Reality has caught up with Prime Media Group, the Seven network’s regional affiliate in parts of Australia. New media forms, such as streaming video, the rise of social media and falling viewing levels and ad revenues, as well as diversifying viewing patterns, have impacted the business’ bottom line. And so it was in the year to June 30. Prime’s two trading downgrades during the year to June ended up being accurate warnings of sliding revenues and profits.
And as a result of that slide, and a sharp fall in audience levels during the year, Prime Media Group has bitten the bullet and written down the value of its TV licences and goodwill by just on $123 million as the outlook for regional TV broadcasting worsens. And, in doing so, the company became the last Australian TV network to impair its licence and goodwill balance sheet values.
Directors said of the impairment:
“This adjustment reflects the impact of new and largely unregulated market entrants, increased competition in the form of global and national media platforms, and the comprehensive reach of the internet and streaming services, all of which impact regional television audiences, and revenues.”
Despite the optimism, the result was bad — revenue down 7.7% to $238.8 million, profit down 18.3% and earnings before interest,tax, depreciation and amortisation fell 7.7% to $55.4 million. With the impairments of $122.9 million, the loss was just over $93 million. Total dividend for the year to June was 3.7%, down from 6.8 cents a share for 2014-15. That will hit the income for the company’s largest shareholder, Kerry Stokes’ Seven Group Holdings, which controls 11.4% of the issued shares.