Good day. Welcome to the GTN Limited 2019 year-end earnings conference call. Today's conference is being recorded. Representing the company today are Bill Yde, Managing Director and Chief Executive Officer, and Scott Cody, Chief Financial Officer and Chief Operating Officer. Before I turn the call over to Bill, I would like to remind the listeners that this call is subject to the disclaimer and important information included in the company's year-end earnings presentation. With that, I turn the call over to Bill Yde, Managing Director and Chief Executive Officer. Bill?
Thank you, thanks to everyone for joining us this morning. Revenue from continuing operations remained unchanged at AUD 185 million, with all three of our operating geographies outside of Australia being up over fiscal 2018. Australia revenue declined 7% compared to the previous year. Revenue for our non-Australian markets increased 8% compared to fiscal 2018. For fiscal 2019, 49% of our revenue was generated outside of Australia. The decrease in revenue in Australia, combined with higher expenses, led to decreased EBITDA and adjusted EBITDA. Australia, our largest, most established, and profitable market, had a difficult year. After a strong first quarter, Australia revenue was down almost 7% compared to fiscal 2018. This was due in part to difficult market in general, and as previously advised, the loss of several key clients. We've taken a number of steps to reverse this trend.
These include hiring a Manager focused exclusively on our television revenue, as well as a dedicated Manager focused on advertising accounts that have not yet engaged ATN, employing more sales representatives, and promoting Marketing Strategy Director Kelly Mcllwraith to Commercial Sales, Marketing, and Strategy Director. Kelly now has responsibility for all Australia revenue. She previously focused on enhanced research initiatives such as the successful rollout of Neuro-Insight to numerous GTN clients. Our network continues to have a strong position in the major metropolitan markets in Australia, and we expect to be able to stabilize revenue into the future and return to growth. Canada was up 11% over fiscal 2018. EBITDA declined for the period, primarily due to the additional costs related to signing a multi-year contract with Rogers in Toronto to become a radio and television affiliate.
We believe that this contract contributed to our strong growth in the second half of fiscal 2019, as revenue increased 10.4% for the period in local currency, which was the highest growth in the group. We expect that the Rogers contract will generate additional revenue in the future, as it significantly strengthened our network in Toronto, which is the largest and most important market in Canada. We've also added valuable inventory from our existing affiliates, as well as entering new affiliation agreements, and we believe that this will help to fuel future growth in Canada. Our U.K. operations had a solid 2019. Revenue increased 7%, which led to solid EBITDA growth. Despite the challenging environment, our U.K. operations continue to be a steady, reliable source of cash flow for the company. Our Brazilian operations continue to progress nicely.
Revenue increased 12% in local currency compared to fiscal 2018, which was the highest growth achieved by any of our markets. Unfavorable exchange rate movements reduced this growth to less than 4% in Australian dollars. EBITDA decreased for the period as we continued to reinvest in the market. During the period, we opened both Campinas and Brasilia, bringing the number of our Brazilian markets to seven. In line with our growth strategy for Brazil, we plan to open the Curitiba market soon. We will continue to invest in Brazil as we see the potential upside to be significant, but future market expansions will not likely result in a meaningful increase to expenses. I will now turn the call over to Scott for a complete review of the financials.
Thanks, Bill. Good morning, everyone. Revenue from continued operations remained unchanged at AUD 185 million. Revenue from all of our operating geographies outside of Australia was up over fiscal 2018. When compared to fiscal 2018, Brazil revenue was up 4%, Canada revenue was up 11%, and U.K. revenue was up 7%. Australia revenue decreased 7% compared to fiscal 2018. Adjusted EBITDA, which we define as 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 excluding transaction costs and foreign exchange gains and losses, was AUD 37.5 million, a decrease of 22% compared to fiscal 2018. This was consistent with our trading update forecast of AUD 37 million-AUD 38 million from 26 June 2019. Adjusted EBITDA was down due to higher expenses.
The largest component of the expense increase was station compensation. Some of the causes of this increase were additional station compensation associated with a renewal of a key affiliate group in Australia, the Rogers Toronto affiliation in Canada, and an increase in variable compensation in the United Kingdom due to higher revenue, as well as market consolidation and additional compensation in Brazil related to both opening new markets and expanding existing markets. 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.
Adjusted NPAT, which is defined as net profit from continuing operations after tax, adjusted to add back the tax affected non-cash amortization expense related to acquired intangible assets, was AUD 20.3 million, a decrease of 31%. In addition to the shortfall in adjusted EBITDA, adjusted NPAT was negatively impacted by AUD 1.3 million of additional depreciation expense in fiscal 2019 related to the adoption of AASB 16 leases. The company continues to have a strong balance sheet with AUD 50.7 million of cash, AUD 63.6 million of debt, including leases, and AUD 12.8 million of net debt at 30 June 2019, after paying out over AUD 30.1 million of dividends during the fiscal year. Total gearing of adjusted EBITDA to net debt was 0.34 times as of 30 June 2019. The board has declared a final dividend of AUD 0.032 per share to shareholders of record on 6 September 2019. This dividend will be 70% franked.
The share buyback, which commenced in February 2019 and was suspended as required in the period leading up to our full year-end results, will recommence after this blackout period has been lifted. I will now turn the call back to Bill.
Our core markets continue to be very attractive networks that remain an extremely effective advertising medium. Nothing has changed. While we are disappointed with our recent performance in Australia, we remain excited by the opportunity in our current markets. We plan on continuing our work to maximize the potential of these markets. This ends our prepared remarks. We will now open the lines to questions.
Thank you so much. Ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask a question, you will need to press star and one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the hash key. Once again, it's star and one if you wish to ask a question. Our first question comes from the line of Julian Mulcahy from Evans and Partners. Julian, your line is now open.
Hi, guys. Just, Bill, I want to just maybe start with the Australian business. Are you still of the view that it's been a series of own goals and account loss rather than anything cyclical and structural and therefore the operational leverage on the upside should still exist?
Yeah. I believe that we still have upside. Clearly, the markets have been very, very difficult. We've had to make some internal changes to try to take more advantage of our strengths. Our biggest strength is that because we're a conglomeration of all of the stations giving us a mass share of all of the demographic markets, we have no limitation to any specific advertiser group in the country. When we own a mass portion of the demographics of every potential demographic, every potential advertiser in the country is a potential advertiser for us. Through last September, we were clicking along so well, and all of a sudden, the markets became extremely difficult. Most of the people that we had on our staff had been successful for a long time, managing the accounts that they had and were really not geared to going out and getting new advertisers.
What we've done is a lot of these changes just happened recently. We've geared it up to start a whole new staff, which exists exactly like it did when we started this company. When we started this company, we didn't have any advertisers, and everybody had to go out and farm new advertisers. The existing staff we have, because they're very successful and have a lot of advertisers and takes a lot of time to farm new accounts, don't have the time available that they had in the early days. This new group of what we call farmers is going to be key to the success as they generate more revenues from new accounts that aren't on. We have a better chance of recovering from the difficult times than if we were very narrow demographically challenged. It's a long answer, but I feel we still have upside.
I feel that the conversion and the difficult times are going to still take a toll on us for a while, and being compared to the first quarter of last year, which was very strong, it's not attractive, but we believe that we've made the changes. We don't believe that we're pigeonholed into a death spiral where revenue goes down and down.
Right. I mean, on first quarter's going to be tough comp, it should get very easy thereafter, sort of double-digit decline.
Yeah.
You would expect reasonable growth this year with not much increase in cost, so we should get that operational leverage on the upside?
Yeah. Look, it's too early to tell. It would be reasonable to expect that the September quarter would be down and that the December quarter would be up. That would be our expectation. We're not really giving any numbers to that yet. By the time we get to our AGM, we hope we'll have a little better handle on numbers to give people.
All right. Just on Canada, with the benefit of having Rogers there, what's it done to prices, or what did you exit at in terms of price increases overall?
Look, we're getting better rates in Toronto. Sometimes as much as 10% better rates just in Toronto alone. As you know, we have new management starting in Canada soon. We've made some changes in Canada as well as increasing the size of the sales staff. Some of these changes will take a while to get hold, but we're comfortable that Canada will start looking better now.
Right. Just on Brazil, you said that you can expand without adding much in the way of cost now, so profits should start to grow again as the expectation?
Yeah. Look, all of the expensive markets we're in. We're opening in the Curitiba market in fairly soon. We're not putting helicopters up there. It's more light staff. Each of the markets we'll add from now on won't have the expenses that all of the markets have that we've added in the past. The expensive part of building Brazil is over. We may add affiliates from time to time, but we believe that for the next few years, Brazil should start generating higher and higher EBITDA numbers.
Okay. Thanks, Bill.
Thank you.
Thank you so much. Once again, ladies and gentlemen, if you wish to ask a question, it's star and zero on your telephone keypad. Once again, it is star and one if you wish to ask question. All right, our next question comes from the line of Richard Chu, a Private Investor. Richard, your line is now open.
Just a question on ongoing dividends. What can we expect in terms of, you've announced AUD 0.03 now. Going forward, approximate amount of dividends going forward, what would you estimate that to be?
The board has not made.
So that's gonna be-
Go ahead, Scott.
That's going to be driven by the earnings. Basically, our policy is to pay out 70%-90% of NPAT.
Right.
That has not changed. It's going to be driven by the earnings.
Okay. Thank you.
May be affected somewhat by the amount of cash we put into the stock buyback.
Okay. Thanks very much.
Thank you.
Thank you so much. Once again, it's star and one if you wish to ask a question. There are no further question at this time. Speakers, you may continue.
Thanks, everyone, for joining this morning. We remain committed to maximizing the potential of our markets and creating shareholder value, and look forward to speaking to you again after first half 2020 results. Thank you.
That does conclude our conference for today. Thank you for participating. You may all now disconnect.