- Regional television broadcaster Prime Media Group (PRT) has taken some revenue blows as COVID-19 disrupts the advertising market
- The company said revenue over the month of April was 38.1 per cent lower than the same time period last year
- With the AFL season suspended, the company is missing out on some key advertising revenue opportunities
- Nevertheless, Prime Media said it remains cashflow-positive for the year
- Some cost-saving measures and Federal Government assistance are in place to ensure the company can survive the virus outbreak
- Prime Media shares lost a slight 1.96 per cent today to close worth 10 cents each
Regional television broadcaster Prime Media Group (PRT) has taken some revenue blows as COVID-19 disrupts the advertising market.
The company told shareholders today revenue over the month of April came in lower by $6 million, or 38.1 per cent, compared to the same time last year.
For the full financial year to April 2020, revenue is sitting $20.2 million, or 12.7 per cent, lower than last year.
Prime Media said the weakened economic sentiment from the spreading coronavirus has dried up several streams of advertising revenue.
Retail, household furnishing, and motor vehicle spending are low across the country as people board themselves up in their homes and stock up on essentials. This means advertising in these key sectors is suffering.
Moreover, with the AFL season on hold while the virus spreads, some key revenue opportunities for the company are no longer available.
Prime Media CEO Ian Audsley said accurately forecasting advertising revenue for the rest of the financial year is tough.
“Advertising expenditure in regional markets has slowed dramatically in response to restrictions to stop the spread of the COVID-19 virus,” Ian said.
“Forecasting regional advertising revenue continues to be problematic as we face a prolonged economic downturn and associated decline in advertising activity,” he said.
As such, the company is keeping its earnings guidance suspended. Importantly, however, the company said it has not drawn funds on its debt financing facility and remains cashflow-positive for the year despite the COVID-19 disruptions.
This does not mean the company is not taking important measures to keep business healthy until the virus subsides, of course. The Prime Media management team has slashed its salaries by 20 per cent and given up all incentive payments for the rest of the year.
Non-Executive Directors are also taking 20 per cent reduced paychecks, while the company has put a freeze on hiring.
The company has also registered for Government assistance through the JobKeeper program and will apply for a grant under the Public Interest News Gathering Program.
Following today’s news, Prime Media shares lost a slight 1.96 per cent to close worth 10 cents each.