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Under the terms of the cash deal signed on Thursday, TAB NZ will acquire the company’s digital and audio businesses, including the SENZ brand, app and website, alongside its network of 28 radio stations. SEN is offloading the NZ assets just two years after entering the market.
The company booked a $5.5 million impairment on the broadcasting and media assets in New Zealand in the most recent financial year, with a $2 million loss in 2022. Advertising revenue from the market netted just under $5 million compared with the $69 million delivered by the company’s Australian assets.
The company will retain its New Zealand sports assets, which include the Otago Nuggets and Southern Hoiho basketball teams
The purchase is subject to legal agreements and is expected to be completed by February 1. As part of the deal, all programming from SEN’s Australian business will be made available on SENZ frequencies, with SEG to retain some commission from advertising revenue on the New Zealand network.
Coleman said the transaction removed start-up losses from the company’s operating performance, with the New Zealand business representing a $2.4 million drag on its underlying earnings before interest, taxes, depreciation and amortisation.
“SEG continues to focus on reducing net debt in FY24.”
The company said neither Hutchison nor Coleman was available for comment.
SEG’s share register is tightly held, with fewer than 800 shareholders. Between Coleman (also co-founder and managing partner of SEG’s largest shareholder, Viburnum Funds), fellow board director Ronald Hall, racing analyst for SEN John “Dr Turf” Rothfield and Hutchison sits 59.2 per cent of SEG’s share register. Almost 89 per cent is owned by the top 20 shareholders.
Hutchison commented on the company’s financial status on his Sounding Board podcast this week, also responding to recent media reports.
“Six years ago, we were a series of relationships. Now we’re a series of assets and relationships. That’s been a build and a transformation. Would we like to get our debt down a bit? Yes, we’ve been public about that being part of our strategic agenda.”
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Alongside its New Zealand operations, SEG has made major investments in the acquisition and expansion of a number of assets. In 2020, the company acquired a bundle of radio assets including the 2CH licence in Sydney for $11.2 million. It paid $12 million for the licence for 4KQ in Brisbane in 2022.
“If you are in 2024 and don’t have a Sydney asset in your media mix as a national advertising brand, I am not sure what the future looks like without that investment,” Hutchison said on Sounding Board this week. In 2022, he said the 4KQ acquisition gave SEN an immediate foothold in Queensland’s largest market, also becoming the only dedicated sports station in the state.
Neither station has managed to establish a solid foothold in the NRL-dominated markets. In its first survey as SENQ in September 2022, the former 4KQ opened with a 0.4 per cent share, a drop from 9.4 per cent in 4KQ’s final survey on the same bandwidth.
In the most recent survey this month, the station sat at a 0.6 per cent share, while Triple M, which aims for a similar 25-54 male audience with its rock, comedy and sport focus, netted an 11.8 per cent share.
Nine Entertainment, the owner of this masthead, owns a 3 per cent stake in SEG via 3AW.
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