Good morning, everyone, and welcome to the Annual General Meeting of Southern Cross Media Group Limited. My name is Heith MacKay-Cruise, Chair of SCA. I joined the board in October 2020 and became Chair of SCA in March 2024. I'm joining you today from Sydney and would like to begin by acknowledging the traditional custodians of the land on which we meet today, the Gadigal people of the Eora Nation. I pay my respects to their elders, past, present, and extend that respect to all Aboriginal and Torres Strait Islander people joining us here in Sydney or elsewhere as part of our virtual meeting. I've been informed that a quorum is present, and I'm pleased to officially declare the meeting open. Thank you for joining us today. Today's meeting is being held in person at 52 Goldburn Street, Sydney, and virtually using an online platform provided by Computershare.
This platform allows shareholders, proxies, corporate representatives, and guests to attend the meeting remotely by watching a live webcast of the meeting. In addition, shareholders, proxies, and corporate representatives can ask questions and submit votes in real time. To allow sufficient time for those participating online to ask questions or vote, I now declare voting open on all items of business. I will provide an opportunity for those in the room and online to ask questions and vote later in the meeting. Before moving to housekeeping matters, I would like to ask my fellow directors to introduce themselves to you. Ido.
Thanks, Heith. Hi, everyone. I'm Ido Leffler. Like Heith, I joined the board in 2020 and was most recently re-elected by shareholders at the 2023 AGM. I'm a member of the board's Audit and Risk Committee and the People and Culture Committee. I look forward to telling you more about what I will be bringing to SCA when I submit myself for re-election later in the meeting.
Hello, everyone. I'm Marina Go. I chair the People and Remuneration Committee for Southern Cross Austereo . I joined the board in October last year, was elected last year, and I thank you for your support.
Good morning, everyone. I'm John Kelly, SCA's CEO and Managing Director. I've been with the company since 2016 and been Managing Director since July 2023. I look forward to giving you an overview of our trading performance and strategy later in the meeting.
Thank you, everyone. We're also joined today by, on my far left, Sarah Tinsley, our Company Secretary, as well as members of SCA's Senior Leadership Team. I'll shortly ask Sarah to run through some administrative matters and will assist with online questions from shareholders later in the meeting. I'd also like to welcome Amanda Campbell and Tom Keary from the company's auditor, PricewaterhouseCoopers, who are available today to answer any questions in relation to the audit for our most recent financial year. Finally, Chris Dedrick from Computershare is also with us today. Chris will act as the Returning Officer for the purpose of conducting and determining the results of the poll on today's resolutions. Before we move to the formal agenda of the meeting, I'd now like to ask Sarah to outline the processes for shareholders to vote and ask questions during today's meeting.
Thank you, Heith, and welcome, everyone. Voting today will be conducted by poll on all items of business. As Heith has mentioned to you earlier, we've opened voting on all items for those participating online and those who are eligible to vote. For those online, you will see a voting icon is available on your screen. Selecting this icon will bring up a list of resolutions and present you with voting options. For those voting online, you're free to submit your votes at any time. To cast your vote, you should select for, against, or abstain for each resolution. Your vote on each resolution will be automatically recorded. There's no need to hit the submit or enter button. Please ensure you cast a vote on all resolutions. Once you've voted, you'll receive a vote confirmation notification on your screen.
You can change your vote at any time before the Chair declares the meeting and the voting closed. To change or cancel your vote, click the link labeled "Click here to change your vote" at any time before the poll closes. For shareholders, proxies, and corporate representatives present here in person, we'll ask you to vote once we've gone through all the items of business for today. You will be able to do so by completing the green voting card provided to you when you registered. White cards are for visitors who cannot vote or ask questions today. Shareholders who do not have a green card are not entitled to vote on any items of business. The Chair will provide a warning before we close the voting at the end of the meeting.
As Heith also mentioned earlier, Chris Dedrick from Computershare will act as our Returning Officer for the purpose of conducting and determining the results of today's poll. We will be announcing the results of the poll to the ASX later today. As the Chair, Heith will ensure that shareholders have a reasonable opportunity to ask questions and discuss the items of business during today's meeting. Because this is a hybrid meeting, we will first take questions from those physically present in the room, followed by written questions from participants who have joined us online, and finally, any audio questions from online participants. If you are attending the meeting here in person, only shareholders and validly appointed proxies and corporate representatives who were given a green or yellow card upon registration are entitled to ask questions.
For those attending in person, when the Chair calls for questions, please raise your green or yellow card and state your name and the organization you represent before asking your question. If you're attending the meeting online, you can submit a question at any time during the meeting via the speech bubble icon on your screen. Type your question in the chat box on the right of the screen and then select "Send." Confirmation that your message has been received will appear on your screen. The Computershare platform also provides a facility for audio questions, which is appropriate considering our company. To use this service, please follow the instructions below the broadcast window. The Chair will address your questions after each resolution. Your questions may be moderated, and if we receive several questions on one topic, we may amalgamate those questions.
While time constraints may prevent us from answering all questions, we'll do our best to address all of your questions during the meeting today. If we do run out of time, we'll answer your questions via email or by posting responses on our website. Where appropriate, the Chair will ask Amanda Campbell from PwC to respond to any questions received about the conduct of the audit. I'll now hand you back to the Chair to get into the substance of the meeting.
Thank you, Sarah. I will now provide a brief overview of SCA's fiscal year 2025 focus and achievements and our plans with respect to our proposed merger with Seven West Media Limited. I will then ask our CEO, John Kelly, to update the meeting on the company's operating performance, key financial metrics, and strategic milestones achieved through fiscal year 2025. We will then move on to the other business to be considered and vote on the resolutions. It is a true honor to be here addressing you today at my second AGM as your Chair, with the first full financial year completed since I assumed the role in March of 2024. It has been a year where strategy and strong financial discipline have delivered tangible outcomes, results, and opportunities for your company.
Our results for the financial year showed revenue growth of 5% to AUD 421.9 million and underlying group EBITDA of AUD 71.1 million, up 34.4% on fiscal year 2024. This performance was led by the growth in digital revenue, which was up 28.8% on fiscal year 2024, with LiSTNR's EBITDA contributing, increasing by AUD 12.9 million. As of fiscal 2025, LiSTNR is now EBITDA and cash flow positive. Importantly, our growth in both net cash from operations and strong cash conversion for fiscal year 2025 resulted in a significant reduction in net debt of AUD 40 million -AUD 67.6 million, with the leverage ratio down to 1.10 times as of 30 June 2025. Given the proven results delivered by this effective financial discipline, alongside the sustained operational momentum, the board was in a position to pay a dividend of AUD 0.04 per share, fully franked, for fiscal year 2025.
I'd like to thank our shareholders for their continued support throughout the company's period of transformation. We have had confidence in the company's all-about audio strategy, and fiscal year 2025 marked the realization of our divestment in all regional television assets, assets that challenged our monetization, given the lack of content control and advertising disintegration, and our ability to transition to a single-minded focus on our leading radio and digital audio assets led by LiSTNR, the Hit Network, and Triple M. Our market-leading position, with the audience that matters being 25- 54-year-old age group, and the continued strength of LiSTNR in the digital audio sector drove increased commercial returns for our advertisers and our digital revenue along with it. We have been long-standing advocates of the strategic benefits and necessity of media consolidation in the Australian market for some time now.
The board believes that consolidation is the best way to achieve the economies of scale for audiences and advertisers to enable media companies to genuinely compete against the global tech giants. In contrast to previous recent years, which have been impacted by engagement with various proposals put forward by other media companies and consortiums, fiscal 2025 has been a year where the board and management have had the benefit of sole focus on business activities. As a result of the disciplined execution of our company strategy, we have built a business with a market position that presents a compelling and competitive proposition for a prospective merger.
We are pleased to share with you the detail of this proposed merger on 30 September this year, being a merger with Seven West Media to create a leading integrated total TV, audio, and digital platform combining SCA and Seven West Media's brands, broadcast, and digital channels. This would create the largest broadcaster in Australia, with revenues of AUD 1.8 billion and assets reaching 100% of the Australian population. Most critically, both SCA and Seven West Media have market leadership across the audience that matters, 25- 54-year-old age group, which means that the merged entity would be positioned to offer advertisers, clients, and shareholders the integration, synergy benefits, and growth prospects of our combined strength across both platforms.
In terms of the opportunity for our shareholders, the proposed merger and combination of complementary assets will deliver significant revenue upside, with a further diversified revenue base of 65% TV, 25% radio, and 10% print. The exchange ratio represents a good outcome for our shareholders, especially as Seven West Media contributes approximately 75% of revenue and 69% of EBITDA, and our shareholders will own 50.1% of the merged company. We were pleased to welcome the findings of the independent expert report commissioned by your board earlier this month, which reinforced the board's belief and found that the scheme is in the best interests of Southern Cross shareholders.
Though it is Seven West Media shareholders who will vote on the deal, and therefore no report for Southern Cross Media Group shareholders is required, the board was committed to commissioning this independent expert report for our shareholders to provide objective analysis of the benefits and the risks of the proposed transaction and to give shareholders comfort. This proposed merger would mark one of the largest and most impactful media activities in recent Australian corporate history, and in the board's view, is supported by compelling underlying fundamentals, a clear strategic path forward, and demonstrable benefits to shareholders, which represent the strongest strategic fit of any consolidation proposal we have so far considered. We look forward to bringing you an update on its progress in the coming months.
I'd like to acknowledge the continued delivery on the company's transformation strategy, evident in the further momentum of our Q1 fiscal 2026 results announced on the 16th of October. These results showed that strong sales performance continued to deliver commercial share gains in both broadcast and digital, with quarterly revenue up 4.7% and underlying EBITDA up 129% on prior year. I know John Kelly will talk more about these results and our momentum in short course. These results and the proposed merger with Seven West Media are testament to the success of SCA's transformation, with cost out, disciplined financial management, and a successful focus on growing and monetizing the audience that matters. The board and executive team remain committed to continuing the company's positive performance and returns for shareholders.
I would now like to make some comments on the resolutions which are being put to shareholders today as set out in the notice of meeting. Resolution two relates to the re-election of Ido Leffler as a director. Ido is retiring by rotation and being eligible offers himself for re-election. Ido has a long and successful experience in developing digital brands and extensive networks in the startup communities of Silicon Valley and Australasia and has long-standing board experience. We will hear from Ido later in the meeting. Following the strike on the remuneration report last year, the board undertook a comprehensive review of the company's remuneration framework and engaged with major shareholders and remuneration consultants to develop a new executive incentive scheme. The new scheme shifts the focus to absolute shareholder returns, ensuring incentives for senior executives of the SEA are aligned with shareholder outcomes.
As such, we ask you to support both the adoption of the remuneration report and the grant of the performance rights to the CEO. Moving to the shareholder requisition resolutions put forward by Sandon Capital, these resolutions are not supported by the board. The effect of these resolutions, if passed, will be that all but John Kelly would cease to be directors of the company. This would require John to appoint additional directors to ensure compliance with the Corporations Act. Sandon has not nominated any directors, and the removal of directors without replacements would cause significant disruption to the ongoing management of the company. The board strongly believes that the proposed resolutions are not in the best interests of the company, and we ask that you vote against resolutions 5A to 5D.
In regard to resolution six to amend the constitution, this has also been put forward by Sandon Capital and is not supported by the board. This proposed amendment has the effect of restricting the ability of SCA to issue more than 25% of its shares without shareholder approval. If the amendment were made, it would be inconsistent with the recently announced proposed merger with Seven West Media and may result in the deal not proceeding. Therefore, the board asks you to vote against this resolution. Finally, on behalf of the board, I would like to thank our many stakeholders, including our leadership team and SCA's people, along with our advertisers, partners, and the communities we serve around Australia for your ongoing support of SCA.
In particular, I extend my thanks to you, our shareholders, for your patience and trust through our transformation period, and I'm very pleased that we're now able to deliver returns and compelling growth prospects via the execution of this strategy. I now invite our CEO and Managing Director, John Kelly, to say a few words.
Thank you, Heith, and good morning again. It's a privilege to be here as Chief Executive Officer of Southern Cross Austereo . When I spoke to you last year, I said SCA was a company in transformation. Twelve months on, we are now in business with renewed confidence, clear momentum, and a sharp focus on the audience that matters across the Hit and Triple M networks and LiSTNR. As you know, we are also actively and collaboratively working towards the merger with Seven West Media, and more on that shortly.
I'm proud to say that FY25 was a year of delivery. We achieved group revenue of AUD 421.9 million, up 5% on the prior year, with underlying EBITDA up 34% to AUD 71.1 million. Net debt was reduced by almost AUD 40 million- AUD 67.6 million, and the board reinstated a fully franked dividend of AUD 0.04 per share, a clear signal of the strength of our balance sheet and the confidence we have in our business model. We've also recently released a market update on our results for the first quarter of FY26, which demonstrated our positive operating momentum has continued. Our audio revenues for the three months ended 30 September 2025 were AUD 105.1 million, up 4.7% on the prior year. Our Q1 Metro Radio share was 29.8%, which was up 1.8 percentage points on the previous year, with SEA achieving 12 consecutive months of share improvement.
LiSTNR digital audio revenues also continue to outpace the market, with Q1 share increasing to 49%, up 5 percentage points on the prior period. Cost discipline remains a key focus, with total cost for Q1 down 3.4% on the prior year and non-revenue-related costs down 5.8%. Our underlying Q1 EBITDA of AUD 14 million was up 129% on the prior year. In Q2, SCA has continued to gain revenue market share in a challenging advertising market, and we've also made further refinements to the operating cost base. Today, we can reaffirm that we are on track to meet our FY2026 underlying EBITDA guidance of AUD 78 million-AUD 83 million. Our success rests on one simple proposition: serving the audience that matters. For advertisers, that means connecting with the people that drive consumption and conversation around the country.
For audiences, it means content that entertains, informs, and inspires every day, everywhere, and across every platform. In FY25, SCA maintained its leadership in the 25 to 54 demographic, the most commercially valuable audience in Australia, and has done so for 34 consecutive surveys. Across the Hit and Triple M networks, alongside our Digital Audio and LiSTNR brands, we now reach 9.9 million Australians each and every week. In regional Australia, we connect with 70% of all commercial radio listeners, more than double the reach of our nearest competitor. This audience leadership is the foundation of our company, and it continues to underpin our financial performance. Broadcast radio remains a resilient and profitable part of our business. Our Metro Radio revenue grew 4% in a flat market, while our regional network held steady in a market that declined 2%.
Strong local relationships, compelling brand-safe national content, and consistent execution continue to differentiate SCA. Digital Audio is also driving growth. LiSTNR, our owned and operated digital ecosystem, now has more than 2.5 million signed-in users and delivered year-on-year revenue growth of 29% to AUD 45.1 million. LiSTNR is now EBITDA cash flow positive just four years since launch. Our proprietary advertising technology, the LiSTNR Ad Tech Hub, has best-in-class ad tech features, enabling advertisers to achieve greater targeting precision and measurable returns. More than a third of LiSTNR campaigns now use these ad tech features, and the average value of digital campaigns has increased by almost 80%. Together, our broadcast and digital platform give SCA unmatched reach, data, and integration across Australian audio. Our brands are built on great people and great storytelling.
With a significant amount of change happening in other networks, our focus has been on developing new talent and consistency for audiences and for clients, with local talent that our listeners and business partners know, love, and trust. In 2026, that focus pays off. We will enter the new calendar year with both the Hit and Triple M networks' full Metro lineups locked in and unchanged, a sign of strength, stability, and an unwavering commitment to live and local content. That stability is a real competitive advantage. In an environment of constant movement across the industry, SCA's programming teams, talent, and producers are heading into next year confident and connected, delivering shows that cut through, drive engagement, and integrate seamlessly for advertisers. 2025 has been a year of great success for SCA, with record growth and total domination of the audience that matters, adults 25- 54.
We've been the number one network in this The Money demographic across all six surveys this year, with the seventh and final survey results for the year out tomorrow. The Hit Network continues to lead among women 25- 54, while the Triple M network leads among men 25 - 54. Building on that strength, both networks will continue to deliver 10 locally produced breakfast shows across the Metro markets, the most of any broadcast network in Australia. This combination of established and emerging stars delivers entertaining, trusted, brand-safe local programming that drives audience connection and client integration across every city. On Triple M, our tailored AFL and NRL Rush Hour shows will keep sports fans across the country entertained, while after an outstanding debut, Lou and Jarch return in early drive from 2:00 P.M. to 4:00 P.M.
The network's lineup of Mick in the Morning with Roo, Titus and Rosie in Melbourne, Beau, Cat, and Woodsy in Sydney, Marto, Margaux, and Dan in Brisbane, Roo, Ditts, and Loz in Adelaide, and Xav, and Katie in Perth provides a powerhouse foundation of local, loyal, and laughter-filled shows. On the Hit Network, audiences will continue to connect with Fifi, Fev, and Nick in Melbourne, Jimmy and Nath with Emma in Sydney, Stav, Abby, and Matt in Brisbane, Bernie and Emma G in Adelaide, and Pete and Kimber with Ben Cousins in Perth, complemented by Carrie and Tommy in Drive and the Hot Hits with Nick and Lauren in Nights and Lucy and Nikki in Late Nights and Weekend. This balance of trusted familiar voices with fresh energy ensures SCA continues to grow the next generation of stars while maintaining the audience relationships that underpin our market leadership.
We've also welcomed several stars to LiSTNR lineup, including Life Uncut, The Imperfects, and Vanish among our steady staple of favorites like Hamish & Andy, The Howie Games, It's A Lot with Abby Chatfield, Darling, Shine!, KIC POD, to name just a few. Our people are the heart of SCA, and their creativity, professionalism, and commitment have been central to this turnaround. We continue to invest in leadership and capability through programs such as SCA Leads and the LiSTNR Academy, and through initiatives that promote inclusion, flexibility, and well-being. Women now represent more than half of our workforce, and we are on track to achieve gender balance at every level of the business by 2027. Our gender pay gap is now significantly below the industry average, and we remain committed to further improving this key metric.
Through SEA Embrace, a national charity initiative, we provided more than AUD 55 million in media value to the Cancer Council and Endometriosis Australia, supporting causes that matter to our audiences and our teams. Strong culture drives strong performance, and the results of the past year are proof of that connection. We also continue to strengthen our environmental, social, and governance practices. In FY25, we reduced greenhouse gas emissions by 21%, largely through energy efficiency initiatives and the investment of our regional television operations. We enhanced our cybersecurity posture and introduced mandatory data privacy training for all employees. Good governance and responsible operations are integral to building a sustainable business and protecting shareholder value. Before I close, I would like to address the proposed merger between Southern Cross Austereo and Seven West Media , which was announced in September.
This proposed combination is an important and logical next step for both companies, bringing together two complementary businesses to create Australia's leading cross-platform media network with national scale across television, radio, print, and digital assets. Our goal remains to deliver greater value to audiences, advertisers, and shareholders through enhanced reach, data, and innovation. Until this process is complete, our focus remains on maintaining our operational momentum and delivering on our FY26 plan. Looking ahead, the priorities for the year ahead are clear. Continue to grow audio revenues across both broadcast and digital, maintain cost discipline and strengthen profit margins, deepen our relationships with advertisers through data-led solutions, invest in people, technology, and culture to sustain performance. The fundamentals of our business are strong: leading brands, growing audiences, a robust balance sheet, and a talented team that knows how to execute.
In closing, I want to acknowledge and thank our Chair, Heith MacKay-Cruise, and the board for their ongoing guidance and support to myself and the broader SEA team. I'd also like to thank our executive team and the 1,200 people who make up SEA. Their energy, creativity, and commitment continue to inspire me each and every day. To our advertisers and partners, thank you for your support and confidence in our platforms and your collaboration in helping us reach the audience that matters. To you, our shareholders, thank you for your continued trust as we navigate this exciting next phase of growth and change. I'm energized about our future and the next chapter of growth for SEA. FY25 was a year of delivery. FY26 will be a year of evolution, one that positions SEA and potentially the combined group for long-term growth in an ever-changing media landscape. Thank you.
Thank you, John. We will now move to discussion of the formal items of business set out in the notice of meeting. The notice of meeting has been made available to all shareholders, and is also available on SCA's website. The explanatory notes in the notice of meeting explain the background to each of the items of business. Shareholders have had an opportunity to consider those matters, and I will take the notice of meeting as read. Let's now turn to the items of business on the agenda. I will step through each item of business and accept questions after each item. The online platform is still open, so you still have some time to submit a question if you haven't already done so. As I mentioned earlier, the poll is open on all items. If you haven't yet voted, I encourage you to do so now.
The number and percentage of valid proxies received before the meeting are now shown on the screen. These proxies have been reviewed in accordance with the Corporations Act and the ASX Listings Rules, and any proxy votes required to be excluded by those requirements have been excluded from the numbers on the screen. Moving now to item one, to receive and consider the financial report of SEA and the director's report and auditor's report for the financial year ended 30th of June 2025. As shareholders are aware, there is no requirement for a vote in relation to adoption of the financial report, although we, of course, would welcome any questions. Are there any questions from shareholders in the room today in relation to this item or either mine or John's speeches? There's a microphone coming.
Thank you. Charlie Kingston. Just a quick question around the merger and, I suppose, the capital allocation of the merged group going forward, because SEA recently started paying out some significant and very healthy dividends, which was, I suppose, appreciated by the market, hence the big re-rating in the company. Seven West, conversely, I forget how long it has been since they have paid a dividend, but clearly you are inheriting SEA, or SXL is inheriting a fair bit more debt post the merger. How do you think about the ongoing ability of this group to return money to shareholders, given there will be a fair bit more debt? I suppose, I do not know, TV seems to be shrinking a fair bit faster than some of the other media divisions.
The news that the West seems to be holding up okay, but yeah, just how do you think about capital allocation post this merger going ahead, please?
Yeah, thanks, Charlie, for your question. Firstly, I would say that the proposed merger with Seven West Media brings three substantial benefits. Firstly, to the advertising community by actually having similarities with the audience that matters, 25 - 54-year-olds across a brand portfolio of brand suites. Secondly, with regards to the opportunity to leverage those assets with our talent and our staff and the marketing opportunities. Thirdly, to the heart of your question, what it does for our shareholders. While the matter of capital strategy is a matter for the potential, once the merge is actually approved, should it be approved, then it is a matter for the Merge Co board.
The operating principle that we have applied here at Southern Cross Austereo has been to make sure we have very robust operating leverage. We've cleaned up our balance sheet, and we've been able to actually pay down the debt, and in so doing, been able to apply a dividend policy, being 65%-95% of impact paid. On that basis, they would be the principles we would apply. To the heart of your question, though, that is a matter for the Merge Co board.
I understand that, but surely you must have had some sort of forward-looking forecast. We are the buyer in this transaction. Do you have a view on the... That was one of the big appeals for SXL, that the distributions, it was a very healthy yield prior to this.
I understand it's a decision for the new Merge Co board, but you making this transaction, I presume you did the work to understand if you would be able to continue returning. Surely it's accretive, and if it is accretive or enhancing for the value of Merge Co, surely you must have some thoughts on if this should strengthen the group and enable it to continue paying healthy dividends going forward. I just appreciate some more color, please.
Sure. Thanks again for your question, Charlie. You are quite right to call out it is EPS accretive quite substantially to the tune of more than 100%. We have had, and should the deal continue and be approved by the shareholders and the regulators, then we would look to...
I think one of the great appeals of the scale platform is a potential re-rating and the target to get into the ASX 300, which supports liquidity. To your heart of your question around due diligence, yes, we applied considerable due diligence to the asset that brought us to the proposed merger that is in front of both our shareholder groups. The truth is that we see a significant opportunity to pay down the debt, and we want to be in a position where we will be paying dividends, but that is a matter for the Merge Co board.
Thank you. Gabriel Radzyminski, Sandon Capital, just following on from, I think, what was some good questions from Charlie. You just cited 100% accretion on EPS. Can you just clarify for everyone listening in that that is on the basis that you will have cost savings over 18-24 months? Is that correct?
Yeah. That is pre-synergies, but the synergies, you're right, it's AUD 25 million-AUD 30 million of cost out 18-24 months from completion.
Basically, shareholders won't really know what's happening, and hopefully, from the company's perspective, they'll have forgotten the promises that were made 18 months or two years prior. I just think Charlie's questions were pretty simple and straightforward, and I think you've been evasive in terms of answering them. It's a bit of a cop-out to say the Merge Board will deal with this. Shareholders are being not given an opportunity to vote on this, but you're just not answering the questions.
Can you clarify? What is your question?
Charlie's question. He asked a simple, straightforward answer about the dividend outlook, and there's a very evasive response saying, "Oh, that'll be a question for the Merge Entity Board."
It is a question for the Merge Entity Board. Should the deal not proceed, then we're very clear around our current position on dividend payment, and the CEO has already confirmed the outlook guidance, and we remain committed to that outlook guidance.
Wasn't very excited, the prospect that you mentioned the deal might not proceed. On what circumstances could that happen?
When we went into this deal, there were two things, Gabriel, that you would... and thank you for giving me the opportunity to remind shareholders. There were two specific things that we did to make sure that shareholders had protected their rights.
The first was the independent expert report, which was just a couple of weeks ago released to the marketplace, that confirmed that this deal is in the best interest of all shareholders. The second was a fiduciary carve-out. Normally, those carve-outs are done on the target, but in this case, it was on the acquirer. That fiduciary carve-out, which expires, I might add, at close of business on Wednesday, the 26th of November this week, allows for any interloping bid for the board to give due consideration to that bid.
On that one, in the remote possibility, with the deadline expiring on Wednesday, does that mean if the board receives something beforehand, it then has to decide by Wednesday, or does Wednesday set a clock for it to consider whether the bid is superior or not?
I'll take that on notice, but my understanding is that it's close of business, Wednesday, the 26th, is when that timeline and window closes.
That's correct.
Are there any other questions in the room? If not, Sarah, do we have any questions online?
We don't.
Anyone on the phone for questions?
No, not at this stage. Thank you.
All right.
Rather than leave things on a sour note, I think I'd also just make the point that, frustratingly, the results that you've delivered as a board, the comments that John made, while positive, further from our perspective, just reinforce the frustration at the idiocy of the transaction that you've entered into. I do think it's worth saying that you've done a fantastic job.
As I said to John when he came to discuss the results at the full year, he did not make our job any easier by delivering such a good result. I would just like to say congratulations.
Thank you, Gabriel. If there are no, just another check online. No further questions. No. All right. If that is the case, I am going to suggest that we now move to resolution two and the re-election of Ido Leffler. As Ido mentioned earlier, Ido joined the board in 2020 and was also most recently re-elected by shareholders at the 2023 AGM. Ido's digital and online experience have been integral to the development of SEA's LiSTNR platform and digital transformation over the past five years. I will now invite Ido to speak on his experience and continued commitment to SEA.
Thanks, Heith. I should have you record that for my mother.
Good morning, everyone. It is a privilege to seek re-election for the board of Southern Cross Austereo . Over the past term, I've been proud to contribute to SCA's transformation, strengthening our leadership in audio, accelerating our digital growth, and continuing to deliver value for our shareholders, audiences, and partners. As we look to the future, the possibility of a merger with Seven West Media represents an important moment in SCA's journey. It's an opportunity to build an even stronger, more integrated media organization that can deliver scale, innovation, and enhanced reach across all platforms. This potential step demands a board with a deep understanding of media, consumer behavior, digital transformation, and governance. Our board skills matrix is designed to ensure precisely that balance. I believe my experience aligns closely with those priorities.
My background in brand and consumer engagement, commercial strategy, digital innovation positions me to contribute constructively as we evaluate strategic options with rigor, creativity, and most importantly, accountability. Throughout this process, I remain focused on safeguarding shareholder value, supporting our people, and maintaining the trust of our audiences and partners. If re-elected, I'll continue to bring a collaborative and future-focused perspective to the board deliberations, ensuring that our decisions reflect both the opportunities of a changing media landscape and the enduring values that define SEA. Thank you for your continued trust and support.
Thank you, Ido. The proxy results for resolution two are now displayed on the screen. Are there any questions from shareholders in the room today in relation to this item of business? There's one at the front, Roger. And then I'll go to you, Gabriel.
Thank you. I'm Roger Colman, shareholder.
I'm voting against this resolution and also for Marina Go's resolution on the basis of raising a flag post-merger. If you look at the Nine Network board, and now you'll have some scale with the merger, it's very important that the board quality is brought up to and exceeds that that Nine Network has got. They've got people like Peter Tunno. They've got Mickie Rosen from Disney as a corporate advisor right through the American media landscape. And they've got Matt Stanton as the CEO, whereas the current CEO of Seven West Media is essentially a CFO, and that's where he's come from. It's very important for the board post-merger to get a scale, a team with a breadth of history on this board. You can't rely on people like Brian Stokes and so forth to make substantial positive contributions to media decisions.
I take that comment as noted. Thank you, Roger.
Sorry, my question was actually, Chair, could you read out the resolutions or the voting? Because I am struggling to read the fine print for this one and all others. While I've got the microphone, just a question for Mr. Leffler. Given your comments, why are you only going to be on the board until June next year? What are we wasting our time for? I mean, if the prospects are so good, why wouldn't you stay? I'm asking you the question. I'm not deferring this question to the Chair.
Thanks, Gabriel. This was a decision made in the construct of the current deal that's been proposed with Seven West Media. While I love this business, this is something that till June of next year is where I've given my commitment.
To what I might do, if you're struggling to read them, I might just ask Sarah to read the resolution.
Yeah, of course. Yeah, of course. Re-election of Ido Leffler, the votes for, there's 139,024,029 votes, which represents 78.34%. Votes against, 37,405,730 votes, representing 21.07%. Abstentions are not recorded because of their low value. The proxy's discretion is 1,062,573 votes, representing 0.59%.
Sarah, are there any questions online or in audio?
We have one question here. This question is asked by Mr. Stephen Mayne. Why didn't you disclose the proxy position to the ASX along with the formal addresses to allow for a more fully informed debate on Ido's re-election and all other items up for debate today? Which proxy advisors covered this meeting, and did they recommend in favor of Ido's re-election?
For clarity, the Chair and CEO addresses have been submitted well before this meeting started this morning. As is good practice, the proxy results, and in fact, the final poll results from today, will be submitted to the ASX by the end of today. There were two proxy reports that were produced on the company. Specifically to resolution two, they were supportive of Ido's re-election. Is there any more online?
No further questions.
I think there was one more. Yeah.
Thank you. Just a question for Mr. Leffler. It just seems like you're the digital guru on the board. With all the rise of podcasting and the pivot towards that, could you just give us your thoughts, please, on the losses are shrinking?
I think we may be break-even on the digital front, but just in terms of actually making that a highly profitable part of the business. Do you think radio margins are very healthy? Do you think the digital side, podcasting, everything else will be able to get to a similar level of profitability or margins? How are we going in that front? To post the merger with TV, do you think that gives us a better position to increase the margin from the digital side, or does it make it harder? I'm not sure about digital TV, but just it would be great to hear your thoughts, please.
Great question. It's a question that we talk about at the board quite frequently. I'll defer to John in a minute. I'm sure he's got some perspective here too. Digital is clearly the future.
In general, more and more advertisers are looking for digital as a pathway to get to new audiences. As digital penetration continues to grow in this market particularly, it is going to be significantly more interesting, I think, for advertisers as we move forward, creating a significant opportunity for profitability and growth, both in audio and in future businesses to come. I think that there is a—I think it is clearly going to be an ever-growing presence for this business and any media business in this country, as it is representative in other markets as well. John, do you have anything to add there?
Just two things. One is that we are profitable after only four years of having a digital business with almost AUD 50 million of revenue. Our aspiration is to get that to a 20% margin in QUIC's stock with 20% growth.
That 2020 is sort of our new mantra for the LiSTNR part of our business. We believe that's highly achievable. I think the second part in relation to the Seven West Media merger, we are incredibly excited about combining the digital assets of both companies. They have 15 million signed-in users on 7plus. We have two and a half million on LiSTNR. Combining those two with the data that that provides and almost getting 16-17 million Australians is an extraordinary advantage for both properties, but particularly LiSTNR. We are very excited and really talking about what that could deliver for both companies. That is a huge advantage of the merger coming forward.
If there are no further questions on the re-election of Ido, I'll now move to resolution three. Resolution three is the remuneration report.
We will now share the details of proxies lodged prior to the AGM in relation to this resolution. I will ask Sarah to talk to this in a minute. As you can see from the proxies, we have strong support for the remuneration report. Subject to the results of the poll today, we anticipate this resolution will pass, in which case any votes cast with respect to resolution seven will be declared null and void. Sarah, can we talk through the proxies?
Of course. This is resolution three, the remuneration report. Votes for, we have 142,238,600 votes, representing 80.73%. Votes against, 32,901,655 votes, representing 18.67%. Abstentions, 1,321,415. Proxies discretion, 1,067,181, representing 0.6% of votes.
Thanks, Sarah. Are there any questions from shareholders in the room today in relation to this item of business, resolution three, the remuneration report? Are there any questions online?
There are no questions online.
The next item of business is to seek shareholder approval for the grant of 1,426,154 performance rights to SEA's Chief Executive Officer and Managing Director, John Kelly, under SEA's long-term incentive for fiscal year 2026 on the terms summarized in the notice of meeting. The proxy results are displayed on the screen.
Sarah, I'll ask you to read them out, please. Yep. The resolution being the grant of performance rights to Chief Executive Officer and Managing Director, John Kelly. Votes for, 143,376,192 votes, representing 80.85%. Votes against, 32,936,644 votes, representing 18.57%. Abstentions, 718,031. Proxies discretion, 1,035,896 votes, representing 0.58%.
Thank you, Sarah. Are there any questions from shareholders in the room today in relation to this item of business, resolution for the remuneration report? Actually, sorry, just behind you first. We'll go Gabriel and then you, Roger.
One of you, just please confirm a couple of things. Under the merger, does that in any way constitute a cessation of employment for John, given that he's moving from CEO of Southern Cross to a different role in the movement?
No, there is no change of control impact with regards to employment, or for that matter, the incentive program.
Or role? Basically, you're saying there's no change of control trigger as a result, but it's a change of role trigger for John, given that he's no longer CEO of the merged entity?
He's in effect with a different title, the Managing Director, the Group Managing Director of Audio under the proposed merger.
That doesn't trigger? I mean, we've had instances in the past where people have changed roles under mergers. And unbeknownst to shareholders, it's actually triggered a full vesting because of a change of role.
Yeah. Yeah. For the avoidance of doubt, there is no, under the employment contract, there is no trigger for change of control. Equally, if I can just extend your question to the EIP, the executive incentive program, given the acquisition by Southern Cross Media as part of the merger, there is no change of control trigger under the executive incentive program for our employees. Executives, rather. Roger, I think you had a question.
I think at this point, we should say thank you very much to John Kelly for the performance that he's delivered for this company. He's best at ARN. He's best at their best talent, Kyle and Jackie O. I think the AUD 1.1 million he's been given in respect to the performance rights are essentially 30 cents a share on, what have we got, 200-odd million shares? It's a dirt cheap performance rights grant.
Thank you, Roger. Yes, about 240 million shares, so. If there are—are there any other questions online?
I do have one here from—this is asked by Stephen Mayne. Further to the last question, you did not disclose the proxies to the ASX along with the formal addresses, which is AGM best practice done by the likes of Sun Corp, JB Hi-Fi, ANZ, Brambles, CarSales, and many others, including our own share registry provider, Computershare. By withholding disclosures, you are doing the equivalent of asking Anthony Green to comment on the election results without any data. Please disclose all the proxy votes now on all other items. What did the proxy advisors recommend on this LTI grant item?
I will reconfirm that the ASX notice went up this morning with regards to the Chairman's address and the CEO's address.
I will reconfirm that the proxy report will actually also factor into the poll today. Those results will go to the ASX at the end of today. I can reconfirm support for the remuneration resolution from both proxy advisors. If there are no further questions, I will now move to resolution five. I will now address resolutions 5A to 5D and resolution six. These resolutions have been requisitioned by funds managed by Sandon Capital under section 249N and 249D of the Corporations Act. I would like to note these resolutions have not been proposed by and are not supported by the board. I will address resolutions 5A to 5D as a block with respect to any questions. The resolutions are as follows. Resolution 5A to remove myself, Heith MacKay-Cruise, as a director of SEA, with effect from the close of the meeting.
Resolution 5B to remove Ido Leffler as a director of SEA, with effect from the close of the meeting. Resolution 5C to remove Marina Go as a director of SEA, with effect from the close of the meeting. Resolution 5D to remove any other person appointed as a director of SEA between 9th of May 2025 and the date of this meeting. As Chairman, I intend to vote all available proxies against resolutions 5A to 5D. The proxy results for these resolutions are displayed on the screen. Sarah, before I go to questions?
Sure. Let me read those out. I might read the four votes and percentages for each to begin with, and we can go from there. Removal of Heith MacKay-Cruise as a director, votes for 42,034,508 votes, representing 26.10%. Removal of Ido Leffler as director, votes for 36,632,186 votes, representing 22.72%.
Removal of Marina Go, votes for 33,614,594 votes, representing 20.84%. Removal of any other director appointed and confirming that there was no other director appointed during that period, votes for 32,035,560 votes, representing 20%. Would the meeting like me to continue reading, or is that enough information?
Perhaps we will move to questions from shareholders in the room first. Equally, if there is a question, please feel free to—if you need more detail on the resolution, we are happy to go there. Roger, you are first.
In the event that this resolution possibly could have succeeded, did the board make provision for the movement of the Poplands share as new directors?
Thank you, I think, Roger, for that comment.
Thank you. Just clearly, there is a bit of angst around the merger. I mean, to me, the biggest question mark is TV.
I have no idea how to model it. Clearly, TV is shrinking in terms of the revenue it can generate faster than radio. The high-level theory, at least you're all the experts, but radio seems to be holding its own and delivering some pretty healthy margins. Print has shrunk rapidly in terms of its share of the overall advertising market. TV is certainly shrinking pretty quickly, of which SCA is now buying. Maybe it is a good merger. I'm not sure. Maybe if I could ask, I suppose, each director who was included in this resolution, what are your thoughts on TV going forward? What are you modelling to say that this merger will be accretive? I think the last numbers from Seven and Nine were pretty consistent. TV is shrinking roughly 10% or thereabouts. I think radio's holding its own.
Yeah, maybe just to provide some comfort around this merger that we're getting a good deal, what do your models suggest around when you think this will be accretive for SEA? What do the revenue numbers look like or earnings look like on a one, three, five-year basis on TV? Because it seems to be like that is the big question mark. That is shrinking the fastest. Do we assume, or do the directors as part of this deal assume that TV will stabilize, keep shrinking? I really don't know. You're all the experts, so it'd be great to hear what you think TV will do and what you've assumed in this merger, please.
Yeah, sure. Thank you for your question. I will address that on behalf of my fellow directors.
First and foremost, I'd like to clarify a little bit like Southern Cross Austereo, the benefit of our digital play with LiSTNR, with close to 2.5 million people signed in over the course of the last five years as we've built that product. That is to actually offset, if you like, some of the macro headwinds with regards to broadcast radio. The same, which is the heart of your question, is the same for TV. There are 15 million signed-in users for 7plus, which is very significant. It's the largest digital capability in the broadcast market in Australia, which is actually supported by the Seven assets, including TV. There is no question that there are some structural challenges around the kind of core free-to-air proposition.
I do remind all shareholders that the deal construct here with 50.1% of the Southern Cross shareholders is actually in the construct. The way that it's structured actually is that Seven West Media, their earnings and their revenues are greater than the earnings and revenues of ours going in. From the point of view of actually the digital capability, that is very significant to the deal construct and in our view is actually the future of the merged media assets.
Thank you. I'm not trying to be cheeky, but you didn't really answer the question. Do you think TV will grow in terms of its share of the overall ad spend or just revenue top line? When you put this merger before or decided upon it, what do you and the directors actually think will happen to the TV market?
Sports rights are getting more expensive, AFL and NRL. It seems like radio's a bit more entrenched. You can sit in your car and automatically—not always, but radio seems a bit more accessible and listeners are increasing. What do you actually think will happen to the TV market? Do you think it will grow? What do your models suggest when you put this merger ahead? Is revenue going to go up? I understand there's a lot more revenue that we're getting for the 50/50 share. What do you actually think revenue will do going forward, please?
Yeah. We believe that there will be revenue growth holistically for the merged assets going forward. You're asking about a particular segment, which is a very important part of the merge ratio.
We think that actually there are structural issues in the marketplace and at the same time that the market share is actually key. We have seen this in our radio business through John's already made comment to that with regards to the share of our assets in radio and broadcast radio and in digital radio. The same actually holds for TV. I think it is important to note that free-to-air TV has a core proposition in Australian society. You have mentioned the sports, and obviously Seven actually has the rights to the Ashes, sorry, to Cricket Australia and to the AFL, amongst many others. That is very complementary to, for example, what the assets we have with Triple M, as they host the AFL and the Cricket as well. We think there is significant benefit, and that is revenue benefit with regards to the media assets merging.
Thank you. Yep, sorry, it was only a two-day Ashes. I think we're—
Well, we hope it's a five-day one going forward.
I understand that. I would love to know if you think TV as a standalone, which is the biggest bit of revenue that we're buying, will grow revenues going forward or not? What does this—for this transaction to be accretive, what do you assume needs to happen? I presume you've done those forecasts.
Yes, we have. Perhaps I haven't articulated. We see revenue growth for the combined media assets going forward. TV specifically, which will be our biggest—TV is linked to digital. The consumption of free-to-air TV is also linked to 7plus and Seven Digital, for example. It is not one kind of standalone kind of free-to-air proposition.
The consumption of free-to-air can also happen, for example, on Channel 7 with regards to the digital platform as well. I have just given some examples with regards to the sports with AFL and cricket. The growth and the profile of digital is matching the consumption behavior of Australians. The spread of Channel 7 and Seven West Media and Southern Cross reaches 100% of all the metro, regional, rural markets in Australia. We believe that there will be growth: growth in market share, growth in revenue, and growth in earnings for the merged business. Bringing us back to resolution five, the remuneration—the spill resolutions.
We have one additional question on resolution five, and it is from Mr. Stephen Mayne. Have our two largest shareholders, 20 Cashews and ARN Media, supported the board recommendation on all resolutions today, including this removal resolution for the chair?
We are not in a position to confirm the individual voting rights. That is for each entity to confirm. As we can see by the proxy results, there is substantial support for the incumbent directors.
Heith, on behalf of 20 Cashews, I can confirm that we voted in accordance with the board's recommendations on the resolutions today.
Thank you, Peter. If there are no further questions—no further questions in the room, I now move to resolution six. Resolution six is a special resolution to amend the constitution of the company by inserting a new article 1.1A. As mentioned, this special resolution has been requisitioned by funds managed by Sandon Capital Proprietary Limited under section 249D of the Corporations Act. The company, with the consent of the requisitioning shareholder, has determined to put this resolution to this meeting to avoid the cost of holding a separate extraordinary general meeting.
Further information has been provided in the notice of meeting. I note that a special resolution requires a 75% majority of shareholders eligible to vote in order to pass. The proxy results for this resolution are displayed on the screen. Sarah?
Yes. Resolution six, which is the shareholder requisition resolution to amend the constitution of the company. The votes for are 61,765,621, representing 38.5%. Votes against: 97,587,009 votes, representing 60.83%. Abstentions: 17,638,017 votes. At the proxy's discretion, 1,076,116 votes, representing 0.67%.
Thank you, Sarah. Are there any questions from shareholders in the room today with regards to this item? Are there any questions online, Sarah?
There are no questions online, Heith.
Audio?
No. Thank you.
If there are no further questions, I will now move to the next resolution. This is resolution seven.
As I mentioned earlier, this resolution is only valid in the event that resolution three is not passed, which we anticipate, based on proxies received, will not be the case. The proxy results for this resolution are displayed on the screen. Are there any questions from shareholders? Oh, sorry. Sarah?
I can read those out. So the conditional spill resolution votes for: 24,756,854 votes, representing 15.39%. Votes against: 127,478,216 votes, representing 79.26%. Abstentions: 16,693,589. At the proxy's discretion, 8,600,192 votes, repre senting 5.35%.
Thank you, Sarah. Are there any questions from shareholders in the room today regarding this resolution? Are there any questions online?
I have one general question that I might put to you from Stephen Mayne, which says, "If Aurora and Sims Limited can both recommend an identical constitutional amendment and receive support from more than 98% of voted stock, why did we resist?"
The board made it very clear, and I've commented in my Chairman's speech, that the effect of this resolution would challenge the proposed merger with Seven West Media. This resolution was proposed not by the board, but by Sandon Capital after the announcement of our proposed merger. To clarify, Gabriel, I'm not in the position of disclosing confidential discussions between shareholders.
Given that you've raised it, that meeting that you and I held one week before the announcement of the Seven West Media proposal was a meeting that the board and the company, through myself, had asked for, specifically with regards to the board spill resolutions. That was the purpose of the meeting, where you had flagged at that meeting that you wanted us to consider a constitutional amendment in the vein of another company that had actually done it during the course of the last couple of months.
Just to clarify, I shared it with you as a 249D resolution that I suggested. I offered it to—
can we just put the microphones so people can hear?
Just to clarify, you requested the meeting. You turned up to the meeting with whatever your intentions were.
I turned up to hear what you had to say, but with my own intentions. I shared it with you. If you recall, it was a draft 249D, but I actually proposed to you an opportunity for the board to consider putting it forward themselves rather than forcing us to do it, which is what we inevitably did.
Yes. To clarify, you put it to us, we deliberated on it, and we responded within the week, which was the timeframe that I had promised to you.
You effectively responded with the merger.
We still responded to the specific request as it was put to us. Are there any other questions with regards to resolution seven? If there are no further questions, that concludes our discussion on the items of business and all matters that we need to cover in our meeting today.
As explained earlier in the meeting, all resolutions will be decided by poll. I appoint Chris Dedrick of Computershare to conduct the polls. I have previously explained the arrangements for online voting today. For people physically present here today, the poll will be conducted as follows. Each shareholder, proxy holder, or corporate representative will be invited to complete their green voting card. Your green voting card contains all the resolutions contained in the notice of meeting. Please follow the instructions on the green voting card and tick the voting box for each resolution or write the number or % of votes you are casting for or against the resolution. When you have completed your voting card, please return it to Chris or one of his assistants. After a reasonable time, I will declare the polls closed and will then formally close the meeting.
You will be notified of the results of the polls on the company's website and by ASX announcement later today. If there is anybody here who believes that they have not received the correct card, please raise your hand so that a representative of Computershare can assist you. I now invite you to complete your green voting cards. If you are participating in the meeting online, please ensure you have cast your vote on all resolutions that you're entitled to vote on. I will shortly declare the polls closed. I now declare the polls closed. The final poll results will be released to the ASX and posted on the company's website when they are available later this afternoon. On behalf of the board, I thank you for participating at today's AGM. I declare the meeting closed.
For those of you in the room, I invite you to join us for some light refreshments.