Thank you. As we stated in our trading update in May, the COVID-19 pandemic has had a significant negative impact on the group's financial performance for fiscal 2020. Revenues have dropped 13% for the year. All of this decrease occurred in the fiscal Q4, where revenue decreased 57% when compared to the Q4 of the previous year. This shock to the market ruined what was shaping up to be a good growth year for us. Year-to-date revenue for the nine months ending on 31 March was up 2%, despite several million AUD of COVID-related cancellations in the latter half of March. Although we were able to reduce costs during COVID-19 pandemic, not all of the cost reductions had an immediate impact due to the fixed cost nature of our business, the revenue reduction had a significant negative impact on our profitability measures.
There are, however, a number of positive things to report. In Brazil, revenue increased over last year in local currency, despite the impact of COVID-19 pandemic. Brazil was our fastest-growing market by a considerable margin and had achieved nine consecutive months of record revenue prior to the outbreak of the pandemic. Consistent with our growth strategy, we opened Curitiba, our eighth Brazilian market. While Brazil has been especially hard hit by the COVID-19 pandemic, our management and position in this market is strong, and we expect to rebound well when conditions return to normal. After a slow start to fiscal 2020, Canada produced some of the largest revenue months in its history when compared to the same month in previous years. Canada was heading strongly in the right direction prior to the impact of the pandemic.
For the first time in our history, Australia accounted for less than half of the group's consolidated revenue. We believe that the geographic diversification of the group's revenue and earnings is a positive sign for the future. We returned over AUD 16.7 million to our shareholders in the form of dividends and share buybacks during fiscal year 2020, while still maintaining a strong balance sheet. Our strategy to deal with the current difficult environment and put the company in a position to take advantage of stronger markets in the future is to protect and maintain our two most valuable assets, our unparalleled affiliate networks and talented sales and management teams. We've also put in place measures to conserve cash and eliminate expenses where possible.
In order to accomplish this, we have had to make some difficult choices, such as eliminating Nine Radio from our network and reducing the number of our entry-level sales persons. These and other strategic cost reductions, combined with our strong balance sheet, will enable our business to be more resilient during this downturn. At 30 June 2020, our cash balance was AUD 57 million, and our net debt was only AUD 7.4 million. Our total gearing ratio of net debt to adjusted EBITDA was zero point five two times as of 30 June 2020. As part of our cash management strategy, in May 2020, the company refinanced its bank facility that was set to expire in February 2021. Scott will discuss the details of this shortly. As part of the refinance, our lead lender took over the entire facility, which was previously shared by two lenders.
We believe that the bank's willingness to commit additional cash to our bank facility is a strong sign of their confidence in the company. Effective September one, we have appointed Peter Tonagh to our board of directors. Peter has a great deal of experience as a C-level executive with major media companies in Australia, such as Foxtel and News Corp Australia. We believe that his expertise in the Australian media sector will prove especially valuable to our Australian operations, which are the largest part of the group. We look forward to his insights as we navigate the uncertainty brought on by the COVID-19 pandemic. I will now turn the call over to Scott for a complete review of the financials.
Thanks, Bill, and good morning, everyone. Revenue for fiscal 2020 decreased 13% to AUD 160.9 million. Revenue in all of our operating geographies decreased when compared to the previous fiscal year. When compared to fiscal 2019, Australia revenue decreased 16%, Brazil revenue decreased 2%, Canada revenue decreased 19%, and U.K. revenue decreased 6%. Through Q3 fiscal 2020, revenue was up compared to the previous year in all of our markets outside of Australia. Revenue from our Canada and United Kingdom markets was aided by favorable foreign currency movements, while revenue from our Brazilian operations was negatively impacted. When measured in local currencies, Brazil revenue increased 6%, United Kingdom revenue decreased 9%, and Canada revenue decreased 23% compared to last fiscal year.
adjusted EBITDA, which redefines earnings before interest, taxes, depreciation, and amortization, adjusted to include the non-cash interest income generated by the financing component of our long-term station affiliation agreement with Southern Cross Austereo and excludes transaction costs, foreign exchange gains and losses, refinancing losses and gains on lease forgiveness, was AUD 14.2 million, a decrease of 62% compared to fiscal 2019. We consider it appropriate to add the financing component of our long-term station affiliation agreement with Southern Cross Austereo to EBITDA because EBITDA includes a large portion of non-cash station compensation expense related to the agreement. By including both amounts in adjusted EBITDA, we believe it provides a clearer view of the financial impact of the agreement. The decrease in adjusted EBITDA was due to the drop in revenues during the period as operating expenses decreased AUD 0.8 million when compared to the previous year.
The largest component of the expense reduction was sales, general, and administrative, which dropped AUD 3.3 million, 9%, primarily due to lower commissions and bonuses on the reduced revenue. Network operations expenses dropped AUD 0.4 million, 2%, while station compensation increased to AUD 2.6 million, 3%. Station compensation increases included 12 months of Rogers in Toronto compared to eight months in FY 2019, an expansion of the relationship with one of our key affiliate groups in Australia, and additional station compensation in Brazil from new markets. There were no savings in fiscal 2020 related to the termination of Nine Radio as these agreements did not end until July 2020. adjusted NPAT, which is defined as net profit after tax, adjusted to add back the tax affected non-cash amortization expense related to acquired intangible assets, fell 76% to AUD 4.9 million.
The primary driver of the shortfall was the revenue-related decrease in EBITDA that was previously discussed. In May 2020, the company refinanced its bank facility that was set to expire in February 2021. The new facility has no scheduled principal repayments, and the due date has been extended to 30 September 2023. The current interest rate is BBSY plus 2.5%, which is approximately 2.6%. Distributions, including dividends and share buybacks under the revised bank facility, are limited to 100% of adjusted NPAT. Because of this, the earliest the company is likely to be able to make distributions would be after 1H FY2021 reporting in February 2021, should adjusted NPAT be positive for that six-month period. Consistent with our desire to conserve cash and the distribution limitations of the new bank facility, the board has decided to not declare a final dividend for FY 2020.
I will now turn the call back to Bill for an update on fiscal 2021.
Thanks, Scott. While July and August 2020 revenues have decreased sharply when compared to July and August of 2019, the amount of the decrease is an improvement over what the group experienced in April, May, and June. Due to the fixed cost nature of our business model, the improvement in revenue compared to fourth fiscal quarter 2020 will lead to an improvement in EBITDA over that reported in Q4 2020. Future results are likely to be highly dependent on COVID-19 impact on the markets in which we operate. However, when compared to Q4 fiscal 2020 performance, the initial trends for fiscal year 2021 are positive. All four of our markets continue to be positioned to perform well with solid affiliate lineups, strong sales staffs, and virtually no direct competitors.
While the COVID-19 pandemic has had a material impact on our operations and results, we have strategically lowered our costs where possible. We have a strong balance sheet with ample liquidity and believe that we will perform well when markets improve. This ends our prepared remarks, and we will now open the lines to questions.
Thank you. If you would like to ask a question, you are welcome to press star and then one on your touchtone phone. If you wish to cancel your request, you may press star and the two to remove yourself from the question queue. If youre on a speakerphone, please lift the handset to ask your question. Once again, if anyone would like to ask a question, you are welcome to press star and then one. This question is from Callum Zinkler of Macquarie.
Hi, guys. Thanks for taking my questions. Maybe just starting with the macro, can you just speak to the differences between the regions in terms of how COVID has impacted the various ad markets and maybe the kind of booking visibility that you're seeing at the moment across each of those countries?
Yeah, look, it was dramatic in all of our markets, the initial impact. Early in March, we started receiving massive cancellations in all four of the markets. Through April, the cancellations kind of continued, and then things started to ease up a little bit in May, started getting a little bit better in June. So far, July, August, and September, the billing that we're adding is a improvement in all markets over the billing that was added in April, May, and June. It's kind of how we expected it to go. No one had a clue, and none of us still do have a clue. We don't know when COVID will end. We don't know when the markets will come back. Those are all completely unknown. We did our costs significantly. We did prepare ourselves.
We got a strong balance sheet, and we're really positioned to make this to hold out quite a while until the markets do come back.
Yeah, that helps. Maybe just obviously on the cost side of things, clearly there's a big improvement in July and then obviously into August, relative to the final quarter of the year. Just how much of that is both top-line impacts and operating leverage from that versus sharper costs? I guess just trying to understand how much further you might see cost reductions benefit adjusted EBITDA on a monthly basis beyond August, whether it be from nine or other agreements and cost outs.
I'll let Scott talk to the details of the cost cuts. If we do have more that we can cut, we're trying to maintain a balance between keeping decent staff and decent product as the markets come back. And we are seeing positive increases, especially in Canada and Great Britain. We're seeing very decent returns coming there. As far as the specific cost cuts, I'll let Scott tell you about those.
Yeah. I'd say it's probably about AUD 7 million, right off the top of my head, that has not been reflected at all in the numbers. There's some other parts that are maybe partially reflected. There's clearly at least AUD 7 million that have not been reflected at all. It does get a little hard to parse out because some of these things, if revenue increased better than we expected, may come back in, even though, but right now we consider them permanent.
Yeah, that helps. Just to clarify, that AUD 7 million is on a run rate basis for, I guess, looking forward for FY 2021 full year?
Yes, sir.
Yeah. Great. That's fine. And maybe just going back to the forward visibility. I know previously, I know the market's pulled back in terms of the number of weeks out that you can probably see. With the cancellations that happened from some customers in March and April, clearly some industries weren't actually open for business, and they've canceled. I guess based on the conversations that you've had with some advertisers, has some of that budget actually rolled forward into future periods where it's still available to marketing teams? Or is it sort of canceled entirely, and we're sort of entering in, I guess, a completely new budget period for some of these businesses?
Yeah, you've kind of touched them all of those things. Most of the activity we had in Brazil was pretty much canceled, not rescheduled. A little bit was. We've got some fairly major orders in Canada that were put off till later when their stores can open back up. Didn't cancel, just moved them, and that was good. Like Australia with Melbourne on then back off, that one's been up and down. You can't really point to anything, but everything you mentioned happened. Look, we do feel like the environment is improving in all of the places. Maybe people are just getting used to it. The sales environment, the briefings are improving, the contacts improving. So we don't feel we're in desperate straits at all.
That helps. Maybe if I can just ask one last question. Forgive me if it's disclosing the accounts. I haven't got through each page yet. Are you getting JobKeeper in Australia? I'd assume you would be. Is that sort of helping you for this September quarter materially? Any, I guess, help on wage schemes and how you might benefit in this sort of quarter and sort of H1 2021 would help.
That would be the numbers. It is not a big amount because the thing about our business is we are not very labor-intensive. So , but every bit helps. Yeah, Scott.
We also have a similar program in Canada called the Canada Emergency Wage Subsidy. Between the two programs, we had about a AUD 1.4 million pickup. Of that, about AUD 850 was in Australia, and about AUD 500 was in Canada. It was helpful, but certainly not the driver in some of the other places that you've seen. That's why we didn't really highlight it in the results.
Yeah, fair enough. Yeah, thanks for answering those questions. I'll let someone jump on.
Thanks, Zinkler.
Our next question is from Mike Younger of REST Super.
Callum, thank you. Just wondering if you can give us a little bit more of a quantification of how July and August revenues are tracking versus PCP, please.
July and August combined are doing much better than the 50% decrease that we had in the Q4, dipping down into. Every market is different. Australia may be getting into the 40s, whereas Great Britain's only in the 20s, and we even had a month where Great Britain, I think it's July, Great Britain's only down 2%, and Canada's actually got a month that's up. Australia, where our biggest portion of our revenue is still not where we want it to be, but it's improving. Every sign for every month in all the markets is better. We can built our own internal models to see how long we could last under bad circumstances. We're not making projections because it's insane to do so under these conditions. We're doing better than the model that we built.
We're happy with where we're at, and we're happy with what we've maintained from our business. We're happy with the improvement in revenue, and we're happy with our balance sheet that we can hang on for a long time.
Yeah, okay. Can you comment on whether the arrangement with Nine Radio, whether that change in the lineup that you're now offering, early days, but is that having an impact on revenue or rate at this point?
We haven't lost an account yet because of it. It's a very strategic thing that we were looking at anyways because most of the Nine radio stations had lost all of their ratings, and virtually 2GB and 3AW were the only stations left that had significant ratings, but they were much older demographics. By eliminating 100,000 spots of our whole network that were very low-rated stations, and even GB and 3AW didn't have high younger demos, and replacing those spots with things like KIIS and Nova and Smooth, our offering actually became better for advertisers. So we've had a wide range of responses. Some people said that we didn't want those stations anyway. Some people asked if our reach has improved or gone down, and because we're adding more Smooth and Nova and KIIS and all those, actually, our reach is going up.
It was something we'd had in the works for several months anyways, that we had to renegotiate Channel Nine. We'd like to keep them. We'd always want to have all of the stations and all the networks, but during this particular portion of the pandemic, having those stations has no impact on our revenue, but has a material impact on our cost. So it was quite easy to walk away at this point in time, and the goal is to get through this pandemic, survive as strong as we can, and then reload when things come back. In a long way, the cost impact was very beneficial to us getting rid of it. The revenue impact was next to none.
Okay. And I presume that when you talk of the AUD 7 million in costs that have come out of the business, AUD six of that is that Nine agreement?
Yeah.
Yeah.
That's correct.
And I guess just back on the prior question around the July and August trading. We saw the listed radio companies talking to, I think, in the order of a 25% decline as to what they're looking at the moment. Are you suggesting that your business is still down around that 40% mark?
Not in all markets. Every market's really different right now. Like I say, Canada's actually ahead. Great Britain's very close. Brazil is worse, and Australia's improving quite a bit, but not where we want it yet. It's very easy for most people to compare us to radio stations, say you're doing worse than radio stations. You got to remember, we're actually a different product. I guess the analogy I would use, I'll give you analogy, but we don't sell small packages because we make people buy a whole network. So where a radio station can sell a five or a AUD 10,000 or a AUD 20,000 order to somebody, we can't really do that. When things are bad like this, we lose most of our top-end revenue. I'll give you two examples.
If a stock market crashes, and a lot of people lose their money at high income levels, probably the sales of Mercedes-Benz goes down. Whereas at the low end, probably Fiat still sell because they don't care. On the opposite thing, if a factory goes out of business and a lot of people lose their jobs, probably the sales of Fiat go down more, but it doesn't affect the sales of Mercedes. I think that because we're a much more expensive and bigger buy for bigger advertisers, we're tending to get hit a little harder. That's how I would explain it, I guess. We'd be really happy. I think if somebody's doing 25% down right now, they're doing pretty good.
Yeah. Okay. Then your cash flow conversion was exceptionally strong. Is there anything in particular that is one-off or temporary that will reverse into the next period?
I'll take that one. Hopefully, because really the whole cash flow conversion is the fact that we collected our AR. The fact is that will hopefully start to unwind as revenue increases. There will probably be a working capital need, if revenue starts to recover like we hope it will over the next six to 12 months. The actual conversions, what you'd exactly expect is basically, we collected almost all of our AR from the period before the COVID-19, and so that is a very positive thing.
That's the other benefit of having big orders with big companies is your receivables are usually in less stress than a small order.
Right. Thank you very much.
Thank you.
Thanks, Mike.
Ladies and gentlemen, just a reminder, if anyone else would like to ask a question, you're welcome to press star and then one on your touchtone. Pause a moment to see if we have any further questions. As we have no further questions on the line, we'd now like to hand the call back to the Yde for closing comments.
Thank you. Despite the impact of COVID-19, we are confident that we will survive the crisis and return to profitability. We have retained an excellent management team, maintained a strong balance sheet, implemented strategic cost cuts, and these factors position us favorably to capitalize on the expected advertising recovery. We are confident that we have ample liquidity, even if the recovery is slow to arrive. We look forward to speaking to you again after half year fiscal 21 results. Thank you all for attending, and we'll talk to you soon. Bye now.