ARN Media's Chairman, Hamish McLennan, addressed the company's Annual General Meeting on 14 May 2024, discussing the challenging economic and advertising conditions of 2023, as well as the disruption to ARN's proposed acquisition of Southern Cross Austereo (SCA).

ARN's partner, Anchorage Partners, recently withdrew from the bid to acquire SCA, leaving the takeover uncertain. In 2023, ARN acquired a 14.8% stake in SCA, positioning the company to form a consortium with Anchorage Capital Partners and propose an acquisition of SCA. The proposed acquisition was expected to create Australia's most valuable audio-led entertainment business, combining ARN and SCA's digital audio assets. However, the consortium withdrew its proposal after Anchorage decided not to acquire SCA's Regional TV business due to its continued decline and deteriorating outlook.

Despite Anchorage's withdrawal, ARN intends to engage with SCA on a revised proposal, under which ARN would acquire the same radio assets and assume 100% ownership of the combined digital audio assets of ARN and SCA. SCA shareholders would receive up to 0.870 ARN shares for each SCA share under the revised proposal.

"2023 has been a challenging year for Australian media, in tough economic conditions. ARN Media delivered a competitive operational performance against a backdrop of reduced consumer spend, a slowing economy and a reduction in government advertising spend, which impacted revenues," said McLennan. He added, "Last year, the Company's name changed to ARN Media, reflecting our ambition to build the most valuable audio entertainment business in Australia. To do this, our focus has been strengthening the business from the core, while building foundations to create more value for our shareholders now and into the future."

In 2023, ARN reported Group revenues of $334 million, a 1% decrease compared to the previous period. The company's underlying Group EBITDA was $71 million, and it reported a statutory loss of $9.8 million. ARN's net debt stands at $75 million.

"I firmly believe ARN is the most well-run audio business in Australia demonstrated by our continued success in delivering leading audiences and further growing our audience base by 4% last year," McLennan stated. He also highlighted the extension of contracts for its top rating Breakfast shows in Sydney and Melbourne until 2034 and 2029 respectively.

"The contracts are aligned to ARN's objectives, to incentivise and reward superior performance and we are confident they will deliver increased returns over the period. We maintain strong capital management, as demonstrated by our exit from Soprano which allowed us to fund our investment in SCA. Our balance sheet is strong and the Group's financing facilities have stable tenure and sufficient undrawn limits remaining. The Board remains committed to maintaining strong dividends for shareholders thanks to the high cash generating nature of the business," McLennan added.

Looking ahead, McLennan acknowledged the ongoing challenge of uncertain advertising markets. "Despite this, we are well placed to tackle the year ahead. We are focused on progressing the proposal with SCA, and while market restructuring has been talked about for a long time, the fact remains that today's regulatory environment is not reflective of the market in which Australian media operates and urgently needs government action," he concluded.