Perhaps surprisingly, shares of Southern Cross Media Group Ltd (ASX: SXL) are today trending over 11% higher following the announcement of its half-yearly results.
In the six months to 31 December 2014, Southern Cross' revenue fell to $307.6 million, down 7.3%, whilst net profit after tax, or NPAT, came in at $34.7 million, down 24.4% on the prior corresponding period.
Southern Cross finds itself on the unfortunate end of technological disruption with its radio and television assets bleeding profits, leading to a share price decline of over 78% in the past 10 years.
Commenting on today's results, CEO Rhys Holleran said, "The first half results for FY 2015 reflect challenging conditions in television advertising markets and a reduced metro radio market share."
He added, "In 2015, we are strengthened by the talent line ups in metro radio and are confident that the strategic direction of the company and the focus on debt reduction will put the company in a sound position to improve over this financial year and the next."
During the half year, Southern Cross' net debt dropped $14.8 million to $573.1 million, whilst the board announced an interim dividend of 3 cents per share, down from 4.5 cents per share in the prior corresponding period.
Should you buy, hold or sell Southern Cross shares?
Despite its share price falling 28% in the past year, at today's price of $1.04, Southern Cross still doesn't appear cheap, if you're looking to make market-beating returns over the next five years. With dwindling revenues and profits, investors should demand a wide margin of safety on its market price before hitting the buy button, given the uncertainty that lays ahead.
