
–
(298)
(298)
Total
equity
$’000
588,397
48,096
3,781
51,877
2,315
228
(298)
2,245
Total equity at 30 June 2021
1,542,884
4,664
(1,105)
(77,406)
(826,518)
642,519
–
642,519
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
56 | Consolidated Statement of Changes in Equity
Southern Cross Austereo
Consolidated Statement
of Cash Flows
For the year ended 30 June 2022
Cash fl ows from operating activities
Receipts from customers
Payments to suppliers and employees
Government grants received
Interest received from external parties
Tax paid
Net cash infl ows from operating activities
Cash fl ows from investing activities
Payments for purchase of property, plant and equipment
Payments for purchase of intangibles
Proceeds from sale of property, plant and equipment
Payments for acquisitions of unlisted equity securities
Dividends received from equity accounted investments
Net cash fl ows used in investing activities
Cash fl ows from fi nancing activities
Dividends paid to security holders
Repayment of borrowings from external parties
Refi nancing costs paid to external parties
Buy-back of ordinary shares
Interest paid to external parties
Principal elements of lease payments
Net cash fl ows used in fi nancing activities
Net decrease in cash and cash equivalents
Cash assets at the beginning of the year
Cash assets at the end of the year
Note
2022
$’000
2021
$’000
11
563,782
(488,932)
–
140
(20,780)
54,210
(24,574)
(5,321)
80
(1,173)
640
(30,348)
(25,100)
–
(1,235)
(5,480)
(10,018)
(7,987)
(49,820)
(25,958)
75,420
49,462
548,547
(465,172)
47,418
1,317
(15,950)
116,160
(13,821)
(123)
2,481
(500)
560
(11,403)
–
(275,000)
–
–
(19,564)
(6,204)
(300,768)
(196,011)
271,431
75,420
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
2022 Annual Report
Consolidated Statement of Cash Flows | 57
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Key Numbers
Capital Management
Group Structure
Other
1.
Summary of Signifi cant
Accounting Policies
13. Capital Management
19. Non-Current Assets –
Objectives
Investments
22. Share-Based Payments
2. Segment Information
14. Dividends Paid
and Proposed
20. Subsidiaries
23. Remuneration
of Auditors
3. Revenue
15. Earnings per Share
21. Parent Entity
Financial Information
24. Related Party
Disclosures
4. Signifi cant Items
16. Contributed Equity
and Reserves
5. Other Income
17. Borrowings
6. Government Grants
18. Financial Risk
Management
25. Leases and Other
Commitments
26. Events Occurring
after Balance Date
27. Other Accounting
Policies
7.
Income Tax Expense
8. Non-Current Assets –
Property, Plant
and Equipment
9. Non-Current Assets –
Intangible Assets
10.
Impairment
11. Cash fl ow Information
12. Receivables, Payables,
Deferred Income
and Provisions
58 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
The purchase method of accounting is used to account for the
acquisition of subsidiaries by the Group except as follows:
– At the time of Initial Public Off ering (‘IPO’) Southern Cross Media
Australia Holdings Pty Limited (‘SCMAHL’) was deemed to be
the accounting acquirer of both Southern Cross Media Group
Limited (‘SCMGL’) and Southern Cross Media Trust (‘SCMT’),
which was neither the legal parent nor legal acquirer; and
– This refl ects the requirements of AASB 3 that in situations where
an existing entity (SCMAHL) arranges to be acquired by a smaller
entity (SCMGL) for the purposes of a stock exchange listing, the
existing entity SCMAHL should be deemed to be the acquirer,
subject to consideration of other factors such as management of
the entities involved in the transaction and relative fair values of
the entities involved in the transaction. This is commonly referred
to as a reverse acquisition.
At the time of IPO, in November 2005, the reverse acquisition
guidance of AASB 3 was applied to the Group and the cost of
the Business Combination was deemed to be paid by SCMAHL
to acquire SCMGL and SCMT. The cost was determined by
reference to the fair value of the net assets of SCMGL and SCMT
immediately prior to the Business Combination. The investment
made by the legal parent SCMGL in SCMAHL to legally acquire
the existing radio assets is eliminated on consolidation. In applying
the guidance of AASB 3, this elimination resulted in a debit of
$77.4 million to other equity transactions. The Group transferred this
reserve to Accumulated losses eff ective 30 June 2022. This does
not aff ect the Group’s distributable profi ts or ability to pay dividends.
Rounding of amounts
The Company is of a kind referred to in ASIC Legislative Instrument
2016/191, relating to the ‘rounding off ’ of amounts in the Directors’
Report and Financial Report. Amounts have been rounded off in
accordance with the Instrument to the nearest thousand dollars,
unless otherwise indicated.
Critical accounting estimates and judgements
The preparation of the fi nancial report in accordance with Australian
Accounting Standards requires the use of certain critical accounting
estimates. It also requires management to exercise judgement in
the process of applying the accounting policies. Estimates and
judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future
events that may have a fi nancial impact on the entity and that are
believed to be reasonable under the circumstances. Management
believes the estimates used in the preparation of the fi nancial report
are reasonable. Actual results in the future may diff er from those
reported. Judgements and estimates which are material to the
fi nancial report are found in the following notes:
Note 9 Non-Current Assets – Intangible Assets
Note 10
Note 12 Receivables, Payables, Deferred Income and Provisions
Note 25 Leases and Other Commitments
Impairment
Key Numbers
1.
Summary of Signifi cant Accounting Policies
The principal accounting policies adopted in the preparation
of these consolidated fi nancial statements are set out below.
In addition, signifi cant and other accounting policies that
summarise the measurement basis used and that are relevant
to an understanding of the fi nancial statements are provided
throughout the notes to the fi nancial statements. These policies
have been consistently applied to all the years presented, unless
otherwise stated. The fi nancial statements are for the consolidated
entity consisting of Southern Cross Media Group Limited
(‘the Company’) and its subsidiaries (‘the Group’).
Basis of preparation
This general purpose fi nancial report has been prepared in
accordance with Australian Accounting Standards and the
Corporations Act 2001 (where applicable). The Group is a for-profi t
entity for the purpose of preparing the fi nancial statements.
These fi nancial statements have been prepared on a going concern
basis. The Group has performed an assessment of its ability to
continue as a going concern. The assessment has considered
the balance sheet position, including $49.5 million of cash and
cash equivalents at 30 June 2022; forecast performance; and
the expectations that the Group will comply with its debt facility
covenants. Based on the assessment, the Group concluded
that these fi nancial statements should be prepared on a
going concern basis.
Information in respect of the parent entity in this fi nancial report
relates to Southern Cross Media Group Limited.
i) Compliance with IFRS
Compliance with Australian Accounting Standards ensures that
the fi nancial statements and notes of the Group comply with
International Financial Reporting Standards (‘IFRS’) as issued
by the International Accounting Standards Board (‘IASB’).
Consequently, this fi nancial report has also been prepared in
accordance with and complies with IFRS as issued by the IASB.
ii) Historical cost convention
These fi nancial statements have been prepared under the historical
cost convention, as modifi ed by the revaluation of certain fi nancial
assets and liabilities (including derivative instruments) at fair value
through profi t or loss. All amounts are presented in Australian
dollars, unless otherwise noted.
iii) Comparative fi gures
Where necessary, comparative fi gures have been adjusted
to conform to changes in presentation in the current year.
Principles of consolidation
The consolidated fi nancial statements incorporate the assets and
liabilities of all subsidiaries of the Company as at 30 June 2022 and
the results of all subsidiaries for the year then ended. Subsidiaries
are all entities over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to
aff ect 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. The eff ects of all transactions
between entities in the Group are eliminated in full.
2022 Annual Report
Notes to the Consolidated Financial Statements | 59
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
1. Summary of Signifi cant Accounting Policies (continued)
Coronavirus (COVID-19) and other environmental factors
The Group’s results were signifi cantly impacted by continuous COVID-19 lockdowns throughout the current year and prior year. In addition
to the pandemic, external factors including natural disasters, the war in Ukraine and the possibility of recession have all contributed to the
pace of recovery.
As a consequence, management has:
– Continued to evaluate areas of judgement or estimation uncertainty;
– Updated its economic outlook, principally for the purposes of input into its expected credit losses through the application of forward-
looking information, but also for the input into the impairment analysis of fi nancial and non-fi nancial assets classes and disclosures such
as fair value disclosures of fi nancial assets and liabilities; and
– Reviewed public forecasts and experience from previous downturns for input into the impairment assessment of the Audio CGU.
Further judgements and estimates were required due to these external factors and are detailed further in the notes to the fi nancial
statements, in particular:
Impairment
Note 10
Note 12 Receivables, Payables, Deferred Income and Provisions
Note 13 Capital Management Objectives
Note 18 Financial Risk Management
Note 19 Non-Current Assets – Investments
Notes to the fi nancial statements
Notes relating to individual line items in the fi nancial statements now include accounting policy information where it is considered relevant
to an understanding of these items, as well as information about critical accounting estimates and judgements. Details of the impact of new
accounting policies and all other accounting policy information are disclosed at the end of the fi nancial report in note 27.
2. Segment Information
AASB 8 requires operating segments to be identifi ed on the basis of internal reports about components of the Group that are regularly
reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance.
The Group has determined operating segments are based on the information reported to the Group CEO and the Company Board
of Directors. The Group has determined that it has two main operating segments being:
– Audio, comprising metro and regional radio, digital and other related businesses; and
– Television, comprising the regional television business.
Segment revenue
National revenue 1
Local revenue2
Other
Total revenue
Reported EBITDA
EBITDA % of Revenue
Impairment of intangibles
and investments
Depreciation
and amortisation
Statutory EBIT/
Segment Result
Financing costs
Income tax credit (expense)
Profi t/(Loss) for the
year attributable
to shareholders
Audio
Television
Corporate
Consolidated
2022
$’000
392,811
213,377
137,849
41,585
2021
$’000
2022
$’000
358,465
126,216
194,959
130,466
33,040
77,572
41,382
7,262
2021
$’000
169,627
103,023
53,937
12,667
392,811
358,465
126,216
169,627
2022
$’000
2021
$’000
2022
$’000
2021
$’000
655
–
–
655
655
557
–
–
557
557
519,682
528,649
290,949
179,231
49,502
297,982
184,403
46,264
519,682
528,649
85,824
21.8%
115,021
32.1%
30,010
23.8%
38,092
(30,254)
(27,177)
85,580
125,936
22.5%
N/A
N/A
16.5%
23.8%
(251,718)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(251,718)
–
(31,851)
(32,770)
(197,989)
(16,079)
60,346
93,166
(21,884)
(23,186)
(153,722)
48,096
1 National revenue is sold by SCA’s national sales team who are able to sell all SCA products across all markets.
2 Local revenue is sold directly by SCA’s local sales team who are only able to sell local products specifi c to the particular market.
60 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
3. Revenue
The profi t before income tax from continuing operations included the following specifi c items of revenue:
Revenue from continuing operations
Sales revenue
Rental revenue
Total revenue from continuing operations
Consolidated
2022
$’000
2021
$’000
519,398
284
519,682
528,298
351
528,649
Recognition and Measurement
Revenues are recognised at fair value of the consideration received or receivable net of the amount of GST payable to the relevant
taxation authority.
Sales revenue
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 at the point the
underlying performance obligation has been completed and control of the services or goods passes to the customer.
Revenue represents revenue earned primarily from the sale of radio, digital and television advertising airtime and related activities,
including sponsorship and promotions.
Based on the Group being considered the principal entity in the sale of radio, digital and advertising, revenue is recognised gross
of rebates and agency commissions. For signifi cant payment terms refer to note 12.
Advertising revenue is recognised at a point in time when the underlying performance obligation has been satisfi ed, being primarily
when the advertisement is aired.
Sponsorship revenue is included within advertising revenue and the length of the sponsorship can vary in length of time. Revenue
is recognised over the period to which the sponsorship relates.
Production services used to create advertising suitable for broadcast is treated as a separate performance obligation. Production
revenue is recognised at a point in time when the Group has completed the production service, which is likely to be before the
relevant advertising is broadcast.
Included within advertising revenue is the Australian Traffi c Network (ATN) contract where revenue is recognised over time. The ATN
contract has been deemed to contain a signifi cant fi nancing component. Revenue from this contract has been recalculated over the
30-year contract period and has been grossed up to account for interest expense (for further detail refer to note 12).
Digital revenue is recognised at the point the underlying performance obligations of the contract have been delivered to the customer.
Historically SCA has acted as the principal for Radio and Television Advertising, however with the introduction and growth in the digital
market this is not always the case. New digital revenue streams have resulted in SCA having to determine whether it is the principal or
agent under AASB 15. SCA is the principal in a transaction when it has primary responsibility for fulfi lling the promise, the inventory risk
and discretion in establishing price. Revenue will be recognised as Gross when SCA is principal, with a corresponding expense for any fees
which could include agency commission in the traditional sense. SCA is the agent in a transaction when it receives a commission/revenue
share, has no inventory risk and little or no discretion in establishing price. Revenue will be recognised as net when SCA is an agent, with
no corresponding expense for any fees.
The Group derives other regular sources of operating revenue including commercial production for advertisers, facility sharing revenue
and third-party agency commissions.
4. Signifi cant Items
The net profi t after tax includes the following items whose disclosure is relevant in explaining the fi nancial performance of the Group.
Signifi cant items are those items of such a nature or size that separate disclosure will assist users to understand the fi nancial statements.
Impairment of intangibles and investments (refer notes 9, 10 and 19)
Other (after tax)
Total signifi cant items included in net profi t after tax
2022
$’000
(179,430)
(2,846)
(182,276)
2021
$’000
–
–
–
2022 Annual Report
Notes to the Consolidated Financial Statements | 61
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
5. Other Income
Net gain from disposal of assets
Total other income
Net assets disposed
Gross cash consideration
Net gain from disposal of assets before tax
Consolidated
2022
$’000
16
16
2022
$’000
(65)
81
16
2021
$’000
510
510
2021
$’000
(1,971)
2,481
510
6. Government Grants
As part of its response to COVID-19, in March 2020 the Australian Government announced various stimulus measures as a result of the
economic fallout from the coronavirus lockdown.
JobKeeper
The Group determined it was eligible to receive the initial JobKeeper Payment Scheme (‘JobKeeper’) for the period April to
September 2020.
The initial JobKeeper payments were a wage subsidy whereby employers who qualify for the stimulus received $1,500 per fortnight
for each eligible employee who was employed by the company during the period April 2020 to September 2020. Further to the initial
JobKeeper wage subsidy, the scheme was extended for two further quarters, albeit at lower rates. The Group has determined that it
was eligible to receive the fi rst period of the extension from 28 September 2020 to 3 January 2021.
The JobKeeper extension was a two-tier wage subsidy. In the fi rst extension quarter, employers who qualify for the stimulus received
$1,200 per fortnight for each eligible employee, who worked for 80 hours or more in the reference period; and $750 per fortnight for
eligible employees who worked less than 80 hours in the reference period.
The Group determined it was not eligible for the second extension period from January 2021 to March 2021.
During the prior year SCA received $37.1 million in JobKeeper funding, of which $31.9 million was recognised as income.
PING
The Group applied and was found eligible for funding under the Commonwealth Government’s Public Interest News Gathering (PING)
program. During the prior year SCA received $10.3 million for the period September 2020 to August 2021 of which $1.7 million was
recognised as income during this fi nancial year and $8.6 million in the prior year.
The PING program is a government incentive to support commercial television, radio and newspaper businesses in regional Australia
during COVID-19.
JobKeeper and PING payments are government grants and are accounted for under AASB 120 Accounting for Government Grants and
Disclosure of Government Assistance.
Government grants are recognised over the period of the grant at their fair value when there is reasonable assurance that the grant will be
received, and the Group will comply with all attached conditions. The impact on the Consolidated Statement of Comprehensive Income
is shown below.
JobKeeper
PING Program
Employee Costs
Total employee costs after Government Assistance
Consolidated
2022
$’000
–
1,711
(199,508)
(197,797)
2021
$’000
31,878
8,577
(188,014)
(147,559)
62 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
Income Tax Expense
7.
The income tax expense for the fi nancial year diff ers from the amount calculated on the net result from continuing operations.
The diff erences are reconciled as follows:
Income tax expense
Current tax
Current tax on profi ts for the year
Adjustments for current tax of prior periods
Total current tax expense
Deferred income tax
Decrease in net deferred tax liabilities
Adjustments for deferred tax of prior periods
Total deferred tax expense
Income tax (credit)/expense
Reconciliation of income tax expense to prima facie tax payable
(Loss)/profi t before income tax expense
Tax at the Australian tax rate of 30%
Tax eff ect of amounts which are not deductible/(taxable) in calculating taxable income
Impairment of intangibles and investments
Share of net profi ts of associates
Non-deductible entertainment expenses
Other non-deductible expenses
Adjustments recognised in the current year in relation to prior years
Income tax (credit)/expense
Deferred Taxes
The balance comprises temporary diff erences attributable to:
Licences and brands
Employee benefi ts
Provisions
Interest rate swaps
Right-of-use assets
Lease liabilities
Deferred revenue
Other
Net balance disclosed as deferred tax liability
Consolidated
2022
$’000
2021
$’000
10,806
1,510
12,316
(71,065)
(1,597)
(72,662)
(60,346)
(214,068)
(64,220)
3,227
(228)
797
165
(87)
(60,346)
26,311
594
26,905
(3,904)
185
(3,719)
23,186
71,282
21,385
–
(212)
621
613
779
23,186
Consolidated
2022
$’000
2021
$’000
(206,641)
6,882
865
(236)
(33,327)
38,145
3,459
3,104
(187,749)
(279,009)
5,887
1,027
474
(29,610)
33,896
2,986
4,648
(259,701)
For the year ended 30 June 2022, the Company had $0.7 million deferred income tax expense (2021: $1.6 million of deferred income
tax expense) recognised directly in equity in relation to cash fl ow hedges, with a corresponding reduction in deferred tax assets being
recognised. There are $60.644 million available of unused tax losses on the capital account for which no deferred tax asset has been
recognised (2021: $60.030 million). There are no other unused tax losses for which no deferred tax asset has been recognised.
2022 Annual Report
Notes to the Consolidated Financial Statements | 63
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Income Tax Expense (continued)
7.
Recognition and Measurement
Income Tax
Income tax amounts recognised in the Group’s fi nancial statements relate to tax paying entities within the Group and have been recognised
in accordance with Group policy.
The income tax expense for the year is the tax payable on the current year’s taxable income based on the applicable tax rate for each
jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary diff erences between the tax bases of assets
and liabilities and their carrying amounts in the fi nancial statements and adjusted by changes to unused tax losses.
Deferred Taxes
Deferred tax assets and liabilities are recognised for temporary diff erences at the tax rates expected to apply when the assets are
recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant
tax rates are applied to the cumulative amounts of deductible and taxable temporary diff erences to measure the deferred tax
asset or liability.
Deferred tax assets are recognised for deductible temporary diff erences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary diff erences and losses.
In determining the extent of temporary diff erences of assets, the carrying amount of assets is assumed to be recovered through use.
Tax Consolidated Group
The Company is the head entity of the tax consolidated group. For further information, refer note 21.
8. Non-Current Assets – Property, Plant and Equipment
Consolidated
2022
Cost
Accumulated depreciation expense
Net carrying amount
Movement
Net carrying amount at beginning of year
Additions
Disposals
Depreciation expense
Transfers1
Net carrying amount at end of year
Land and
Buildings
$’000
Leasehold
Improvements
$’000
Plant and
Equipment
$’000
Assets under
construction
$’000
25,433
(9,273)
16,160
16,790
101
(67)
(664)
–
16,160
54,331
(36,165)
18,166
256,267
(220,903)
35,364
18,053
2,877
(20)
(4,470)
1,726
18,166
46,881
2,998
(60)
(13,893)
(562)
35,364
14,864
–
14,864
5,475
14,584
–
–
(5,195)
14,864
Total
$’000
350,895
(266,341)
84,554
87,199
20,560
(147)
(19,027)
(4,031)
84,554
1 The transfer of $4,031 million of net intangibles relate to the LiSTNR app, which was transferred from Property, plant and equipment following a review of the
accounting treatment.
Consolidated
2021
Cost
Accumulated depreciation expense
Net carrying amount
Movement
Net carrying amount at beginning of year
Additions
Disposals
Depreciation expense
Transfers
Net carrying amount at end of year
Land and
Buildings
$’000
Leasehold
Improvements
$’000
Plant and
Equipment
$’000
Assets under
construction
$’000
25,410
(8,620)
16,790
19,520
147
(2,288)
(589)
–
16,790
50,605
(32,552)
18,053
23,142
159
(10)
(5,238)
–
18,053
255,800
(208,919)
46,881
49,053
8,338
(887)
(14,463)
4,840
46,881
5,475
–
5,475
5,138
5,177
–
–
(4,840)
5,475
Total
$’000
337,290
(250,091)
87,199
96,853
13,821
(3,185)
(20,290)
–
87,199
64 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
8. Non-Current Assets – Property, Plant and Equipment (continued)
Recognition and Measurement
Property, Plant and Equipment at Cost
Property, plant and equipment is recorded at cost less accumulated depreciation and cumulative impairment charges. Cost includes those
costs directly attributable to bringing the assets into the location and working condition necessary for the asset to be capable of operating
in the manner intended by management. The estimated cost of dismantling and removing infrastructure items and restoring the site on
which the assets are located is only included in the cost of the asset to the extent that the Group has an obligation to restore the site and
the cost of restoration is not recoverable from third parties. Additions, renewals and improvements are capitalised, while maintenance and
repairs are expensed.
The carrying values of property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amounts may not be recoverable. 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.
Depreciation
Land is not depreciated. Depreciation on other assets is calculated on a straight-line basis to amortise the cost of the asset over its
estimated useful life.
Estimates of remaining useful life are made on a regular basis for all assets, with annual reassessments for major items. The expected useful
life of property, plant and equipment is as follows:
Buildings
Leasehold improvements
Network equipment
Communication equipment
3 – 16 years Other plant and equipment
2 – 10 years
3 – 5 years
2 – 20 years
2 – 20 years
Leased plant and equipment
25 – 50 years
9. Non-Current Assets – Intangible Assets
Consolidated
2022
Cost
Accumulated impairment expense
Accumulated amortisation expense
Net carrying amount
Movement
Net carrying amount at beginning of year
Additions
Transfers1
Impairment expense (note 10)
Amortisation expense
Net carrying amount at end of year
Goodwill
$’000
362,088
(362,088)
–
–
9,959
–
–
(9,959)
–
–
Broadcasting
Licences
$’000
Brands and
Tradenames
$’000
1,502,031
(854,478)
–
647,553
871,700
–
–
(224,147)
–
647,553
90,238
(41,662)
–
48,576
65,308
82
–
(16,814)
–
48,576
Other
$’000
12,844
–
(5,177)
7,667
936
5,073
4,031
–
(2,373)
7,667
Total
$’000
1,967,201
(1,258,228)
(5,177)
703,796
947,903
5,155
4,031
(250,920)
(2,373)
703,796
1 The transfer of $4.031 million of net intangibles relate to the LiSTNR app, which was transferred from Property, plant and equipment following a review of the
accounting treatment.
Consolidated
2021
Cost
Accumulated impairment expense
Accumulated amortisation expense
Net carrying amount
Movement
Net carrying amount at beginning of year
Additions
Amortisation expense
Net carrying amount at end of year
Goodwill
$’000
362,088
(352,129)
–
9,959
9,959
–
–
9,959
Broadcasting
Licences
$’000
Brands and
Tradenames
$’000
1,502,031
(630,331)
–
871,700
871,700
–
–
871,700
90,156
(24,848)
–
65,308
65,185
123
–
65,308
Other
$’000
3,577
–
(2,641)
936
1,203
–
(267)
936
Total
$’000
1,957,852
(1,007,308)
(2,641)
947,903
948,047
123
(267)
947,903
2022 Annual Report
Notes to the Consolidated Financial Statements | 65
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
9. Non-Current Assets – Intangible Assets (continued)
Goodwill and intangible assets with indefi nite useful lives
The Group tests at least annually whether goodwill and intangible assets with indefi nite useful lives have suff ered any impairment, and
when there is an indication of impairment. The tests incorporate assumptions regarding future events which may or may not occur, resulting
in the need for future revisions of estimates. There are also judgements involved in determination of cash-generating units (‘CGUs’).
Key Judgement
Useful Life
A summary of the useful lives of intangible assets is as follows:
Commercial Television/Radio Broadcasting Licences
Brands and Tradenames
Indefi nite
Indefi nite
Licences
Television and radio licences are initially recognised at cost. Analogue licences are renewable for a minimal cost every fi ve years under
provisions within the Broadcasting Services Act. Digital licences attach to the analogue licences and renew automatically. The Directors
understand that the revocation of a commercial television or radio licence has never occurred in Australia and have no reason to believe
the licences have a fi nite life. During the year, the free-to-air commercial television and radio broadcasting licences have been assessed
to have indefi nite useful lives.
Brands
Brands are initially recognised at cost. The brands have been assessed to have indefi nite useful lives. The Group’s brands operate in
established markets with limited restrictions and are expected to continue to complement the Group’s media initiatives. On this basis,
the Directors have determined that brands have indefi nite lives as there is no foreseeable limit to the period over which the assets are
expected to generate net cash infl ows.
Other intangible assets
IT development and software
Costs associated with maintaining software programs are recognised as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifi able and unique software products controlled
by the Group are recognised as intangible assets where the following criteria are met:
– it is technically feasible to complete the software so that it will be available for use
– management intends to complete the software and use or sell it
– there is an ability to use or sell the software
– it can be demonstrated how the software will generate probable future economic benefi ts
– adequate technical, fi nancial and other resources to complete the development and to use or sell the software are available; and
– the expenditure attributable to the software during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software include employee and contractor costs.
Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use.
The Group amortises other intangible assets with a limited useful life using the straight-line method over the following periods:
IT development and software
Customer contracts
3 – 5 years
5 years
66 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
10. Impairment
a) Impairment tests for licences, tradenames, brands and goodwill
The value of licences, tradenames, brands and goodwill is allocated to the Group’s cash-generating units (‘CGUs’), identifi ed as being
Audio and Television. As the indefi nite lived intangible assets relating to the Television CGU were fully impaired in the year ended
30 June 2019, and no indicator of impairment has been identifi ed for the remaining assets based on the Television CGU’s performance
for FY2022 relative to its remaining carrying value, no impairment test was performed on the Television CGU at 30 June 2022.
The recoverable amount of the Audio CGU at 30 June 2022 and 30 June 2021 was determined based on the fair value less costs
of disposal (‘FVLCD’) discounted cash fl ow model utilising probability weighted scenarios.
Allocation of goodwill and other intangible assets
Consolidated
2022
Goodwill allocated to CGU
Indefi nite lived intangible assets allocated to CGU
Finite lived intangible assets allocated to CGU
Total goodwill, fi nite and indefi nite lived intangible assets
Consolidated
2021
Goodwill allocated to CGU
Indefi nite lived intangible assets allocated to CGU
Finite lived intangible assets allocated to CGU
Total goodwill, fi nite and indefi nite lived intangible assets
Audio CGU
Audio
CGU
$’000
–
696,129
7,667
703,796
Audio
CGU
$’000
9,959
937,008
936
947,903
Television
CGU
$’000
–
–
–
–
Television
CGU
$’000
–
–
–
–
Total
$’000
–
696,129
7,667
703,796
Total
$’000
9,959
937,008
936
947,903
Impairment
At 30 June 2022, an impairment loss of $250.9 million was recorded against the Goodwill, Broadcasting Licences and Brands and
Tradenames in the Audio CGU, refl ecting a recoverable amount of $511.9 million. The carrying values of the other assets in the Audio CGU
were considered equal to their fair value. After the impairment loss, the estimated recoverable amount of the Audio CGU, based on FVLCD,
equals its carrying amount. The impairment refl ects an increase in the discount rate; slower than expected recovery from the economic
impacts of the COVID pandemic; independent estimates of radio broadcast growth rates showing declines over the forecast period; and
a more pessimistic weighting towards the Lower Case due to increased potential for worsening economic conditions.
b) Key assumptions used
30 June 2022
The FVLCD calculations used cash fl ow projections based on the 2023 Board approved fi nancial budgets extended over the subsequent
four-year period (‘Forecast Period’) and applied a terminal value calculation using estimated growth rates approved by the Board for the
business relevant to the Audio CGU. In determining appropriate growth rates to apply to the Forecast Period and to the terminal calculation,
the Group considered forecast reports from independent media experts and publicly available broker reports as well as internal Company
data and assumptions. In respect of the Audio CGU the long-term growth rates did not exceed the independent forecast reports. The
discount rate used is based on a range provided by an independent expert and refl ects specifi c risks relating to the Audio CGU in Australia.
The Group considered three scenarios: the Base case; Lower case; and Upper case and applied a probability weighting to each scenario as
outlined below to determine a recoverable amount. The key assumptions under each scenario are as follows:
Extent and duration of audio
market recovery
Long-term growth rate
Discount rate (post-tax)
Growth in digital audio revenues –
5-year CAGR
Metro market share – Year 5
Probability weighting
Lower case
Base case
Upper case
To 82% of CPI adjusted
FY19 revenue base in FY24
declining to 76% by FY27
To 83% of CPI adjusted
FY19 revenue base in FY24
declining to 80% by FY27
To 90% of CPI adjusted
FY19 revenue base by
FY24 and fl at thereafter
0.5%
9.75%
17%
26%
1.5%
9.75%
29%
29%
2.5%
9.75%
41%
30%
40% – lower case
considered more likely
than upper case due to
potential for worsening
economic conditions
50% – base case considered
most likely outcome
10% – upper case
considered less likely
than lower case due to
potential for worsening
economic conditions
2022 Annual Report
Notes to the Consolidated Financial Statements | 67
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
10. Impairment (continued)
The market capitalisation of the Group at 30 June 2022 was $258 million, which represented a $202 million defi ciency against the net
assets of $460 million. The Group considered reasons for this diff erence and concluded the recoverable amount resulting from the FVLCD
methodology is appropriate in supporting the carrying value of the Audio CGU.
30 June 2021
The FVLCD calculations used cash fl ow projections based on the 2022 Board approved fi nancial budgets extended over the subsequent
four-year period (‘Forecast Period’) and applied a terminal value calculation using estimated growth rates approved by the Board for the
business relevant to the Audio CGU. In determining appropriate growth rates to apply to the Forecast Period and to the terminal calculation,
the Group considered forecast reports from independent media experts and publicly available broker reports as well as internal company
data and assumptions. In respect of the Audio CGU the market growth rates did not exceed the independent forecast reports. The discount
rate used is based on a range provided by an independent expert and refl ects specifi c risks relating to the Audio CGU in Australia.
The Group considered three scenarios: the Base case; Lower case; and Upper case and applied a probability weighing to each scenario as
outlined below to determine a recoverable amount. The key assumptions under each scenario are as follows:
Extent and duration of audio
market recovery
Long-term growth rate
Discount rate (post-tax)
Growth in digital audio revenues –
5-year CAGR
Metro market share – Year 5
Probability weighting
Lower case
Base case
Upper case
To 80% of CPI adjusted
FY19 revenue base by FY25
To 85% of CPI adjusted
FY19 revenue base by FY24
To 90% of CPI adjusted
FY19 revenue base by FY23
(0.5)%
8.5%
23%
27%
1.0%
8.5%
41%
29%
2.0%
8.5%
58%
30%
10% – lower case considered
equally as likely as
upper case
80% – base case considered
most likely outcome
10% – upper case considered
equally as likely as
lower case
c) Impact of a reasonably possible change in key assumptions
Audio CGU
Sensitivity
Any variation in the key assumptions used to determine the FVLCD would result in a change in the recoverable amount of the Audio CGU.
The assumptions in the lower case scenario for 30 June 2022 described above represent a reasonably possible change in assumptions,
which together would lead to a further pre-tax impairment of $357 million. The following reasonably possible changes in a key assumption
would result in the following approximate impact on recoverable amount (as derived on a probability weighted basis) and carrying value
for the Audio CGU:
Sensitivity
Increase in post-tax discount rate from 9.75% to 10.5%
Reduction in long-term growth rate by 1.0% in each scenario
Reasonable
Change in
variable
%
0.75%
(1.0)%
Impact of
change on
Audio CGU
carrying value
$ million
(42)
(42)
68 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
11. Cash fl ow information
a) Reconciliation of Profi t after Income Tax to Net Cash Infl ow from Operating Activities
(Loss)/profi t after income tax
Impairment of intangibles and investments
Depreciation and amortisation
Net gain from disposal of assets
Share of associate profi t
Interest expense and other borrowing costs included in fi nancing activities
Share-based payments
Change in operating assets and liabilities:
(Increase) in receivables
(Decrease) in deferred taxes (net of tax movement in hedge reserve)
Increase/(decrease) in payables (excluding interest expense classifi ed as fi nancing activities)
(Decrease) in deferred income
Increase/(decrease) in provision for income tax
Increase in provisions
Net cash infl ows from operating activities
b) Net debt reconciliation
Cash and liquid investments
Borrowings – repayable within one year
Borrowings – repayable after one year
Lease liabilities
Net debt
Consolidated
2022
$’000
(153,722)
251,718
31,851
(16)
(761)
16,219
532
(1,687)
(72,662)
(3,824)
(7,777)
(8,465)
2,804
54,210
2021
$’000
48,096
–
32,770
(510)
(706)
23,201
228
(14,876)
(3,718)
25,380
(8,732)
10,956
4,071
116,160
Consolidated
2022
$’000
49,462
–
(126,943)
(126,819)
(204,300)
2021
$’000
75,420
–
(127,225)
(112,969)
(164,774)
2022 Annual Report
Notes to the Consolidated Financial Statements | 69
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
11. Cash fl ow information (continued)
b) Net debt reconciliation (continued)
Balance as at 1 July 2020
Repayment of borrowings
Other cash fl ows
Payment for leases
Changes from fi nancing activities
Other Changes
Finance costs
Amortisation of borrowing costs
Addition of leases
Options not exercised
Other remeasurements
Subtotal of other changes
Balance as at 30 June 2021
Payment for leases
Other cash fl ows
Changes from fi nancing activities
Other Changes
Finance costs
Amortisation of borrowing costs
Addition of leases
Other remeasurements
Subtotal of other changes
Balance as at 30 June 2022
c) Cash and cash equivalents
Current
Cash at bank and at hand
Consolidated
Cash
$’000
271,431
(275,000)
78,989
–
75,420
–
–
–
–
–
–
Bank
Loans
$’000
(401,703)
275,000
–
–
(126,703)
–
(522)
–
–
–
(522)
75,420
–
(25,958)
49,462
(127,225)
–
–
(127,225)
–
–
–
–
1,235
(953)
–
–
–
49,462
282
(126,943)
Lease
Liabilities
$’000
(132,951)
–
–
13,353
(119,598)
(6,874)
–
(2,130)
16,034
(401)
6,629
(112,969)
14,256
–
(98,713)
(6,271)
–
(21,646)
(189)
(28,106)
(126,819)
Total
$’000
(263,223)
–
78,989
13,353
(170,881)
(6,874)
(522)
(2,130)
16,034
(401)
6,107
(164,774)
14,256
(25,958)
(176,476)
(5,036)
(953)
(21,646)
(189)
(27,824)
(204,300)
Consolidated
2022
$’000
49,462
49,462
2021
$’000
75,420
75,420
Recognition and measurement
For the purpose of presentation in the statement of cash fl ows, cash and cash equivalents includes cash on hand, deposits held at call with
fi nancial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignifi cant risk of changes in value, and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities in the balance sheet.
70 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
Consolidated
2022
$’000
88,458
10,974
1,515
100,947
2021
$’000
85,744
9,813
3,130
98,687
Consolidated
2022
$’000
334
11,468
130
11,932
2021
$’000
292
12,495
187
12,974
Total
$’000
89,896
(1,438)
88,458
Total
$’000
87,310
(1,566)
85,744
12. Receivables, Payables, Deferred Income and Provisions
a) Receivables
Current
Trade receivables
Prepayments
Other
Non-current
Refundable deposits
Prepayments
Other
The carrying amounts of the non-current receivables approximate their fair value.
Ageing analysis of trade receivables
The tables below summarise the ageing analysis of trade receivables as at 30 June.
Consolidated
As at 30 June 2022
Expected loss rate
Trade receivables
Expected credit losses (‘ECL’)
Trade receivables net of ECL
Consolidated
As at 30 June 2021
Expected loss rate
Trade receivables
Expected credit losses (‘ECL’)
Trade receivables net of ECL
Current –
not past due
$’000
Past due –
up to 60 days
$’000
Past due –
60 to 90 days
$’000
Past due –
>90 days
$’000
1.1%
83,626
(921)
82,705
2.2%
4,691
(103)
4,588
21.0%
991
(208)
783
35.0%
588
(206)
382
Current –
not past due
$’000
Past due –
up to 60 days
$’000
Past due –
60 to 90 days
$’000
Past due –
>90 days
$’000
0.9%
79,898
(731)
79,167
3.0%
5,704
(171)
5,533
30.0%
950
(285)
665
50.0%
758
(379)
379
The Group has recognised bad debts during the year ended 30 June 2022 of $140,536 (2021: $153,095). The Group applies a simplifi ed
model of recognising lifetime expected credit losses immediately upon recognition. The expected loss rates are historically based on the
payment profi le of sales over a period of three years before the end of the current period. Historical loss rates have been adjusted to refl ect
current and forward-looking information on macroeconomic factors aff ecting the ability of customers to settle the receivables. The amount
of the loss allowance is recognised in profi t or loss. Where a debt is known to be uncollectible, it is considered a bad debt and written off .
Collections have held up throughout FY22, with very few delinquent debts, therefore SCA has decreased the weightings of expected
losses on debts over 30 days. However, due to recent economic uncertainly SCA has increased the current – not past due weighting from
0.9% to 1.1.%. Overall, SCA has reduced the ECL provision to $1.438 million (2021: $1.566 million).
2022 Annual Report
Notes to the Consolidated Financial Statements | 71
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
12. Receivables, Payables, Deferred Income and Provisions (continued)
Recognition and Measurement
Trade Receivables
Trade receivables are recognised at fair value, being the original invoice amount and subsequently measured at amortised cost less
ECL provision. Generally, credit terms are for 30 days from date of invoice or 45 days for an accredited agency.
b) Prepayments
On 2 September 2019, the Group paid $15 million to Broadcast Australia for the outsourcing of the Group’s transmission services which
is being recognised as an expense over a 15-year period.
Current
Broadcast Australia transmitter services
Other
Non-current
Broadcast Australia transmitter services
c) Payables
Current
Trade creditors
GST payable
Accruals and other payables
Recognition and Measurement
2022
$’000
1,027
9,947
10,974
11,468
11,468
2021
$’000
1,027
8,786
9,813
12,495
12,495
Consolidated
2022
$’000
9,938
2,658
36,334
48,930
2021
$’000
10,780
2,107
43,997
56,884
Trade Creditors, Accruals and Other Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the fi nancial year and which are
unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
d) Deferred income
Current
Deferred income
Non-current
Deferred income
Consolidated
2022
$’000
6,742
6,742
2021
$’000
7,306
7,306
Consolidated
2022
$’000
88,260
88,260
2021
$’000
90,142
90,142
72 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
12. Receivables, Payables, Deferred Income and Provisions (continued)
Recognition and Measurement
Deferred Income
In 2016, the Group entered into a long-term contract with Australian Traffi c Network (ATN) for it to provide traffi c reports for broadcast
on Southern Cross Austereo (SCA) radio stations. SCA received payment of $100 million from ATN in return for its stations broadcasting
advertising tags provided by ATN attached to news and traffi c reports. The contract has a term of 20 years, with an option for ATN to
extend it by a further 10 years. The $100 million payment has been recorded on the balance sheet under ‘Deferred Income’ and will be
released to the Income Statement over a 30-year period, unless the contract ends after 20 years at which point the remaining balance will
be recognised as revenue in year 20. This treatment will match the receipt of future broadcasting services, airtime and traffi c management
services that the Group is required to provide over the life of the contract.
ATN revenue recognised that was included in the deferred income balance at the beginning of the period was $7.1 million. The ATN revenue
recognised of $7.1 million (2021: $7.1 million) has been off set by the recognition of $5.4 million (2021: $5.4 million) in interest expense as the
unwind of discounting.
In addition to the payment received from ATN, deferred income represents government grants received and income invoiced in advance.
Government grants relating to costs are deferred and recognised in profi t or loss over the period necessary to match them with the costs
that they are intended to compensate. Government grants relating to the purchase of property, plant and equipment are deferred and
recognised in profi t or loss on a straight-line basis over the expected useful lives of the related assets.
e) Provisions
Current
Employee benefi ts
Lease provisions
Non-current
Employee benefi ts
Lease provisions
Movements in current and non-current provisions, other than provisions for employee benefi ts, are set out below:
Balance at the beginning of the fi nancial year
Additional provisions made in the period, including increases to existing provisions
Unused amounts reversed during the period
Balance at the end of the fi nancial year
Consolidated
2022
$’000
19,930
690
20,620
2021
$’000
17,125
–
17,125
Consolidated
2022
$’000
3,010
1,844
4,854
2021
$’000
2,715
2,831
5,546
Consolidated
2022
$’000
2,831
–
(297)
2,534
2021
$’000
2,047
805
(21)
2,831
Recognition and Measurement
Provisions
A provision is recognised when there is a legal, equitable or constructive obligation as a result of a past event and it is probable that a future
sacrifi ce of economic benefi ts will be required to settle the obligation, the timing or amount of which is uncertain.
Where there are a number of similar obligations, the likelihood that an outfl ow will be required in settlement is determined by considering
the class of obligations as a whole. A provision is recognised even if the likelihood of an outfl ow with respect to any one item included in the
same class of obligations may be small.
2022 Annual Report
Notes to the Consolidated Financial Statements | 73
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
12. Receivables, Payables, Deferred Income and Provisions (continued)
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation
at the balance sheet date. The discount rate used to determine the present value refl ects current market estimates of the time value of
money and the risks specifi c to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
Wages and salaries, leave and other entitlements
Liabilities for unpaid salaries, salary related costs and provisions for annual leave are recorded in the Consolidated Statement of Financial
Position at the salary rates which are expected to be paid when the liability is settled. Provisions for long service leave and other long-term
benefi ts are recognised at the present value of expected future payments to be made. In determining this amount, consideration is given
to expected future salary levels and employee service histories. Expected future payments are discounted to their net present value using
high quality corporate bond rates with terms that match as closely as possible to the expected future cash fl ows.
Onerous Contracts
A provision for onerous contracts is recognised when the expected benefi ts to be derived by the Group from a contract are lower than
the unavoidable costs of meeting the obligation under the contract. The provision is measured at the lower of the cost of fulfi lling the
contract and any compensation or penalties arising from the failure to fulfi l it.
Lease Provisions
The provision comprises of the makegood provisions 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 asset 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 fl ows and the timing
of those cash fl ows.
Capital Management
13. Capital Management Objectives
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so that it can continue
to provide appropriate returns for shareholders and benefi ts for other stakeholders and to maintain an optimal capital structure to reduce
the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, maintain a fully
underwritten dividend reinvestment plan, return capital to shareholders, issue new shares, buy back existing shares or sell assets to
reduce debt. The Group has taken measures to reduce net debt and leverage is now below 1.0 times. The following outlines the capital
management policies that are currently in place for the Group:
Dividend Policy
Dividend Payout Ratio
The Group has a policy to distribute between 65-85% of underlying fi nancial year Net Profi t After Tax.
Dividend Reinvestment Plan (‘DRP’)
The Group operates a DRP whereby shareholders can elect to receive their dividends by way of receiving shares in the Company instead
of cash. The Company can elect to either issue new shares, or to buy shares on-market. The DRP has been suspended since the 2016
interim dividend.
Further details on the Group’s dividends are outlined in note 14.
Share buy-back
On 24 March 2022 the Group announced its intention to conduct an on-market share buy-back of up to $40 million over the 12-month
period from 8 April 2022 to 7 April 2023. As of 30 June 2022, the Group had bought back 3,366,234 shares for $5.5 million.
Debt Facilities
Syndicated Debt Facility
During the year, the Group successfully renegotiated its Syndicated Facility Agreement (‘SFA’), which was used to repay the existing
drawn debt of $128 million on 10 January 2022. At 30 June 2022 the Group had a $250 million (2021: $250 million) revolving four year
(2021: three year) facility expiring on 9 January 2026. This facility is used as core debt for the Group and may be paid down and redrawn
in accordance with the SFA.
Covenants
For the duration of the SFA the Banking Group, being Southern Cross Austereo Pty Ltd and its subsidiaries, has a maximum
leverage ratio covenant of 3.5 times and a minimum interest cover ratio of 3.0 times. In response to the adverse business impacts
of COVID-19, an amendment was agreed with the syndicate to increase the maximum leverage ratio covenant to 4.5 times for the
periods from 30 June 2020 through to 30 June 2021, however the covenant subsequently reverted to 3.5 times. As at 30 June 2022,
the leverage ratio was 0.95 times, and the interest cover ratio was 23.45 times.
Further details on the Group’s debt facilities are outlined in note 17.
Property, Plant and Equipment and Intangibles
The capital expenditure for 2022 was $20.6 million (2021: $13.8 million).
Further details on the Group’s fi xed assets are outlined in note 8.
74 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
14. Dividends Paid and Proposed
The dividends were paid as follows:
Interim dividend paid for the half year ended 31 December 2021/2020
– fully franked at the tax rate of 30%
Final dividend paid for the year ended 30 June 2021/2020
– fully franked at the tax rate of 30%
Dividends paid in cash or satisfi ed by the issue of shares under
the dividend reinvestment plan were as follows:
Paid in cash
Interim dividend paid for the half year ended 31 December 2021/2020
Final dividend paid for the year ended 30 June 2021/2020
Consolidated
2022
$’000
2021
$’000
11,890
13,210
25,100
25,100
25,100
–
–
–
–
–
Cents
per share
Cents
per share
4.50
5.00
9.50
–
–
–
The Group has $180.1 million of franking credits at 30 June 2022 (2021: $170.5 million).
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Company,
on or before the end of the fi nancial year but not distributed at the end of the reporting period.
Since the end of the fi nancial year the Directors have declared the payment of a fi nal 2022 ordinary dividend of $12.35 million
(4.75 cents per fully paid share) out of ‘Retained Profi ts – 2019 reserve’. This dividend will be paid on 4 October 2022.
15. Earnings per Share
Continuing Operations
Profi t attributable to shareholders from continuing operations ($’000)
Profi t attributable to shareholders from continuing operations excluding signifi cant items ($’000)
Weighted average number of shares used as the denominator in calculating basic earnings per share
(shares, ’000)
Weighted average number of ordinary shares and potential ordinary shares used as the denominator
in calculating diluted earnings per share (shares, ’000)
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Excluding signifi cant items (refer note 4)
Basic earnings per share excluding signifi cant items (cents per share)
Diluted earnings per share excluding signifi cant items (cents per share)
Dividends paid/proposed for the year as a % of NPAT
Consolidated
2022
$’000
(153,722)
28,554
2021
$’000
48,096
48,096
263,681
264,214
265,200
(58.3)
(58.3)
10.82
10.77
85.0%
264,922
18.20
18.15
18.20
18.15
27.5%
During the prior year the Group announced completion of the one for 10 share consolidation which was approved by shareholders at the
AGM on 30 October 2020.
On 24 March 2022 the Group announced its intention to conduct an on-market share buy-back of up to $40 million over the 12-month
period from 8 April 2022 to 7 April 2023. As of 30 June 2022, the Group had bought back 3,366,234 shares for $5.5 million.
Recognition and Measurement
Basic earnings per share
Basic earnings per share is calculated by dividing the profi t or loss attributable to equity holders of the Company, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of shares outstanding during the fi nancial year.
Diluted earnings per share
Diluted earnings per share adjusts the fi gures used in the determination of basic earnings per share to take into account the after income
tax eff ect of interest and other fi nancing costs associated with dilutive potential shares and the weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential shares.
2022 Annual Report
Notes to the Consolidated Financial Statements | 75
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
16. Contributed Equity and Reserves
Ordinary shares
Contributed equity
On issue at the beginning of the fi nancial year
Share Issue – Institutional
Share Issue – Retail
Buy-back of ordinary shares
One for 10 share consolidation
Contributions of equity, net of transaction costs
On issue at the end of the fi nancial year
Consolidated
2022
$’000
2021
$’000
1,537,404
1,537,404
1,542,884
1,542,884
Consolidated
Consolidated
2022
$’000
1,542,884
–
–
(5,480)
–
–
1,537,404
2021
$’000
1,540,569
–
–
–
–
2,315
1,542,884
2022
Number of
securities
’000
264,214
–
–
(3,366)
–
–
260,848
2021
Number of
securities
’000
2,642,106
–
–
–
(2,377,892)
–
264,214
During the prior year the Group announced completion of the one for 10 share consolidation which was approved by shareholders
at the AGM on 30 October 2020.
On 24 March 2022, the Group announced its intention to conduct an on-market share buy-back of up to $40 million. For the period to
30 June, the Group purchased $5.5 million in shares. This was funded from existing cash reserves. The on-market share buy-back will
continue into FY23 and will be funded by existing cash reserves and debt facilities.
Ordinary shares in Southern Cross Media Group Limited
Ordinary shares entitle the holder to participate in distributions 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, each shareholder present in person and each other person present as a proxy has one vote and upon a poll,
each share is entitled to one vote.
Ordinary shares have no par value, and the Company does not have a limited amount of authorised capital.
Employee share entitlements
The Group operates an LTI plan for its senior executives. Information relating to the employee share entitlements, including details of shares
issued under the scheme, is set out in the Remuneration Report.
Nature and purpose of reserves
a) Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of future potential shares to be issued to employees for no
consideration in respect of performance rights off ered under the Long-term Incentive Plan. During the year no performance rights vested
(2021: nil). In the current year $532,887 has been recognised as an expense (2021: $228,186 expense) in the Consolidated Statement of
Comprehensive Income as the fair value of potential shares to be issued.
b) Hedge reserve
The hedge reserve is used to record gains or losses on a hedging instrument in a cash fl ow hedge that are recognised in Other
comprehensive income. Amounts are reclassifi ed to the Statement of Comprehensive Income when the associated hedged transaction
aff ects profi t or loss.
c) Reverse Acquisition Reserve
As described in note 1, the Group transferred the reverse acquisition reserve of $77.406 million in connection with the IPO of the Group,
into Accumulated losses eff ective 30 June 2022.
76 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
17. Borrowings
a) Total interest-bearing liabilities
Non-current secured borrowings
Bank facilities
Borrowing costs
Total secured non-current interest bearing liabilities
Total current and non-current borrowings
Consolidated
2022
$’000
2021
$’000
128,000
(1,057)
126,943
126,943
128,000
(775)
127,225
127,225
For all non-current borrowings, the carrying amount approximates fair value in the Consolidated Statement of Financial Position.
Of the $1.057 million of borrowing costs, $0.300 million (2021: $0.508 million) will unwind during the year ending 30 June 2023.
There are no current liabilities as at 30 June 2022.
b) Interest expense
Interest expense and other borrowing costs
External banks
Termination of swaps
AASB 15 – Revenue from customers with contracts interest expense
AASB 16 – Lease interest expense
Amortisation of borrowing costs
Total interest expense and other borrowing costs
Consolidated
2022
$’000
3,664
–
5,331
6,271
953
16,219
2021
$’000
9,199
1,177
5,429
6,874
522
23,201
c) Bank facilities and assets pledged as security
The $250 million debt facilities (2021: $250 million) of the Banking Group are secured by a fi xed and fl oating charge over the assets and
undertakings of the Banking Group and its wholly-owned subsidiaries and also by a mortgage over shares in Southern Cross Austereo
Pty Ltd. The facility matures on 9 January 2026 and has an average variable interest rate of 3.31% (2021: 1.28%). The facility is denominated
in Australian dollars.
There are certain fi nancial and non-fi nancial covenants which are required to be met by subsidiaries in the Group. One of these covenants
is an undertaking that the subsidiary is in compliance with the requirements of the facility before any amount may be distributed to the
benefi t of the ultimate parent entity, Southern Cross Media Group Limited. Covenant testing dates fall at 30 June and 31 December each
year until the facility maturity date. At 30 June 2022, the Group complied with all the covenants.
The carrying amounts of assets pledged as security by Southern Cross Austereo Pty Ltd for current and non-current borrowings are:
Current assets
Floating charge
Cash and cash equivalents
Receivables
Total current assets pledged as security
Non-current assets
Floating charge
Receivables
Investments accounted for using the equity method
Property, plant and equipment
Intangible assets
Total non-current assets pledged as security
Total assets pledged as security
Consolidated
2022
$’000
2021
$’000
49,352
99,175
148,527
75,311
95,577
170,888
11,932
5,107
84,554
708,984
810,577
959,104
12,974
4,271
87,199
947,903
1,052,347
1,223,235
2022 Annual Report
Notes to the Consolidated Financial Statements | 77
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
17. Borrowings (continued)
c) Bank facilities and assets pledged as security (continued)
Recognition and Measurement
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Transaction costs that have been paid or accrued for prior
to the drawdown of debt are classifi ed as prepayments. Borrowings are subsequently measured at amortised cost. Any diff erence between
the proceeds (net of transaction costs) and the redemption amount is recognised in profi t or loss over the period of the borrowings using
the eff ective interest method. Borrowings are classifi ed as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the balance sheet date.
Borrowing costs
Borrowing costs are expensed over the life of the facility to which they relate.
18. Financial Risk Management
The Group’s activities expose it to a variety of fi nancial risks: market risk (the Group’s main exposure to market risk is interest rate risk),
liquidity risk and cash fl ow interest rate risk). The Group’s overall risk management program focuses on the unpredictability of fi nancial
markets and seeks to minimise potential adverse eff ects on the fi nancial performance of the Group. The Group uses derivative fi nancial
instruments such as interest rate swaps to hedge certain risk exposures.
The Risk Management Policy is carried out by management under policies approved by the Board. Senior management of the Group
identify, quantify and qualify fi nancial risks as part of developing and implementing the risk management process. The Risk Management
Policy is a written document approved by the Board that outlines the fi nancial risk management process to be adopted by management.
Specifi c fi nancial risks that have been identifi ed by the Group are interest rate risk and liquidity risk.
a) Interest rate risk
Nature of interest rate risk
Interest rate risk is the Group’s exposure to the risk that interest rates move in a way that adversely aff ects the ability of the Group to pay
its interest rate commitments. The Group’s interest rate risk arises from long-term borrowings which are taken out at variable interest rates
and therefore expose the Group to a cash fl ow risk.
Interest rate risk management
Whilst there is no formal policy in place mandating hedging levels, it is considered by the Board regularly and SCA has historically hedged
the interest rate risk by taking out fl oating to fi xed rate swaps on the majority of its drawn debt. Such interest rate swaps have the economic
eff ect of converting borrowings from variable rates to fi xed rates. Generally, the Group raises long-term borrowings at variable rates and
swaps them into fi xed rates that are lower than those available if the Group borrowed at fi xed rates directly. Under the interest rate swaps,
the Group agrees with other parties to exchange, at specifi ed intervals (quarterly), the diff erence between fi xed contract rates and variable
rate interest amounts calculated by reference to the agreed notional principal amounts.
Exposure and sensitivity to interest rate risk
External borrowings of the Group currently bear an average variable interest rate of 3.31% (2021: 1.29%). In 2017 the Group entered into
$200 million of interest rate swap contracts under which it is obliged to receive interest at variable rates and pay interest at fi xed rates
starting in January 2018 at an average fi xed rate of 2.43%. These interest rate swap contracts expired in January 2021. In 2018 the Group
entered into $100 million of interest rate swap contracts under which it is obliged to receive interest at variable rates and pay interest at
fi xed rates starting in January 2018 at an average fi xed rate of 2.25%. On 8 April 2021, the Group terminated $72 million of these swaps
at a cost of $1.178 million. The remaining $28 million interest rate swap contracts expired in January 2022. In 2020 the Group entered into
$100 million of interest rate swap contracts under which it is obliged to receive interest at variable rates and pay interest at fi xed rates
starting in January 2021 at an average fi xed rate of 1.04%. These interest rate swap contracts will expire in January 2023.
Details on how the Group accounts for the interest rate swap contracts as cash fl ow hedges is disclosed in note 27.
Derivative fi nancial instruments
Interest rate swap contracts – current asset
Interest rate swap contracts – current liability
Interest rate swap contracts – non-current liability
Total derivative fi nancial instruments
Consolidated
2022
$’000
787
–
–
787
2021
$’000
–
(319)
(1,262)
(1,581)
Swaps currently in place cover 78% (2021 – 100%) of the variable loan principal outstanding. The fi xed interest rates of the swaps is
1.0% (2021 – range between 1.0% and 2.3%) and the variable rates on the loans are 1.30% (2021 – 1.20%) above the three months bank bill
rate, which at the end of the reporting period was 2.0% (2021 – 0.1%).
The swap contracts require settlement of net interest receivable or payable every three months. The settlement dates coincide with the
dates on which interest is payable on the underlying debt.
78 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
18. Financial Risk Management (continued)
a) Interest rate risk (continued)
Eff ects of hedge accounting on the fi nancial position and performance
The eff ects of the interest rate swaps on the Group’s fi nancial position and performance are as follows:
Carrying amount asset/(liability)
Notional
Maturity date
2022
2023
Hedge ratio
Change in fair value of outstanding hedging instruments since 1 July
Change in value of hedged item used to determine hedge eff ectiveness
Weighted average hedged rate for the year
Consolidated
2022
$’000
787
100,000
–
100,000
1:1
1,168
(1,168)
1.20%
2021
$’000
(1,581)
128,000
28,000
100,000
1:1
(311)
311
2.09%
Hedging reserve
The Group’s hedging reserve disclosed in the Statement of Changes in Equity relates to the following hedging instruments:
Opening balance 1 July 2020
Add: Change in fair value of hedging instrument recognised in OCI for the year
Less: reclassifi ed from OCI to profi t or loss
Less: Deferred tax
Closing balance 30 June 2021
Add: Change in fair value of hedging instrument recognised in OCI for the year
Less: reclassifi ed from OCI to profi t or loss
Less: Deferred tax
Closing balance 30 June 2022
Hedge Reserve for
Interest rate swaps
$’000
(4,886)
(311)
5,713
(1,621)
(1,105)
1,168
1,200
(710)
553
Interest rate swap contracts
The contracts require settlement of net interest receivable or payable and are timed to coincide with the approximate dates on which
interest is payable on the underlying debt.
These interest rate swaps are cash fl ow hedges as they satisfy the requirements for hedge accounting. Any change in fair value of the
interest rate swaps is taken to the hedge reserve in equity.
In assessing interest rate risk, management has assumed a +/- 25 basis points movement (2021: +/- 25 basis points) in the relevant interest
rates at 30 June 2022 for fi nancial assets and liabilities denominated in Australian Dollars (‘AUD’). The following table illustrates the impact
on profi t or loss with no impact directly on equity for the Group.
Consolidated
AUD exposures
2022
Cash at bank
Interest rate swaps
Borrowings
2021
Cash at bank
Interest rate swaps
Borrowings
Carrying
Value
$’000
49,462
787
(128,000)
75,420
(1,581)
(128,000)
Impact on post–tax profi ts
Increase/(decrease)
+/– 25 basis points
Impact on reserves
Increase/(decrease)
+/– 25 basis points
$’000
$’000
$’000
$’000
+25
87
92
(224)
+25
132
201
(224)
–25
(87)
(92)
224
–25
(132)
(201)
224
+25
–
125
–
+25
–
414
–
–25
–
(125)
–
–25
–
(416)
–
2022 Annual Report
Notes to the Consolidated Financial Statements | 79
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
18. Financial Risk Management (continued)
b) Liquidity risk
Nature of liquidity risk
Liquidity risk is the risk of an entity encountering diffi culty in meeting obligations associated with fi nancial liabilities.
Liquidity risk management
Prudent liquidity risk management implies maintaining suffi cient cash, the availability of funding through an adequate amount of committed
credit facilities and the ability to close out market positions. The Group and Company have a liquidity management policy which manages
liquidity risk by monitoring the stability of funding, surplus cash or near cash assets, anticipated cash in and outfl ows and exposure to
connected parties.
Exposure and sensitivity
Financing arrangements
Unrestricted access was available at balance date to the following lines of credit:
Consolidated
As at 30 June 2022
Line of credit value
Used at balance date
Unused at balance date
Consolidated
As at 30 June 2021
Line of credit value
Used at balance date
Unused at balance date
Bank
facilities
$’000
Working
capital facility
$’000
250,000
(128,000)
122,000
7,000
(6,109)
891
Bank
facilities
$’000
Working
capital facility
$’000
250,000
(128,000)
122,000
7,000
(6,088)
912
Total
facilities
$’000
257,000
(134,109)
122,891
Total
facilities
$’000
257,000
(134,088)
122,912
The $250 million debt facility for the Group matures on 9 January 2026. The Group’s bank facilities are denominated in Australian dollars
as at 30 June 2022 and 30 June 2021.
Undiscounted future cash fl ows
The tables below summarise the maturity profi le of the fi nancial liabilities as at 30 June based on contractual undiscounted repayment
obligations. Repayments which are subject to notice are treated as if notice were given immediately.
Consolidated
As at 30 June 2022
Borrowings – Principal
Interest cash fl ows1
Payables3
Lease liabilities
Total
Consolidated
As at 30 June 2021
Borrowings – Principal
Interest cash fl ows1
Derivative
fi nancial instruments2
Payables3
Lease liabilities
Total
Less than
1 year
$’000
–
3,312
45,473
12,143
60,928
Less than
1 year
$’000
–
3,689
456
53,897
13,873
71,915
–
4,519
–
11,933
16,452
1-2 years
$’000
128,000
1,686
1,478
–
11,297
142,461
Greater than
5 years
$’000
Total
contractual
cash fl ows
$’000
1-2 years
$’000
2-3 years
$’000
3-5 years
$’000
128,000
2,371
–
23,136
153,507
–
4,507
–
11,042
15,549
–
–
–
125,004
125,004
2-3 years
$’000
3-5 years
$’000
Greater than
5 years
$’000
–
–
–
–
10,718
10,718
–
–
–
–
20,717
20,717
–
–
–
–
110,981
110,981
Carrying
amount
liabilities
$’000
128,000
N/A
48,930
126,819
303,749
Carrying
amount
liabilities
$’000
128,000
N/A
1,581
56,884
112,969
299,434
128,000
14,709
45,473
183,258
371,440
Total
contractual
cash fl ow
$’000
128,000
5,375
1,934
53,897
167,586
356,792
1 Calculated using a weighted average variable interest rate. Interest cash fl ows includes interest on principal borrowings, swap interest and the commitment fee
on the Syndicated Facility Agreement.
2 The fair value of fi nancial instruments that are not traded in an active market is determined using valuation techniques. The Group uses a variety of methods
and makes assumptions that are based on market conditions existing at the end of each reporting period. The fair value of interest rate swaps are calculated
as the present value of the estimated future cash fl ows and are included in level 2 under derivative fi nancial instruments. The total fair value of derivatives used
for hedging is an asset of $0.787 million (2021: $1.581 million liability).
3 The payables balance excludes interest payable as the cash fl ows are included in ‘Interest cash fl ows’ above and excludes GST payable as this is not
a fi nancial liability.
80 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
Group Structure
19. Non-Current Assets – Investments
a) Investments accounted for using the Equity Method
Carrying amount at the beginning of the fi nancial year
Share of profi t after income tax
Dividends
Total Investments accounted for using the Equity Method
b) Financial assets at fair value through profi t or loss
Carrying amount at the beginning of the fi nancial year
Acquisition of unlisted equity securities
Impairment of unlisted equity securities
Total Financial assets at fair value through profi t or loss
Total Investments
Consolidated
2022
$’000
5,091
761
(640)
5,212
2021
$’000
4,945
706
(560)
5,091
Consolidated
2022
$’000
878
1,173
(798)
1,253
6,465
2021
$’000
378
500
–
878
5,969
20. Subsidiaries
The consolidated fi nancial statements incorporate the assets, liabilities and results of the following subsidiaries:
Name of entity
SCM No 1 Pty Limited (SCM1)
Southern Cross Media Australia Holdings Pty Limited (SCMAHL)
Southern Cross Media Group Investments Pty Ltd (SCMGI)
Southern Cross Austereo Pty Limited (SCAPL) and controlled entities
Country of
incorporation
Class of
shares/units
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Eff ective
ownership
interest
2022
Eff ective
ownership
interest
2021
100%
100%
100%
100%
100%
100%
100%
100%
The proportion of ownership interest is equal to the proportion of voting power held unless otherwise indicated.
Recognition and Measurement
Subsidiaries
Subsidiaries are those entities over which the Group has the power to govern the fi nancial and operating policies, generally accompanying
a shareholding of more than one-half of voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to
the Group. The existence and eff ect of potential voting rights that are currently exercisable or convertible are considered when assessing
whether the Group controls another entity.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. Where control of an entity is
obtained during a fi nancial year, its results are included in the Consolidated Statement of Comprehensive Income from the date on which
control commences. Where control of an entity ceases during a fi nancial year, its results are included for that part of the year during
which control existed.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated Statement of Comprehensive
Income and Statement of Financial Position respectively.
2022 Annual Report
Notes to the Consolidated Financial Statements | 81
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
21. Parent Entity Financial Information
a) Summary fi nancial information
The following aggregate amounts are disclosed in respect of the parent entity, Southern Cross Media Group Limited:
Statement of Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Reserves
Accumulated losses – 2014 reserve
Accumulated losses – 2015 H2 reserve
Retained profi ts – 2016 reserve
Retained profi ts – 2017 reserve
Retained profi ts – 2018 reserve
Retained profi ts – 2019 reserve
Retained profi ts – 2020 reserve
Accumulated losses – 2021 reserve
Accumulated losses – 2022 reserve
Total equity
Loss for the year
Total comprehensive income
Southern Cross Media
Group Limited
2022
$’000
1,882
460,258
462,140
1,733
1,733
460,407
1,439,815
5,198
(96,805)
(323,833)
–
–
–
59,690
55,054
(355,442)
(323,270)
460,407
(311,379)
(311,379)
2021
$’000
3,218
806,137
809,355
7,520
7,520
801,835
1,445,295
4,665
(96,805)
(323,833)
4,996
2,534
1,943
63,428
55,054
(355,442)
–
801,835
(355,442)
(355,442)
In FY2022, the parent entity recorded an impairment of $355.8 million (FY2021: $345.0 million) due to a reduction in the recoverable
amount of the investment in a subsidiary determined using fair value less costs of disposal.
b) Guarantees entered into by the parent entity
The parent entity has not provided any fi nancial guarantees in respect of bank overdrafts and loans of subsidiaries as at 30 June 2022
(2021: nil). The parent entity has not given any unsecured guarantees at 30 June 2022 (2021: nil).
c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2022 (30 June 2021: nil).
d) Contractual commitments for the acquisition of property, plant or equipment
As at 30 June 2022, the parent entity had no contractual commitments (30 June 2021: nil).
Recognition and Measurement
Parent entity fi nancial information
The fi nancial information for the parent entity has been prepared on the same basis as the consolidated fi nancial statements,
except as set out on the following page.
i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries are accounted for at cost in the fi nancial statements of the Company, less any impairment charges.
ii) Tax consolidation legislation
The Company and its wholly owned Australian controlled entities have implemented the tax consolidation legislation as of
23 November 2005.
The Company is the head entity of the tax consolidated group. Members of the group have entered into a tax sharing agreement in order
to allocate income tax expense to the wholly owned subsidiaries on a stand-alone basis. The tax sharing arrangement provides for the
allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. The possibility of
such a default is considered remote at the date of this report.
Members of the tax consolidated group have entered into a tax funding agreement. The group has applied the group allocation approach
in determining the appropriate amount of current taxes to allocate to members of the tax consolidated group. The tax funding agreement
provides for each member of the tax consolidated group to pay a tax equivalent amount to or from the parent in accordance with their
notional current tax liability or current tax asset. Such amounts are refl ected in amounts receivable from or payable to the parent company
in their accounts and are settled as soon as practicable after lodgement of the consolidated return and payment of the tax liability.
82 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
Other Notes to the Financial Statements
22. Share-Based Payments
The Company operates a long-term incentive plan for Executive KMP and certain senior executives. The share-based payment expense for
the year ended 30 June 2022 was $532,887 (2021: $228,186).
The following table reconciles the performance rights outstanding at the beginning and end of the year:
Number of performance rights
Balance at beginning of the year
Granted during the year
One for 10 share consolidation
Exercised during the year
Forfeited during the year
Balance at end of year
2022
427,861
–
–
–
(24,809)
403,052
2021
–
4,278,492
(3,850,631)
–
–
427,861
Recognition and Measurement
Share-based compensation benefi ts are provided to employees via certain Employee Agreements. Information relating to these
Agreements is set out in the Remuneration Report. The fair value of entitlements provided is recognised as an employee benefi t expense
with a corresponding increase in equity. The fair value is measured at grant date and recognised as an expense over the period during
which the employees become unconditionally entitled to the shares. To the extent the FY2022 Executive Incentive Plan (‘EIP’) performance
conditions are satisfi ed during FY2022, the Company will award performance rights in FY2023, however the one-year performance period
started on 1 July 2022 and the fair value of the related share-based compensation will be recognised as an expense over the three-
year period from that date to the end of the service period on 30 June 2025 when the performance rights will be eligible for vesting and
conversion to fully paid ordinary shares. The fair value and number of the performance rights relating to the FY2022 EIP will be remeasured
on the grant date of the performance rights.
The fair value of the share-based compensation provided during FY2022 was determined using a Black-Scholes-Merton model for the
Absolute Total Shareholder Return performance rights, with the following inputs:
Valuation date
Valuation date share price
Fair value at grant date
Exercise price
Dividend yield
Risk free interest rate
Expected volatility
30 June 2022
$0.99
$0.99
Nil
0.00%
3.365%
51.001%
The fair value at grant date of the securities granted is adjusted to refl ect any market vesting conditions but excludes the impact of any non-
market vesting conditions (for example, profi tability and sales growth targets). Non-market vesting conditions are included in assumptions
about the number of shares that are expected to be issued. At each balance sheet date, the entity revises its estimate of the number of
shares that are expected to be issued. The employee benefi t expense recognised each period takes into account the most recent estimate.
The impact of the revision to original estimates, if any, is recognised in profi t or loss with a corresponding adjustment to equity. Where the
terms of the share-based payment entitlement are modifi ed in the favour of the employee, the changes are refl ected when determining the
impact on profi t or loss.
2022 Annual Report
Notes to the Consolidated Financial Statements | 83
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
23. Remuneration of Auditors
a) Audit and other assurance services
PricewaterhouseCoopers Australian fi rm:
Statutory audit and review of fi nancial reports
Other assurance services
Regulatory returns
Total remuneration for audit and other assurance services
b) Taxation services
PricewaterhouseCoopers Australian fi rm:
Tax services
Total remuneration for taxation services
c) Other services
PricewaterhouseCoopers Australian fi rm:
Debt advisory
Other
Total remuneration for other services
Total
Consolidated
2022
$
2021
$
758,462
–
18,200
776,662
734,155
10,000
27,455
771,610
–
–
–
–
150,000
–
150,000
926,662
15,000
58,100
73,100
844,710
The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise
and experience with the Company and/or the Group are important.
The Board has considered the position and, in accordance with the advice received from the Audit & Risk Committee, is satisfi ed
that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The Directors are satisfi ed that the provision of non-audit services by the auditor did not compromise the
auditor independence requirements of the Corporations Act 2001 for the following reasons:
– all non-audit services have been reviewed by the Audit & Risk Committee to ensure they do not impact the impartiality and objectivity
of the auditor; and
– none of the services undermine the general principles relating to auditor independence as set out in APES 110: Code of Ethics for
Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity
for the Company, acting as advocate for the Company or jointly sharing economic risk and rewards.
24. Related Party Disclosures
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on
consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.
a) KMP
During the year, no KMP of the Company or the Group has received or become entitled to receive any benefi t because of a contract made
by the Group with a KMP or with a fi rm of which a KMP is a member, or with an entity in which the KMP has a substantial interest except on
terms set out in the governing documents of the Group or as disclosed in this fi nancial report.
The aggregate compensation of KMP of the Group is set out below:
Short-term employee benefi ts
Post-employment benefi ts
Other long-term benefi ts
Share-based payments
Consolidated
2022
$
4,751,763
162,009
67,550
320,770
5,302,092
2021
$
6,348,915
207,441
91,614
159,468
6,807,438
Note: Changes to KMP during the year can be found in the Remuneration Report.
The number of ordinary shares in the Company held during the fi nancial year by KMP of the Company and Group, including their personally
related parties, are set out in the Remuneration Report in the Directors’ Report. There were no loans made to or other transactions with
KMP during the year (2021: nil).
b) Subsidiaries and Associates
Ownership interests in subsidiaries are set out in note 20. Details of interests in associates and distributions received from associates are
disclosed in note 19.
84 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
25. Leases and Other Commitments
Capital commitments
Commitments for the acquisition of plant and equipment contracted for at the reporting date but not
recognised as liabilities are payable as follows:
Within one year
Consolidated
2022
$’000
2021
$’000
2,400
2,400
467
467
Leases
From 1 July 2019, the Group recognised right-of-use assets for these leases, except for short-term and low value leases.
The Group leases various premises, IT equipment and vehicles. Premises typically have initial rental periods of fi ve to 10 years, with options,
exercisable by the Group, for periods extending the total lease period up to 30 years. Other leases are typically for less than four years.
Lease terms are negotiated on an individual basis and contain a wide range of diff erent terms and conditions.
Extension options are included in a number of property leases across the Group, which provide fl exibility in terms of managing the assets
used in the Group’s operations. The extension options are exercisable by the Group, which applies judgement to determine whether these
options are reasonably certain or not. Extension and termination options have been included in all property leases across the Group except
those that are surplus to the Group’s operational requirements.
The Group sub-leases buildings under an operating lease and rent revenue is recorded as income in the profi t or loss on a
straight-line basis.
As with all property leases in its portfolio, the Group assumes that extension options in leases will be exercised and therefore included
in the calculations for the lease liability and ROU asset. On 5 May 2021 the Group signed a lease for its Melbourne operations. A further
11 property leases were renegotiated during the year resulting in a total net lease liability and ROU remeasurements of $0.2 million and gain
on lease disposal of $0.1 million.
a) Amounts Recognised in the Consolidated Statement of Comprehensive Income
The Consolidated Statement of Comprehensive income shows the following amounts relating to leases:
Depreciation charge of right-of-use assets
Premises
IT equipment
Vehicles
Interest expense on lease liabilities
b) Amounts Recognised in the Consolidated Statement of Financial Position
The Consolidated Statement of Financial Position includes the following amounts relating to leases:
Lease liabilities as at 30 June 2022:
Lease Liabilities
Current
Non-Current
Total lease liabilities
The associated right-of-use assets as at 30 June 2022 by asset class:
Premises
IT Equipment
Vehicles
Total right-of-use assets
2022
$’000
7,978
1,509
363
9,850
6,271
2022
$’000
6,497
120,322
126,819
2022
$’000
107,034
3,275
450
110,759
2021
$’000
9,924
1,471
217
11,612
6,874
2021
$’000
9,868
103,101
112,969
2021
$’000
94,673
3,428
588
98,689
2022 Annual Report
Notes to the Consolidated Financial Statements | 85
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Hedge accounting
The Group designated interest rates swaps as cash fl ow hedges
and has applied hedge accounting from this date.
The Group documents the relationship between hedging
instruments and hedged items, as well as its risk management
objective and strategy for undertaking the hedge transactions.
The Group also documents its assessment, both at hedge inception
and on an ongoing basis, of whether the derivatives that are used
in hedging transactions have been and will continue to be highly
eff ective in off setting changes in cash fl ows of hedged items.
The fair values of derivative fi nancial instruments used for hedging
purposes are presented within the balance sheet. Movements in
the hedging reserve are shown within the Statement of Changes
in Equity. The full fair value of a hedging derivative is classifi ed as
a non-current asset or liability when the remaining maturity of the
hedged item is more than 12 months; it is classifi ed as a current
asset or liability when the remaining maturity of the hedged item
is less than 12 months.
Derivatives
Hedge ineff ectiveness
Hedge eff ectiveness is determined at the inception of the hedge
relationship, and through periodic prospective eff ectiveness
assessments to ensure that an economic relationship exists
between the hedged item and hedging instrument.
The Group enters into interest rate swaps that have similar critical
terms as the hedged item, such as reference rate, reset dates,
payment dates, maturities and notional amount. The Group hedges
up to 100% of its loans, and the hedged item is identifi ed as a
proportion of the outstanding loans up to the notional amount of the
swaps. As all critical terms matched during the year, the economic
relationship was 100% eff ective.
The Group therefore performs a qualitative assessment of
eff ectiveness. If changes in circumstances aff ect the terms of the
hedged item such that the critical terms no longer match exactly
with the critical terms of the hedging instrument, the Group uses
the hypothetical derivative method to assess eff ectiveness.
Hedge ineff ectiveness may occur due to:
– the credit value/debit value adjustment on the interest rate
swaps which is not matched by the loan; and
– diff erences in critical terms between the interest rate
swaps and loans.
There was no ineff ectiveness during 2022 or 2021 in relation
to the interest rate swaps.
25. Leases and Other Commitments (continued)
At 30 June 2022, the total cash outfl ow for leases was $14.3 million
(2021: $13.4 million) and additions to the right-of-use asset was
$21.6 million (2021: $2.1 million), excluding acquisition leases.
Rental 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.
26. Events Occurring after Balance Date
SCA has completed a strategic review of SCA’s television assets
and concluded that value will be maximised by continuing to hold
the television assets. SCA received multiple bids for the asset but
concluded that greater value would be realised for shareholders by
retaining the asset and the earnings that it derives. The review was
supported by SCA’s fi nancial adviser, Grant Samuel.
There are no other matters or circumstances that have arisen since
the end of the fi nancial year that have signifi cantly aff ected, or may
signifi cantly aff ect, the operations, results of operations or state of
aff airs of the Group in subsequent accounting periods.
27. Other Accounting Policies
Defi ned contribution scheme
The Group operates a defi ned contribution scheme. The defi ned
contribution scheme comprises fi xed contributions made by the
Group with the Group’s legal or constructive obligation being limited
to these contributions. Contributions to the defi ned contribution
scheme are recognised as an expense as they become payable.
Prepaid contributions are recognised in the Statement of Financial
Position as an asset to the extent that a cash refund or a reduction
in the future payments is available. The defi ned contribution plan
expense for the year was $15.6 million (2021: $13.5 million) and is
included in employee expenses.
Derivative fi nancial instruments
The Group enters into interest rate swap agreements to manage
its fi nancial risks. Derivatives are initially recognised at fair
value at the date a derivative contract is entered into and are
subsequently remeasured to their fair value. The method of
recognising the resulting gain or loss depends on whether
the derivative is designated as a hedging instrument and if
so, the nature of the item being hedged. The Group may have
derivative fi nancial instruments which are economic hedges,
but do not satisfy the requirements of hedge accounting. Gains
or losses from changes in fair value of these economic hedges
are taken through profi t or loss.
If the derivative fi nancial instrument meets the hedge accounting
requirements, the Group designates the derivatives as either
(1) hedges of the fair value of recognised assets or liabilities or a
fi rm commitment (fair value hedge); or (2) hedges of highly probable
forecast transactions (cash fl ow hedge). The Group documents at
the inception of the transaction the relationship between hedging
instruments and hedged items, as well as its risk management
objective and strategy for undertaking various hedge transactions.
The Group also documents its assessments, both at hedge
inception and on an ongoing basis, of whether the derivatives that
are used in hedging transactions have been and will continue to
be highly eff ective in off setting changes in fair values or cash fl ows
of hedged items.
The fair values of over-the-counter derivatives are determined using
valuation techniques adopted by the Directors with assumptions
that are based on market conditions existing at each balance sheet
date. The fair values of interest rate swaps are calculated as the
present values of the estimated future cash fl ows.
86 | Notes to the Consolidated Financial Statements
Southern Cross Austereo
27. Other Accounting Policies (continued)
Cash fl ow hedge
The eff ective portion of changes in the fair value of derivatives that
are designated and qualify as cash fl ow hedges is recognised in
other comprehensive income and accumulated in reserves in equity.
The gain or loss relating to the ineff ective portion is recognised
immediately in the Statement of Comprehensive Income.
Amounts accumulated in equity are reclassifi ed to profi t or loss in
the periods when the hedged item aff ects profi t or loss (for instance
when the forecast sale that is hedged takes place). The gain or
loss relating to the eff ective portion of interest rate swaps hedging
variable rate borrowings is recognised in profi t or loss within
‘interest expense and other borrowing costs’. When a hedging
instrument expires or is sold or terminated, or when a hedge no
longer meets the criteria for hedge accounting, any cumulative
gain or loss existing in equity at that time remains in equity and is
recognised when the forecast transaction is ultimately recognised
in profi t or loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was reported in equity is
immediately reclassifi ed to profi t or loss.
Fair value estimation
The fair value of fi nancial assets and fi nancial liabilities
must be estimated for recognition and measurement or for
disclosure purposes.
The Group has adopted AASB 7 Financial Instruments: Disclosures
which requires disclosure of fair value measurements by level of the
following fair value measurement hierarchy:
Level 1 – quoted prices (unadjusted) in active markets for identical
assets or liabilities;
Level 2 – inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly (as prices)
or indirectly (derived from prices); and
Level 3 – inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The fair value of fi nancial instruments that are not traded in an active
market (for example, unlisted convertible notes) is determined
using valuation techniques. The Group uses a variety of methods
and makes assumptions that are based on market conditions
existing at each balance date. Other techniques, such as estimated
discounted cash fl ows, are used to determine fair value for the
remaining fi nancial instruments. The fair value of interest rate swaps
is calculated as the present value of the estimated future cash fl ows.
The nominal value less estimated credit adjustments of trade
receivables and payables are assumed to approximate their fair
values. The fair value of fi nancial liabilities for disclosure purposes
is estimated by discounting the future contractual cash fl ows at the
current market interest rate that is available to the Group for similar
fi nancial instruments.
New accounting standards and interpretations
The year-end fi nancial statements have been prepared on a basis
of accounting policies consistent with those applied in the 30 June
2021 fi nancial statements. The Group adopted certain accounting
standards, amendments, and interpretations during the fi nancial
year, which did not result in changes in accounting policies nor an
adjustment to the amounts recognised in the fi nancial statements.
They also do not signifi cantly aff ect the disclosures in the Notes to
the fi nancial statements.
2022 Annual Report
Notes to the Consolidated Financial Statements | 87
Directors’ Declaration
The Directors of the Company declare that:
1.
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2. in the Directors’ opinion, the fi nancial statements and notes as set out on pages 54 to 87 are in accordance with the Corporations Act
2001, including compliance with accounting standards and giving a true and fair view of the fi nancial position and performance of the
Company and the consolidated entity; and
3. the Directors have been given the declarations required by section 295A of the Corporations Act 2001.
4. Note 1(i) confi rms that the fi nancial statements also comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
Signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act.
On behalf of the Directors
Rob Murray
Chairman
Sydney, Australia
22 August 2022
Grant Blackley
Managing Director
Sydney, Australia
22 August 2022
88 | Directors’ Declaration
Southern Cross Austereo
Independent Auditor’s Report
to the members of Southern Cross Media Group Limited
Independent auditor’s report
To the members of Southern Cross Media Group Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Southern Cross Media Group 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 30 June 2022 and of its
financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
(cid:3511)
(cid:3511)
(cid:3511)
(cid:3511)
(cid:3511)
(cid:3511)
the consolidated statement of financial position as at 30 June 2022
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999
Liability limited by a scheme approved under Professional Standards Legislation.
2022 Annual Report
Independent Auditor’s Report | 89
Independent Auditor’s Report
to the members of Southern Cross Media Group Limited
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
(cid:3511) For the purpose of our audit we used overall Group materiality of $1.8 million, which represents
approximately 5% of the Group’s profit before tax adjusted to exclude the impairment of intangible assets.
(cid:3511) We applied this threshold, together with qualitative considerations, to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the
financial report as a whole.
(cid:3511) We chose Group profit before tax adjusted because, in our view, it is the benchmark against which the
performance of the Group is most commonly measured. We adjusted to exclude the impairment of
intangible assets as it is an unusual and infrequently occurring item impacting profit or loss.
(cid:3511) We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
Audit Scope
(cid:3511) Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
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.
90 | Independent Auditor’s Report
Southern Cross Austereo
Key audit matter
How our audit addressed the key audit matter
Impairment assessment for licences, tradenames,
brands and goodwill
(refer to note 10)
In performing our audit work we considered, amongst
other things:
The Group continues to have significant indefinite
lived intangible assets in the Audio cash generating
unit (CGU), totalling $696.1 million as at 30 June
2022. These are subject to an annual impairment
assessment by the Group. During the year, the Group
recognised an impairment charge of $250.9 million in
relation to goodwill and indefinite lived intangible
assets.
This was a key audit matter due to the size of the
indefinite lived intangible assets and on the basis that
the impairment assessment involves judgemental
estimates of future profits and cash flows.
As described in note 10, there is an inherent level of
uncertainty around the key assumptions that are used
in the impairment assessment, which includes making
assumptions about internal and external factors such
as industry growth rates, future market share and the
forecast financial performance of the Group.
(cid:3511) whether the Group’s identification of
CGUs remains appropriate
(cid:3511)
(cid:3511)
the market capitalisation of the Group in
comparison to the carrying value of its
net assets
the appropriateness of adopting a fair
value less costs of disposal methodology
for estimating the Audio CGU’s
recoverable amount.
To evaluate the fair value less costs of disposal
discounted cash flow model (“the model”) prepared
for the Group’s Audio CGU impairment assessment,
with assistance from PwC valuation experts in
aspects of our work, we performed the following
procedures, amongst others:
(cid:3511)
(cid:3511)
(cid:3511)
(cid:3511)
(cid:3511)
performed mathematical accuracy
checks
assessed the appropriateness of the
discount rate incorporated in the model
in consideration of the forecasted cash
flows
assessed the appropriateness of the key
assumptions within the model compared
to observable market information where
available, and considered management’s
ability to carry out courses of action
evaluated the Group’s historical ability to
forecast future cash flows by comparing
forecast cash flows with reported actual
performance
considered whether the model’s
allocation of corporate costs between
CGUs was appropriate and reflective of
actual costs incurred
2022 Annual Report
Independent Auditor’s Report | 91
Independent Auditor’s Report
to the members of Southern Cross Media Group Limited
Key audit matter
How our audit addressed the key audit matter
(cid:3511)
(cid:3511)
assessed the sensitivity of changes in
key assumptions incorporated in the
model
compared the Group’s valuations to
external data sources including broker
reports.
We evaluated the adequacy of the disclosures in note
10 in light of the requirements of Australian
Accounting Standards.
Indefinite lived classification of intangible assets
(refer to note 9)
In assessing the indefinite useful life of intangible
assets, we performed the following procedures,
amongst others:
As at 30 June 2022, the Group has Audio intangible
assets totalling $696.1 million, including Radio
Broadcasting Licences, Brands and Tradenames
classified as indefinite lived intangible assets.
This was a key audit matter because determination of
whether or not intangible assets are indefinite lived
involves judgement. The determination has an impact
on the financial report as it affects whether
amortisation is recorded in the consolidated
statement of comprehensive income.
(cid:3511)
(cid:3511)
(cid:3511)
(cid:3511)
(cid:3511)
considered regulatory developments in the
year which could change the licence renewal
process or use of the brands
assessed whether there had been any
revocation of radio licences by Australian
Communications and Media Authority
(ACMA) in the year
considered the forecasted growth of the
associated cash flows of the assets
evaluated the directors’ strategic plans for
the intended use of the assets
benchmarked the conclusion made by the
directors against a selection of similar assets
held by other industry participants in the
radio broadcasting market.
We considered the adequacy of the significant
accounting policy disclosed in note 9 with regard to
Australian Accounting Standards.
92 | Independent Auditor’s Report
Southern Cross Austereo
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 30 June 2022, but does not include the
financial report and our auditor’s report thereon. Prior to the date of this auditor's report, the other
information we obtained included the directors' report. We expect the remaining other information to
be made available to us after the date of this auditor's report.
Our opinion on the financial report does not cover the other information and we do not and will not
express an opinion or any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
When we read the other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and use our
professional judgement to determine the appropriate action to take.
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:
2022 Annual Report
Independent Auditor’s Report | 93
Independent Auditor’s Report
to the members of Southern Cross Media Group Limited
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 3(cid:23) to (cid:24)(cid:21) of the directors’ report for the
year ended 30 June 2022.
In our opinion, the remuneration report of Southern Cross Media Group Limited for the year ended 30
June 2022 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Trevor Johnston
Partner
Melbourne
22 August 2022
94 | Independent Auditor’s Report
Southern Cross Austereo
Additional Information
The information below is provided pursuant to ASX Listing Rule 4.10 and was current on 18 August 2022. The Company has only one class
of shares, which are fully paid ordinary shares. All holders listed below hold fully paid ordinary shares and each holder has the same voting
rights. There are no unlisted securities. The Company is conducting an on-market buy-back which commenced on 7 April 2022.
Twenty largest holders
The names of the 20 largest holders of the Company’s quoted equity securities are listed below.
Name
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Limited
National Nominees Limited
BNP Paribas Noms Pty Ltd (DRP)
Citicorp Nominees Pty Limited (Colonial First State Inv A/C)
HSBC Custody Nominees (Australia) Limited (NT Cwlth Super Corp A/c)
John William Harbot
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd (DRP A/c)
Bradley Barry Krause
BNP Paribas Noms (NZ) Ltd (DRP)
Wearne Webber Capital Pty Limited
Birbal Investments Pty Ltd
Talmal Pty Ltd (Talmal A/c)
Netyard Pty Ltd
Sling Super Pty Ltd (Sling Super Fund A/c)
Sandhurst Trustees Ltd (SISF A/C)
Netwealth Investments Limited (Wrap Services A/c)
Rahmon Coupe and Julia Coupe (Coupe Family A/c)
Offi cial Intelligence Pty Ltd
Distribution of shareholdings
Analysis of numbers of equity security holders by size of holding:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Holding less than a marketable parcel
Fully paid
ordinary shares
% Issued
capital
63,432,931
61,190,475
46,260,950
14,894,813
4,692,089
2,899,387
2,702,012
1,600,000
1,315,103
1,188,408
1,143,202
1,000,000
750,000
550,000
540,000
465,000
409,000
367,919
351,125
328,354
206,080.768
24.32
23.46
17.73
5.71
1.80
1.11
1.04
0.61
0.50
0.46
0.44
0.38
0.29
0.21
0.21
0.18
0.16
0.14
0.13
0.13
79.00
Number of
shareholders
Fully paid
ordinary shares
% Issued
capital
5,512
3,625
1,029
1,039
73
11,278
3,100
2,432,339
8,996,678
7,731,816
27,283,952
214,403,008
260,847,793
710,020
0.93
3.45
2.96
10.46
82.19
100.00
0.27
2022 Annual Report
Additional Information | 95
Additional Information
Substantial holders
Substantial holders in the Company (with holdings as notifi ed to the Company most recently before 18 August 2022) are set out below:
Name
Allan Gray Australia Pty Ltd and its related bodies corporate*
Ubique Asset Management Pty Limited
Investors Mutual Ltd and its related bodies corporate
Retail Employees Superannuation Pty Limited
Dimension Fund Advisors LP and related entities*
Fully paid
ordinary shares
% Issued
capital
35,829,504
14,203,190
23,706,976
19.36
13.56
5.38
8.97
5.00
52.29
* The most recent notices given by these holders pre-dated one or both of the Company’s equity raising (comprising a placement and entitlements off er)
in April 2020 and the one for 10 consolidation of share capital in November 2020. Percentage interests held by these holders shown in the above table are
based on the most recent notices given by these holders. It is not meaningful to state the number of shares held by these holders on the date of their most
recent notices because of the changes in the Company’s capital structure since the date of those notices.
Voluntary escrow
Securities subject to voluntary escrow are set out below:
Type
Voluntary escrow
Date escrow
period ends
Fully paid
ordinary shares
N/a
–
–
On-market purchases for employee incentive plans
During the year ended 30 June 2022, the Company purchased the following shares on-market for allocation to employees under the
Company’s executive incentive plans:
Type
Short-term incentive plan
Long-term incentive plan
Executive incentive plan
Fully paid
ordinary shares
Average price
135,356
–
–
135,356
2.0849
–
–
2.0849
96 | Additional Information
Southern Cross Austereo
Corporate Directory
Southern Cross Media Group Limited
ABN 91 116 024 536
Company Secretary
Mr Tony Hudson
Registered offi ce
Level 2, 101 Moray Street
South Melbourne VIC 3205
Tel: +61 3 9252 1019
Web: https://www.southerncrossaustereo.com.au
Share registry
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Tel:
1300 555 159 (within Australia)
+61 3 9415 4062 (from outside Australia)
Investor Centre:
https://www-au.computershare.com/investor/
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2022 Annual Report
Corporate Directory | 97