Austereo Group net annual profit dives by 36pc

SYDNEY - Australia's biggest radio broadcaster Austereo Group posted a 36 per cent drop in annual net profit yesterday as write-offs and tough competition from rivals bit into its earnings.

In a presentation to be given to analysts, the company said investment and heightened competition could result in a modest, year-on-year performance decline.

Austereo said in a statement it had maintained audience leadership throughout the year despite new entrants and had held its radio operations margin steady at 34 per cent, which it said was in line with world best radio practice.

However, chairman Peter Harvie said an expected improvement in advertising had not occurred.

"We believe recovery will ultimately flow on, given the vital importance of advertising as a key marketing tool and the unique strength of radio as an advertising medium," he said.

Austereo said its full-year net profit came in at A$36.65 million ($41.15 million) from A$57 million a year ago. Net profit from continuing operations came in at A$43.3 million.

Shares in Austereo slid to A$1.45, making for a fall of about 4 per cent since the start of the year, compared with a 7 per cent rise in the underlying market.

Austereo, which owns the popular Triple M network and Sydney's 2Day FM stations, listed on the Australian Stock Exchange in March 2001 when it was spun off from Village Roadshow, which retained a 56 per cent stake.

It claims about six million Australian listeners a week, but has seen its market and revenue share eroded by competition in its main markets from DMG Radio Australia, a unit of Britain's Daily Mail & General Trust, which runs the Nova stations.

Auctions for commercial FM licences in some states are set to further intensify competition for Austereo, which is excluded from bidding by its current licence holdings.

The group recently shut its A-Live concert division after its latest Rumba festival, featuring Jon Bon Jovi, Natalie Imbruglia and Shaggy, lost A$3.8 million before interest and tax.