MediaWorks has today announced its full year results to 31 December 2020 (FY20) demonstrating the resilience of the business despite the considerable impact of COVID-19 over the year.

Reflecting a significant COVID-19 driven reduction in radio and outdoor advertising revenue, the business reported a net loss after tax of $4.8 million.

The result includes a one-off impairment charge of $12 million taken against the business in 2020*.

The results show that despite challenging operating conditions over the year the core radio and outdoor businesses have strong revenue and are profitable with clear growth opportunities.

FY20 Highlights

• Operating EBITDA stable at $34.6 million.
• Gross revenue stable at $184.1 million in a year significantly impacted by COVID-19
• $4.8 million net loss after tax. An 80.8% improvement from FY19.
• 24.2% decrease in net debt to $85.45 million.
• Television business and land/buildings sold.
• Auckland radio and outdoor operations consolidated in new purpose-built head office.
• Commitment letter signed with new NZ led banking syndicate to refinance existing debt on significantly more favourable terms.

MediaWorks CEO Cam Wallace says that the results are pleasing given the context of a global pandemic and associated drop in advertising revenue.

“To achieve these results in a year when outdoor advertising revenue fell by 32% and radio advertising revenue fell by 14% is a reflection of the underlying robustness of our business and the strength of our brands.

“We have already seen advertising revenue recover well, and that along with ongoing cost management, and a number of steps taken to get the business match fit provides us with a clear path to profitability in 2021.

“Our radio business was a particular highlight of the year, maintaining its market leading position and continuing its track record of profitability despite COVID-19 challenges. The ongoing resilience and profitability of the radio business is impressive, and we expect this to continue.

“2020 also marked the first full year of the outdoor business being part of MediaWorks and it made a significant contribution to the results. Although the outdoor business was severely impacted by COVID-19 restrictions it has gradually recovered throughout the year and offers substantial growth prospects for 2021 and beyond.

“A number of major milestones were also completed over the year which have resulted in a match fit and profitable core business.

“Highlights of these include the separate sales of the TV business and land, the consolidation of our Auckland operations into our purpose-built head-office, and the integration of our outdoor business.

“I’d like to thank all of our team for their hard work on these initiatives and others over the year. They achieved fantastic results in a highly challenging operating environment and this work will underpin our success and growth in coming years.”

Outlook

Mr Wallace noted that the outlook for the business was positive with strong growth potential.

“The core of our business is profitable and resilient, we are match-fit operationally, and we have a number of clear growth and acquisition opportunities.

“Our now fully integrated outdoor business in particular has a strong outlook with the growth of digital assets, greater utilisation of cross channel/integration opportunities, and potential for acquisition activity.

“More generally across the MediaWorks business we have identified a number of potential acquisition opportunities and are actively exploring these.

“We are also currently assessing our capital structure and how this can best contribute to the ongoing growth and success of the business. We expect this work along with a broader strategy piece to be completed within the year”, concluded Mr Wallace.