ASX Announcement: Appendix 4D and Half-Year Financial Report

25 February 2021

Company Announcements Office Australian Securities Exchange Limited Level 6, 20 Bridge Street

Sydney NSW 2000

PRIME MEDIA GROUP LIMITED (ASX: PRT)

Attached is an Appendix 4D and Financial Report for the Half-Year Ended 31 December 2020.

Authorised for release by the Board of Prime Media Group Limited.

For further information, please contact:

John Palisi

Chief Financial Officer & Company [e-mail]02 6242 3810

PRIME MEDIA GROUP LIMITED

363 ANTILL STREET WATSON ACT 2602

ABN 97 000 764 867

APPENDIX 4D

Financial report for the half-year ended 31 December 2020

RESULTS FOR ANNOUNCEMENT TO THE MARKET

31 Dec 2019	Up/(Down)	Movement
$'000	$'000	%
90,846	900	1.0
11,533	7,567	65.6
(5,119)	(695)	(13.6)
6,276	8,593	136.9
(1,713)	2,709	158.1
4,461	5,663	126.9
Franked
Amount per	amount per	Tax rate for
share	share	franking
(cents)	(cents)	credit
Nil	Nil	Nil
Nil	Nil	Nil
There are no dividend or distribution reinvestment plans in operation.
EARNINGS PER SECURITY (CENTS PER SHARE)	Current	Previous
Period	Corresponding
Period
Basic EPS	2.8	1.2
Net tangible assets per security (cents)1	16.4	11.8

All comparisons to the half-year ended 31 December 2019

31 Dec 2020 $'000

Total revenue 91,746

Earnings before interest, income tax, depreciation and 19,100 amortisation (EBITDA)

Depreciation and amortisation expenses

Operating profit

Net tax expense

Net profit attributable to members

(4,424) 14,869 (4,422) 10,124

DIVIDEND INFORMATION

Final dividend 2020 (paid during current reporting period)

Interim dividend 2021 (not yet paid)

This information should be read in conjunction with the 2020 Annual Report for Prime Media Group Limited and its controlled entities and any public announcements made in the period by Prime Media Group Limited in accordance with the continuous disclosure requirements of the Corporations Act 2001 and ASX Listing Rules.

Additional information supporting the Appendix 4D disclosure requirements can be found in the Directors' Report and the consolidated financial statements for the half-year ended 31 December 2020. The financial performance of Prime Media Group Limited and its controlled entities was impacted by the COVID-19 pandemic during the reporting period and commentary has been provided in the Directors' Report.

This report is based on the consolidated financial statements for the half-year ended 31 December 2020 of Prime Media Group Limited and its controlled entities, which have been reviewed by Ernst & Young.

1 Right-of-use assets have been excluded from Net tangible assets.

Your directors submit their report for the half-year ended 31 December 2020.

This half-year report includes the results of Prime Media Group Limited ("the Company") and the entities that it controlled during the period ("the Group"). The Group's functional and presentation currency is AUD ($).

The directors in office throughout the half-year and until the date of this report (unless otherwise stated) were as follows:

Peter J. Macourt (Chair)

Ian R. Neal

Cass A. O'Connor

Ian McGill - appointed 9 December 2020

Joshua Lowcock - appointed 9 December 2020

Ian C. Audsley (Chief Executive Officer)

RESULTS FROM OPERATIONS

STATUTORY RESULT

The Group's consolidated profit after tax attributable to the members of Prime Media Group Limited of $10,124,000 increased $5,663,000 or 126.9% on the prior period. This result included Public Interest News Gathering (PING) grant revenue of $1,791,000 and JobKeeper Payment subsidies of $3,413,000 which have been disclosed as Other Income. The Company was not eligible for subsidies under the JobKeeper Payment scheme after 28 September 2020.

Revenue from contracts with customers of $86,143,000 declined $4,250,000 or 4.7% on the prior period. National advertising revenues declined $445,000 or 0.7% on the prior period, having benefitted from the compressed AFL season and commencement of Test Cricket and the Big Bash League during the reporting period. Local advertising revenues declined $3,527,000 or 14.6% on the prior period due to a decline in consumer sentiment and a general economic downturn as a result of the COVID-19 pandemic.

During the reporting period, the Group maintained a market leading total revenue share of 41.0% in the aggregated regional market of New South Wales and Victoria. The Group's advertising revenue in the aggregated regional market declined 6.1% on the prior period, compared to the market decline of 5.5% in the same period.

Cost of sales, which includes affiliation fees due to the Seven Network under the program supply agreement, declined by $4,190,000 or 8.0% on the prior period as a result of lower advertising revenues.

Total operating expenses of $24,039,000 decreased $2,808,000 or 10.5% on the prior period. Employee benefits expense decreased $916,000 or 5.3% on the prior period primarily due to measures taken as a result of the COVID-19 pandemic including key management and directors agreeing a temporary reduction in base salary and employees reducing work hours for a 3 month period ending September 2020. The prior period included one-off non-recurring costs associated with the proposed scheme of arrangement with the Seven Network of $1,525,000.

The Group's share of losses from joint ventures that broadcast Nine Entertainment programming in regional Western Australia and Mildura was $171,000. During the reporting period Nine Entertainment served notice on both joint ventures that the respective program supply agreements would end 30 June 2021. As a result, the Group's interests in these joint ventures has been fully impaired.

Finance costs of $152,000 relate to lease interest and commitment fees for an undrawn debt facility with the ANZ bank. The undrawn facility limit at the reporting date was $10 million.

At 31 December 2020 the Group had cash at bank of $31,422,000 and no interest bearing debt. Net cash flow from operating activities of $16,522,000 increased $2,929,000 or 21.5% compared to the prior period. During the reporting period the Group received one-off non-recurring payments for JobKeeper Payment subsidies totalling $4,400,000 and PING grant revenue of $4,233,000. The Group's net cash flow from operating activities excluding government subsidies of $7,889,000 declined $5,704,000 or 42.0% on the prior period. In the prior period the Group paid one-off non-recurring costs associated with the proposed scheme of arrangement with the Seven Network of $1,060,000. Net cash flow used in investing activities increased by $1,476,000 on the prior period and primarily related to the purchase of transmission and computer equipment. Included in the prior comparative period were net loan funds received from related parties of $450,000.

DIVIDEND

During the reporting period the Company's net cash position improved as a result of government grant funding, the temporary reduction in employee costs and deferral of other activities as a result of the COVID-19 pandemic. The Company announced at the 2020 Annual General Meeting that it was exploring opportunities to diversify its revenue base. This decision has been taken due to the significant uncertainty in regional advertising markets. In light of the above, the dividend program remains suspended at this time. The Board is mindful of shareholder expectations for reinstatement of the dividend program, which will be reviewed with the full-year results.

NET PROFIT BEFORE SPECIFIC ITEMS AND AFTER TAX

The Group has historically provided a reconciliation of core net profit before specific items and after tax to statutory net profit after tax. However, the Group's core net profit after tax has been significantly impacted by the COVID-19 pandemic and government assistance during the reporting period. Provided in the table below are details of specific items for the reporting period. In addition to these specific items, the Group made additional temporary operational changes in response to the pandemic that reduced operating expenses.

31 DEC 2020	31 DEC 2019
$'000	$'000
	Redundancies	-	18
	Non-recurring legal and consulting expenses	-	1,525
	PING grant revenue	(1,791)	-
	JobKeeper subsidy	(3,413)	-
	Employee cost savings including JobKeeper stand down directions	(379)	-
	Expected credit loss adjustment	(418)	(24)
	Impairment of investments in associates	171	-
	Income tax expense/(benefit) related to specific items	1,749	(456)

ROUNDING OF AMOUNTS

The amounts contained in this report and in the half-year financial report have been rounded to the nearest $1,000 (unless otherwise stated) under the option available to the Company under ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191. The Company is an entity to which the Class Order applies.

AUDITORS INDEPENDENCE DECLARATION

The Directors have received and are satisfied with the 'Audit Independence Declaration' provided by the Company's external directors, Ernst & Young, which is included on page 3.

SUBSEQUENT EVENTS

There were no subsequent events after the reporting date that required disclosure.

C.A. O'Connor

Director

Sydney, 25 February 2021