Welcome to a midweek edition of Unmade. Today we examine the latest financial update from HT&E, parent company of Australia’s top radio company ARN.

There’s now just one week left until we run Australia’s first retail media conference - RE:Made. It takes place in Sydney next Thursday March 2. Unmade’s paying members get an extra discount on ticket prices. It’s one of many subscriber benefits.

HT&E’s journey may be nearly over

Listening to yesterday’s annual results investor call, there was a sense that as a company HT&E may be about to reach its final form.

A decade ago, APN News & Media, as it was then, was a muddled media conglomerate. It owned half stakes in two different outdoor companies; owned regional newspapers in Queensland and NSW (which was where the company had its roots as Australian Provincial Newspapers); and owned half a radio network.

Now HT&E is close to becoming just one thing: an audio company. It’s the culmination of a decade-long reshaping kicked off by Michael Miller - who took the helm in 2013 after boardroom discontent led to the ousting of previous CEO Brett Chenoweth - and continued by Ciaran Davis who stepped up after Miller returned to News Corp in 2015.

The ownership stakes in APN Outdoor and Adshel are long gone. The newspapers were sold to News Corp and later closed. Instead HT&E took full ownership of Australian Radio Network, and added the regional radio operations of Grant Broadcasters to the mix a year ago.

Thanks to the Kyle & Jackie O Show on Kiis in Sydney and the Christian O’Connell Show on Gold in Melbourne, ARN is the country’s top radio company. The company’s streaming service iHeartRadio is a close second to Southern Cross Austereo’s Listnr.

HT&E has net debt of $61.1m, and is due next month to sell its stake in software company Soprano Design for $66m, effectively becoming debt free.

That leaves HT&E - with the exception of its 51% stake in creative agency Emotive and ownership of Hong Kong outdoor company Cody - as a pure play audio company, with a simple structure when it comes to any future M&A.

The decade that reshaped APN into HT&E:

• 2013 APN News & Media sells last of its interest in APN Outdoor to private equity

• 2014 APN buys out joint venture partner Clear Channel to fully own Australian Radio Network; ;aunches KiisFM after poaching Kyle Sandilands and Jackie Henderson

• 2016 APN sells Queensland and NSW regional newspaper portfolio to News Corp

• 2016 APN buys out joint venture partner Clear Channel to fully own Adshel

• 2017 APN rebrands as Here, There & Everywhere

• 2018 HT&E sells Adshel to Ooh

• 2022 HT&E buys Grant Broadcasters

• 2023 HT&E sells stake in Soprano Design

The company follows a calendar year rather than traditional financial year so yesterday’s numbers were for the full 12 months.

The company reported revenues of $344m and EBITDA profits of $91.8m. Thanks to the boost of owning the Grant Broadcasters stations, that was a jump in profits and revenue - the biggest since the company got out of newspapers and outdoor.

Admittedly, in historical context, the company is much smaller than its glory days as APN News & Media, but that goes for most media companies. The last eight years numbers look small in comparison.

The closest point of comparison for HT&E is SCA which released its half year results last week.

SCA (which also owns regional TV stations) did $260m in revenue and $43m in profit for the half year.

That compares to HT&E’s full year numbers of $344m revenue and $92m profit.

Despite doing smaller annual revenues, HT&E is worth more than SCA. On the ASX, SCA’s market capitalisation is $250m, while HT&E stands at $377m.

Yesterday also saw the release of HT&E’s 2022 Annual Report. It disclosed total remuneration for Davis last year of $2,004,345. Chairman Hamish McLennan received $303,287.

One of the intriguing things about yesterday’s announcement was the lack of interest among the analysts in asking about the rumours of Seven trying to buy HT&E, which have been extensively canvassed by the Australian Financial Review over the last fortnight.

However, Davis was asked about the prospect in today’s Sydney Morning Herald. He views HT&E as a seller, not a buyer, telling the SMH: “We probably aren’t in a position to be the lead [in any deal]. “But I certainly believe that if there is any consolidation -that is people are looking at radio as part of that consolidated play - we are the absolute prime target to be included in the negotiations and discussions.”

The analysts were more interested in exploring a write down on HT&E’s balance sheet, with an impairment of $250m on the value of the company’s assets based on the “macroeconomic environment”. Eventually chief financial officer Andrew Nye conceded that included a write down on the value of the regional stations bought from Grant for more than $300m just a year ago. Slightly embarrassing. I suspect that’s why the share price eventually finished flat yesterday.

Will HT&E still be a standalone company this time next year? Unlikely.

A mostly flat day on the Unmade Index

Half of the stocks listed on the Unmade Index of ASX listed media and marketing companies finished the day exactly where they started yesterday with most prices trending upwards during the day before dropping back just before the market closed.

Unusually, real estate platform Domain and parent company Nine saw their stocks go in different directions. Domain, which has been battered because of low listing volumes, recovered a little, with the price going up 1.67%. Nine fell by 0.96%

Overall, the Unmade Index fell by 0.43% to 672.2 points.

Time to leave you to your Wednesday.

If you haven’t done so yet, remember to check out the program for next week’s RE:Made. For anyone working in media or marketing, retail media is the next sector you need to educate yourself on. For a half day of education, the ticket price of $295 is an absolute steal.

Toodlepip…

Tim Burrowes

Publisher - Unmade

tim@unmade.media