Buoyed by its Toronto street furniture contract, the acquisition of the former Standard Radio assets and a 12% increase in TV advertising, Astral Media enjoyed a “solid” first quarter that saw earnings increase 15% to $37.5 million (69 cents per share).
President and CEO Ian Greenberg said all business units contributed in a “significant manner” to the Montreal company’s results for the three months ending Nov. 30, which saw consolidated revenues increase 20% to $198.7 million.
Astral’s radio revenues increased 58% to $49.2 million, largely attributable to the one-month results of the newly acquired Standard Radio assets. The $1.1-billion deal for the Standard assets, which closed Oct. 29, transformed Astral into the country’s largest radio broadcaster, with 83 stations in eight provinces.
Revenues for Astral’s outdoor advertising business grew 52% to $20 million, the result of a “strong performance” in the Quebec market and the Toronto street furniture contract—which went into effect Sept. 1.
“What [the Toronto street furniture contract] does is give us a solid platform with which to attract advertisers, particularly in the GTA,” said Greenberg in a conference call with analysts on Monday.
Greenberg, however, declined to specify the exact impact of the Toronto street furniture contract on Astral’s outdoor business. “To us it’s just an extension of our outdoor business in Ontario and we will not be separating it out in the foreseeable future,” he said.
Astral began offering advertising bundles of outdoor, radio and TV late last year, and Greenberg said early reaction from marketers has been “very encouraging.”
“It’s quite unique for an advertiser to have the opportunity to cover the local market with outdoor and radio stations. There’s more work to be done, but we’re very proud of the first two months.”
Astral’s TV revenues increased 7% to $129.5 million, with ad revenues up 12% and subscriber-related revenues up 6%. Greenberg said that the company’s TV operations—which include the pay service TMN and a host of specialty services including Teletoon—are largely unaffected by the writers strike in the U.S.
“We haven’t lost any programming and that will be the case at least for the next quarter,” he said. “The core of the business is movies, and that will not be affected for the entire year. The only thing that could be affected, six months out from now, are new series that would have debuted around July or August.”
Greenberg also said that Astral will continue to be opportunistic when it comes to growing the company. “We are open for acquisitions regardless of size,” he said. “Should there be a possible acquisition of a larger nature in any one of our core businesses, we would be delighted to address that.”
