Southern Cross Media Group (SXL)

Shares / Stock Code

SXL

Stock Exchange / Sharemarket

ax

Southern Cross Media Group (SXL), formerly Southern Cross Media Group) invests in media and owns two major assets: Macquarie Southern Cross Media - Radio and Television and a number of American local newspapers through 100% ownership of American Consolidated Media (ACM). MMG's investment mandate is wide, requiring investments to be media assets with stable earnings and cash flow, strong market positions, barriers to entry and potential for further earnings improvement. MMG is externally managed by MMML for a Base and Performance fee. Investors can trade Southern Cross Media Group shares on the Australian Stock Exchange (ASX).

SXL listed on the Australian stock market in 2005 as a Macquarie fund, Macquarie Media Group, and was the owner of a portfolio of regional radio stations. Following listing, the group made a number of other acquisitions (some of which have since been divested), including the 2007 acquisition of the free-to-air television operations of Southern Cross Broadcasting. Following a vote in December 2009 to internalise management and corporatise the business structure, the group's name was changed to Southern Cross Media.

SXL operates radio stations in 44 licence areas across six Australian states - the largest number of licence areas for any radio operator in Australia. Its revenue streams are stable due to the geographic diversity of stations and large diversified base of local advertising clients. Additionally, more than 75% of radio revenue is derived from local advertising clients. As local advertising is typically more defensive than national advertising, this provides SXL with more stable revenue streams.

The five-year moratorium on analogue broadcasting licences, which began in 2004, affords protection against new station launches. However, radio competes against incumbent regional radio operators, the largest of which include Broadcast Operations (32 licences) and Grant Broadcasting (16 licences). Customers are predominantly local advertisers, which account for more than 75% of revenues.