Whilst 2011 was a year of consolidation, the 2012 financial
year was a year of continued investments by the underlying
businesses of CMH.
In a landmark transaction for the Australasian media sector,
Foxtel was successful in acquiring
100 per cent of the issued shares in AUSTAR for $1.52 per
share, valuing AUSTAR at $2.5 billion.
CMH contributed its share of the Partner funding for Foxtel's
purchase of AUSTAR, or $221.6
million, in April 2012, with the transaction completing on 23
May 2012.
To date, Foxtel has finalised all appointments in the merged
Foxtel-AUSTAR organization, it has closed the AUSTAR
head-office, it has moved to a single and unified Foxtel
brand Australia
wide, and as at June 30 it had delivered annualized savings
in excess of $40 million.
Foxtel once again had a solid year in 2012. Foxtel's EBITDA
result, before factoring in one-off, transaction and
integration costs and before consolidating AUSTAR's result,
of $597.7 million reflected an 8.5 per cent improvement for
the year.
When including the AUSTAR results and costs, Foxtel reported
an EBITDA result of $558.2 million.
Foxtel revenues of $2.2 billion for the 2012 financial year,
which excluded any contribution from AUSTAR, reflected an
improvement of almost 4 per cent year-on-year. Foxtel metro -
that is, Foxtel without factoring in AUSTAR - ended the 2012
financial year with 1.68 million subscribers, a modest
improvement on 2011 but solid nonetheless in tough market
conditions.
When combined with AUSTAR, Foxtel had 2.3 million subscriber
households Australia-wide at
June 30.
Whilst churn in metro areas was higher in 2012 than in 2011
at 13.2 per cent, it remained very competitive when compared
to churn rates internationally.
Foxtel contributed $42.0 million to CMH's 2012 Operating NPAT
result, an improvement of $4.4 million on the previous year,
excluding the impact of AUSTAR. CMH received $60 million from
Foxtel during the 2012 financial year, which included over
$5.7 million in interest on the monies we lent to Foxtel by
way of a subordinated note in April.
Foxtel also continued its investment into product and
innovation, broadcasting the 2012 London Olympic Games via
television, mobiles and a specially created iPad application
which was downloaded by more than 135,000 subscribers. Foxtel
has also continued to introduce a range of new content,
including The Newsroom and new series of Breaking Bad, Mad
Men and Boardwalk Empire.
FOX SPORTS also made various investments in the 2012 year,
focusing on continuing its goal of being the number one
destination for sports fans.
The FOX FOOTY channel was launched in 2012, and broadcast 206
AFL footy games during the regular season and the finals
live, ad-break free, siren-to-siren and in high definition on
the FOX FOOTY Channel and on FOX SPORTS 1.
FOX SPORTS also invested in its facilities in the 2012 year.
From the 2012 financial year, FOX SPORTS will be operating
out of new facilities in both Sydney and Melbourne to ensure
FOX SPORTS continues to provide the best coverage of
Australian and international sport.
With subscriber growth remaining modest in the 2012 financial
year at Foxtel and AUSTAR, FOX SPORTS saw a drop of 1.8 per
cent in its EBITDA result year-on-year to $143.4 million. FOX
SPORTS contributed $49.4 million to CMH's 2012 Operating NPAT
result this year, down
$2.1 million on 2011.
This brings us to CMH's result for the 2012 financial year,
which is covered in some detail in our
Annual Report so I will be brief.
Suffice to say that in what is a tough environment this year,
particularly for media companies,
CMH's 2012 Operating NPAT result of $97.9 million was
satisfactory.
The Statutory NPAT result for the year was $85.8 million,
which reflected a number of items relating to the acquisition
of AUSTAR as well as some costs associated with historical or
legacy matters dating back to when we demerged PBL.
At our full year results, and without clarity on whether
News' indicative proposal announced on June 20, 2012 would
proceed to a formal offer, the CMH Board determined to pay
its shareholders a fully-franked dividend of 6 cents a
share.
The 2012 final dividend was paid earlier this month to those
shareholders on our register on the dividend record date of
Friday September 28.
Copies of previous media and ASX announcements issued by CMH are available at CMH's website at www.cmh.com.au.
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