Southern Cross Media Group says it hopes the worst of the industry wide advertising slump is behind it but is expecting a flat profit result for 2012/13.
Shareholders, irate at the radio and television broadcaster’s poor performance, posted a strong protest vote against the re-election of its chairman.
Max Moore-Wilton, a high-profile former corporate executive and senior public servant, was re-elected, although 41.4 per cent of votes were cast against him at the company’s annual general meeting in Sydney on Wednesday.
There were also large no votes opposed to the election of fellow directors Leon Pasternak (39.1 per cent of votes against) and Michael Carapiet (27.5 per cent votes of against).
It was likely the trio would not have been re-elected without the support of Southern Cross’s largest shareholder Macquarie Group, which holds a 27.54 per cent stake, and Sir Nicholas Moore, the largest individual shareholder.
Mr Moore-Wilton is also the chairman of Sydney Airport, which was until three years ago majority owned by Macquarie Group.
The director of governance advisory Ownership Matters, Dean Paatsch, said the protest vote stemmed from a lack of board accountability for a prolonged period of financial underperformance by the company.
“Southern Cross Media has been a road crash for investors,” Mr Paatsch said on Wednesday.
The vote came on a day the company said it expected a flat profit result in 2012/13 amid declining revenues as it battled a difficult advertising market.
Southern Cross chief executive Rhys Holleran told the meeting that revenue in the first three months of 2012/13 was down 10 per cent from the prior corresponding period, with local sales down 5.1 per cent and national sales down 15.2 per cent.
Although it did not issue earnings guidance, Mr Holleran said the company largely concurred with market expectations for an eight to 10 per cent decline in revenue, and net profit in the vicinity of the low $90 millions, for 2012/13.
The company reported net profit of $95 million in 2011/12.
“Our focus has been on the quality of our radio programs and in management of our costs,” Mr Holleran told shareholders.
Southern Cross Media has been hit by weak advertising conditions and a horror year at the Ten Network, which supplies programming to Southern Cross’s regional television stations.
Mr Holleran said there were reasons to be positive, given Ten’s ratings had “stabilised” and ratings for Sydney 2-Day FM’s Kyle and Jackie O show were at all-time highs.
The company was on track to achieve a further $6 million in cost savings over the rest of 2012/13.
“Having seen these numbers, I think it should be noted that this quarter should be seen in our view as the low watermark for the year,” Mr Holleran said.
Southern Cross closed up half a cent at $1.02.
