I would now like to hand the conference over to Mr. Vic Lorusso, the CEO. Please go ahead.
Thank you, and thanks everyone for joining us today. I want to start by being direct. The first half of FY26 was a tough period for GTN, and our results reflect that. It was also a period where we made some hard, necessary decisions to reset the business for the future. Market conditions remain challenging, particularly in our key markets, but rather than waiting for conditions to improve, we've taken decisive action on costs and our affiliate arrangements and on how we go to market. I'll come back to that shortly, but first, let me hand over to Ben Brooks, our Chief Financial Officer, to take you through the financials.
Thanks, Vic. I'll take you through the numbers for the half, which, as highlighted by Vic, was a tough six months, particularly in the first quarter. Financial performance. Revenue came in at AUD 82.5 million and adjusted EBITDA at AUD 5.8 million, down 15% and 53% respectively on the prior corresponding period. The first quarter bore the brunt of the market pressure. While that's not where we want to be, conditions did stabilize as the half progressed. We also recognized a non-cash impairment charge of AUD 41.5 million during the period, relating to our Australian and UK businesses. This reflects a pragmatic reassessment of near-term forecasts, given the macroeconomic environment in those markets. It's a non-cash item. Has no bearing on our day-to-day liquidity. Capital management and shareholder returns. Despite the revenue challenges, we've kept a tight focus on cash.
Cash on hand increased to AUD 28.1 million at 31 December, up from AUD 21.1 million at 30 June. Underpinning this is AUD 16.5 million in net operating cash flow, a significant improvement from the negative AUD 2.8 million in the prior corresponding period. During the half, we also returned AUD 43.9 million, AUD 0.23 per share to shareholders via a return of capital paid in August 2025. Net debt sits at approximately AUD 7 million, which is manageable and a function of that capital return. We're comfortable with where we sit on the balance sheet. Interim dividend. The board has declared an interim dividend of AUD 0.01 per share, unfranked. We're pleased to be able to do that given the operating environment, and it reflects the board's genuine confidence in the underlying strength of the business.
The board is committed to further shareholder returns. We will continue to pursue further returns as conditions allow. I'd like to hand back to Vic.
Thanks, Ben. What are we doing about it? Well, I want to walk you through three areas where we've taken decisive action. First, as Ben mentioned, costs. We've targeted annualized cost out for FY27 of AUD 12 million-AUD 17 million, and we're making some real good progress. On affiliates, we've renegotiated significant arrangements with the majority of our AUD 7 million-AUD 9 million annualized target already executed, effective January 2026, a meaningful step. On aviation, we've exited those operations entirely. That decision will deliver approximately AUD 3 million-AUD 5 million in annual savings from the second half onwards, and the sale of the helicopters will bring in around AUD 5 million in cash proceeds this financial year, most of which has already been received in early 2026.
On operating costs more broadly, we're driving efficiencies through AI, comprehensive cost reviews, and improved sales systems, with an expected AUD 2 million-3 million in annualized savings being realized progressively through the year. Second, market repositioning. We're changing how we go to market, really focusing on direct client relationships, making better use of our unsold inventory to improve margins, and working with agency partners to access new client pools. These initiatives are already underway, and we expect the benefits to build through the second half. Third, our strategic priorities. Everything we're doing ties back to three things: strengthening our core affiliate partnerships, delivering a compelling proposition to our advertising partners, and actively managing costs through technology, including AI. Before I open the floor to questions, I'd like to acknowledge Peter Tonagh, our Chair, along with our board and our shareholders.
Thank you for your continued support and guidance. We value the trust you place in us, remaining focused on delivering improved performance and long-term value. I'd also like to recognize our GTN team across all markets, particularly our country heads, for their leadership on the ground. It's been a period of change, and our people have remained focused, committed, and professional throughout. Strong local execution is critical to our success, and we appreciate the accountability and drive shown across the business. While I'm relatively new to the GTN CEO role, but having been part of this business for over 25 years, it gives me confidence in the direction we're taking. We have strong board and shareholder alignment, experienced country leadership teams, and a clear plan that we're executing against.
The second half of FY26 is where you'll start to see the benefits of the work done in H1 come through. With that, we're happy to open the floor to questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from John Burgess with RaaS Research. Please go ahead.
Good morning. I'm just interested if there's been any sort of change in the affiliate relationship agreements post the Southern Cross merger with Channel 7?
No, not with the merger, Channel 7 SCA agreement. You know, that was obviously a long-term agreement. No, not in relation to that, those, that affiliate, no.
Okay, thanks.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. There are no further questions at this time. I'll now hand back to Mr. Lar usso for closing remarks.
Thank you again. Thank you for your continued support as shareholders. We look forward to delivering the second half. Have a great rest of your day.