Southern Cross impresses investors

Southern Cross Media Group (ASX: SXL) announced a net profit after tax (NPAT) of $96 million today, slightly ahead of guidance and the prior year. The group declared a final fully franked dividend of 4.5 cents per share taking the full year payout to 9 cents. That’s a dividend payout ratio of 66% on reported earnings of 13.6 cents per share.

The operating environment remains difficult and the group conceded ‘on-air incidents’ affected metropolitan radio share and advertising revenues. A scandal erupted last December after two 2Day FM presenters phoned a London hospital impersonating the Queen and Prince of Wales. Short-term tomfoolery like this should not concern investors focused on the long-term though.

The group attributed a revenue decrease of 5.4% to underperformance in its television business. It signed a three-year affiliation agreement with the Ten Network (ASX: TEN) recently and will be hoping Ten’s ongoing makeover delivers improved results in terms of future audience and revenue share.

The group also looks set to benefit from regulatory change in the near future, with the proposed abolition of the audience ‘reach rule’ that prevents broadcasters reaching more than 75% of the population.

Foolish takeaway

The slight increase in net profit has given the share price impetus. The group continues to carry significant balance sheet debt however and needs to keep delivering positive results for a while yet.

Interested in our #1 dividend-paying stock? Discover The Motley Fool’s favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of “The Motley Fool’s Top Dividend Stock for 2013-2014.”

More reading

Motley Fool contributor Tom Richardson does not own shares in any of the companies mentioned in this article.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!