Good day, and welcome to the GTN Limited Fiscal Year 2023 Earnings Conference Call. Today's conference call is being recorded. Representing the company today are Scott Cody, Chief Financial Officer and Chief Operating Officer of GTN Limited, and Vic Lorusso, Chief Executive Officer of the Australian Traffic Network. Before I turn the call over to Scott, I would like to remind the listeners that this call is subject to the disclaimer and important information included in the fiscal year 2023 earnings presentation. With that, I'll turn the call over to Scott Cody, Chief Financial Officer and Chief Operating Officer. Scott?
Thanks, Brianna, and thanks everyone for joining us this morning. I have with me Vic Lorusso, Chief Executive Officer of our largest operating division, the Australian Traffic Network. I will first read some brief prepared remarks, then we will open the phone lines for your questions. FY 2023 was another year of solid progress and results. Group revenue increased 11% compared to FY 2022. This is our second consecutive year of double-digit revenue growth. The revenue increase led to a 13% increase in adjusted EBITDA when compared to FY 2022. We define adjusted EBITDA 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 exclude transaction costs, foreign exchange gains and losses, refinancing losses, and gains on lease forgiveness.
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 amount of non-cash station compensation expense related to the agreement, and by including both amounts in adjusted EBITDA, we believe it provides a clearer view of the financial impact of the agreement. If both FY 2023 and FY 2022 results are adjusted to exclude the government subsidies of JobKeeper and Canadian Emergency Wage Subsidy, which ended in FY 2022, the one-time costs related to the departure of our former CEO and managing director and the negative EBITDA related to the Global Drone Network startup losses, adjusted EBITDA would have increased 32% over FY 2022.
We feel it's appropriate to add back the drone operation losses because although they are a P&L item for financial statement purposes, we believe they should be considered an investment. Australia revenue increased 13% over the prior year, which was our second consecutive year of strong revenue growth as revenue increased 14% last fiscal year. Our sales significantly outperformed our peer group for FY 2023, based on published industry data. The Australia results are most welcome as this is our largest and most profitable market. Canada performed very strongly in FY 2023, with revenue increasing 28% compared to FY 2022, 25% in local currency, which resulted in the highest revenue ever achieved by the market. This outstanding revenue performance led to significant EBITDA growth, with FY 2023 EBITDA growing to CAD 5.6 million from CAD 1.2 million in FY 2022.
We are very encouraged by the progress that Canada has shown, as we are once again demonstrating the potential that was evident prior to the pandemic disruption. Brazil achieved our largest revenue increase, with revenue increasing 30% compared to FY 2022, 19% in local currency. The increase in revenue contributed to additional EBITDA, which was slightly below breakeven for FY 2023, representing significant improvement over the past several fiscal years. We continue to be optimistic about the long-term prospects for our Brazil business. United Kingdom revenue decreased 8% compared to FY 2022, 6% in local currency. While disappointing, it should be noted that previous year's revenue was the highest ever achieved in the market in local currency, and the U.K. was our only market to post revenue growth in both FY 2021 and FY 2022.
Our revenue in the market was negatively impacted by a difficult trading environment, especially over the last quarter of the fiscal year. Although down from FY 2022, our U.K. business continues to deliver solid performance and remains a meaningful contributor to the group's financial results. The strong performance of our core businesses allowed us to invest in Global Drone Network while still increasing group-adjusted EBITDA. During the second half of FY 2022, we began offering drone light shows for both advertising-supported shows and cash fees. Drone light shows involve the operation of many drones simultaneously to create images that are viewed by audiences in a manner similar to traditional firework shows. We performed over 40 shows during FY 2023, including Vivid, the Australian Open, Christmas at Cockle Bay Wharf, and the Sydney Royal Easter Show.
We have made great strides in this business, establishing our ability to perform highly entertaining shows and confirming there is a strong demand for these shows. Our plan for FY 2024 is to concentrate on staging shows with a high probability of meaningful revenue as we transition into the next phase of our drone business plan. During FY 2023, we returned over AUD 11 million to our shareholders in the form of AUD 5.8 million of dividends, final FY 2022 and interim FY 2023, as well as repurchasing over 11 million of our outstanding shares. Over 5% of the shares outstanding at the beginning of the fiscal year for AUD 5.4 million. The group has extended its current debt facility to 22 December 2025 during the past fiscal year. Previously, the debt facility was scheduled to mature on 30 September 2023.
Other than the repayment date, there were no material modifications to the previous debt facility. We repaid AUD 6 million on our debt facility during FY 2023. We have repaid AUD 36 million of the debt facility over the past three fiscal years, reducing the amount outstanding from AUD 60 million to AUD 24 million, while continuing to maintain a pristine balance sheet. At 30 June 2023, our cash balance was AUD 30.6 million, and our net cash, including lease liabilities recognized under AASB 16, was AUD 3.4 million. Today, the company announced that it has recommenced its on-market share buyback of up to 10% of its outstanding shares for a period of up to 12 months. No target share price or minimum repurchase amount has been set. The board remains committed to a meaningful share buyback.
With regards to the start of FY 2024, revenue for July, August 2023 is largely in line with last year. Revenue from our Brazil and Canada operations continue to show strong growth, while Australia and the United Kingdom are pacing behind the same period last year. We have also implemented cost reductions in FY 2024, which we expect to have positive impact on future results. However, due to the short lead time of group sales cycle, it is not possible to forecast revenue for the remainder of FY 2024. This ends our prepared remarks. We will now open the lines to questions.
At this time, if you would like to ask a question, please press star, then the number one on your telephone keypad. To withdraw your question, again, press star one. Our first question comes from Conor O'Prey with Canaccord Genuity. Your line is open.
Hi, Scott. A question just on the, on the drone business and how maybe the economics of that work. Is that mostly a fixed cost business, or now it's a question of driving revenue? Are there variable costs in there that sort of, work on a sort of constant gross margin? How does that... Can you maybe help understand a little bit how that works?
Sure. Basically, there is—it's more, there's more of a variable cost than there would be in our existing traffic business, because each show has costs related to it. And I'm actually going to let Vic talk to you about that a little bit. But basically there are more costs for, like, sites and things like that. Vic, maybe would you like to, like, you know, kind of go through some of the costs that we incur on an average show?
Sure. So for example, if we're doing site-specific shows for events, as in Vivid, that just passed, obviously a lot goes into securing the location, the barges, how many drones we actually need, the staff and personnel. So every single show we do from a location point, site-specific, incurs different fees. The Easter Show, for example, this year, it's the same location, same area for 14 nights, so it's really mainly personnel. There's no leasing of any equipment. It's out there on a, you know, big paddock that we take off with 200 drones and return back. So, it's pretty much location and show specific on what the cost basis is per show.
So do you know approximately what a break-even level of revenue looks like for that business? Sort of the zero or break-even EBITDA level?
Yeah, I mean, not exactly yet. You know, there was, you know, and the reason I say that is because I think we probably cast too wide of a net last year. So we're still trying to really focus so on, you know, I think the break-even number is lower than it was for FY 2023 because of the fact that there's certain things we're just not gonna do. I mean, we did a show at the Isle of Wight, which, you know, may have been great for publicity, but, you know, was pretty expensive with no upside to us, revenue-wise. So we're gonna be more, you know, just more selective.
I would think, rough, rough, rough, and probably be giving a much better answer in February on this one, you know, probably in the, you know, three millish range, I'm guessing. But, you know, that's, that's, you know, that's very, very, you know, loosey goosey in terms of an answer.
Thank you.
Thanks a lot.
Our next question comes from Killian Murphy with MST Financial. Your line is open.
Hi. Morning, guys. Thanks very much. Just on current trading and the difference between, say, Australia and the UK, seeing some revenue challenges versus Brazil and Canada, can you maybe go into more, a bit more detail on what's going on there, and how we can monitor that as the year goes on?
Yeah, sure. You know, you know, it's gonna sound like a cop-out, somewhat, but, you know, the markets have been very tough in both, both places. I mean, there's just... Obviously, in Australia, you've seen a lot of releases from, from other, other broadcast and media companies. It's just, it's just a very tough market. So you know, we think obviously we can always do better, and we need to focus on, you know, getting whatever money's out there and, you know, we have an awesome product and an awe- and awesome networks, so we should always get more than our fair share. But we think a lot of it is market driven, but we're certainly not just sitting around and, and accepting that as an answer.
Vic, do you want to talk a little bit what you guys are trying to do in Australia to try to draw some revenue?
Absolutely. So we've completely reengaged our sales team from a local level, Conor and from Killian, from you know, from what we've done here in Australia in the last 6-8 weeks, reengaging the market with our sales team. From going to market, we offer a complete different product to what radio stations offer or in content medium of you know, highly significant audience share, BMAD, breakfast, morning, afternoon, drive inventory, and just you know. Yes, it is a tough market, but there are pots of gold out there. We've surfaced some in the last couple of weeks that we're encouraged about and excited. We've seen a you know, a big uptick back in the automotive trade. Travel's been really, really good to us.
And there's definite opportunities of green shoots, and we've got, we believe, the best product out there to overcome these times.
... Thanks for that. That's, that's very helpful. Maybe just one follow-up, and probably for Scott. Just in terms of cost reductions, just looking at note 29 in the accounts, when you, you break out Adjusted EBITDA, and you have the other cost of, say, -AUD 6.2 million for FY 2023, what should we be thinking for FY? Is that where we're going to see the cost reduction come through, is it in that line, or is it going to be within the divisions? And, you know, can you give us a ballpark range of what you might expect, or is it too early?
It's a little premature for a range, I think, but yeah, I think you're gonna see it broad, fairly broad-based between our corporate overhead and Australia. You know, those markets were, you know, obviously, where most of our expenses kind of come through. Well, Australia is where most of our expenses come through. So we think that, you know, that, yeah, there's some work to be done there. We have done some work there, and then the corporate overhead with the new kind of way of doing things is gonna be, you know, at a lower cost, for sure.
Okay. That's great. Thanks very much, Scott. Much appreciated.
Thanks, Killian.
Thank you, Killian. Appreciate it.
Again, if you would like to ask a question, please press star, then the number one on your telephone keypad. Seeing no further questions at this time, I will now turn the call back over to Scott Cody.
Thanks. We are pleased with FY 2023 performance and remain confident about the future. We have retained our excellent local management teams, maintained a strong balance sheet with ample liquidity, implemented strategic cost reductions, and made significant progress with our new growth initiatives. All four of our markets continue to be well-positioned, with solid affiliate lineups, strong sales staffs, and virtually no direct competitors. We believe that everything is in place for continued strong financial performance. We look forward to speaking to you again after the fiscal 2024 half-year results.
Thank you for joining us today. This will conclude the conference call. You may now disconnect.