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Total Regional revenue finished the year at 361.6 million 0.4 down on prior year revenue principally due to the weak regional television advertising market. Regional advertising revenue of 337.3 million was in line with the prior year with gains on radio offsetting declines on television. Television revenues performed well in what is a challenging market for free to air television. Overall advertising revenues were back 2.7 in a market that declined 4.5 with declines from national clients being partially offset by growth in local clients. The Group continues to invest in television content through the Big Bash League and the Glasgow Commonwealth Games with both events driving growth in local client revenues. Investment in these events along with other improvements in Channel Ten programming has led to an improved average audience share of 21.1 compared to 20.0 in 2014. This improved ratings position will provide opportunities for growth in national client revenues in the future. Regional radio continues to be a consistently performing asset within the Group with its broad and diversified client base delivering advertising revenue growth of 3.5 for the year. Local client revenues have continued to perform up 1.3 for the year however the real success story has been the strong growth in national revenues which are up 8.9 on 2014 partly due to state election activity. Regional EBITDA finished the year at 114.7 million up 1.9 on the prior year. The EBITDA growth is due to a change in the mix of advertising revenues with improving radio revenues delivering higher margins than reducing television revenues. Metro The Metro business consists of two complementary radio brands operating in the Australian capital cities that target different audience demographics the Triple M network targets males in the 25 to 54 age bracket and Todays Hit Network is skewed towards females in the 18 to 39 age bracket. The Metro radio division reported revenues of 224.1 million in 2015 down 9.9 on the prior year and EBITDA of 57.8 million down 21.0 on prior year EBITDA of 73.2 million. Radio advertising revenues representing 204.0 million out of the total reported revenue were down 11.1 on the prior year. The Triple M network represented 120.7 million up 8.4 and Todays Hit network represented 83.3 million down 29.6. Digital revenue was up 13.1 on 2014 however it continues to represent a small proportion of total advertising revenue. Overall the metropolitan free to air radio market grew by 5 with the Groups market share declining from 32.9 in 2014 to 27.8 in 2015. Competition within the female 18 to 39 demographic has intensified over the past few years with the establishment of competing radio services in Melbourne and Sydney which have taken audience share from Todays Hit Network and led to a significant loss of market share. The breakfast show in Sydney changed in January 2015 and is still in its infancy and early signs are that the return of Hamish Andy to the national drive show will assist in regaining some audience share across the network. The Triple M network has continued to strengthen its audience position and is now the most listened to network in Australia for men. This growth in audience has led to 9.4 million in incremental revenue with 65 of this growth coming from agency clients. Whilst revenue declined by 24.6 million EBITDA has declined by 15.4 million reflecting the relatively high fixed cost nature of the business. Financial Position The Group maintains its capital management strategy to reduce the leverage ratio to 2.5 times EBITDA. Net borrowing Group debt has reduced by 87.4 million during 2015 to 506.9 million Group net debt reduced by 81.0 million. The initiatives in place to achieve this included stabilisation of operating results increased cash flow through improved debt management cash conservation through underwritten DRP and review of non-core assets. During the year a non-core property was disposed of which resulted in proceeds of 9.0 million being used to reduce net debt. The Group wide review of assets has identified further opportunities to divest non- core assets that the Group is assessing. The Group entered into a 2 year non-recourse receivables financing facility in June 2015. This facility will further improve working capital and reduce net debt and it will provide a lower cost of funding than the senior debt facility. In February 2015 the Group negotiated a temporary increase in the leverage ratio to 3.75 times to December 2015 thereafter reverting back to 3.5 times. It is pleasing to report that as at 30 June 2015 the leverage ratio was 2.84 times. Net assets for the Group have reduced from 1.2 billion to 936.8 million as a result of the impairment losses recorded in 2015. Business Strategies and Prospects for Future Financial Years Strategic Update The Group has continued to implement its operational strategy which comprises Re-establish Metro Share Content reinvestment strategy gaining traction positive survey results in both networks1 yet more work to be done Return of Hamish Andy adding to audience increases across Todays Hit network Triple M remains 1 network for men around the country Continual evaluation and renewal across all stations and all key timeslots Operational Efficiency Strengthening executive and management team skills and experience Improved focus on strategic initiatives and operations priorities most importantly ratings growth and revenue maximisation Debt reduction through improved working capital management and lower financing costs New investment and realisation in technological efficiencies TV Affiliation Channel Ten affiliation expires June 2016 planning is underway Improved recent ratings performances strengthening sales enquiry Leverage Digital 13.1 year-on-year growth in digital revenues Engaging quality content well procured is our future Partnered with Triton Digital to launch a2x Australias first digital audio advertising exchange 1 GFK Radio Ratings 2015. 15 SOUTHERN CROSS AUSTEREO ANNUAL REPORT 2015