Highlights

  • Southern Cross Media Group (ASX:SXL) reported a statutory net loss of $13.1 million for FY26 following the Acquisition of Seven West Media.
  • Pro forma Revenue was $1,869.6 million, down 4.5 per cent, while pro forma EBITDA declined 12.8 per cent to $200.0 million.
  • Management reported $30 million of Merger synergies and is targeting $145 million to $150 million of annualised savings.
  • Group digital revenue across 7plus, LiSTNR and The Nightly reached $320 million, up 11 per cent.

Southern Cross Media Group (ASX:SXL) enters its first full reporting period following the acquisition of Seven West Media with a substantially larger media platform but a difficult Advertising environment. The combined company now spans television, radio, publishing and digital media, while management is implementing a sizeable cost-reduction program. FY26 showed that scale alone has not offset weaker advertising demand, making cost savings and digital growth central to the next stage of the company's strategy.

Latest Development

The transformational event was the completion of Southern Cross Media Group's acquisition of Seven West Media on 7 January 2026. Under the scheme, Seven shareholders received 0.1552 Southern Cross shares for each Seven share held, with the enlarged group subsequently combining Seven's television and publishing Assets with Southern Cross's existing audio businesses.

The combined company now includes the Seven Network and multichannels, 7plus, 7NEWS.com.au, The Nightly, The West Australian, The Sunday Times and PerthNow, alongside the Triple M and Hit radio networks and LiSTNR.

FY26 results released on 11 August 2026 included approximately six months of the acquired Seven Business within continuing operations. The group reported a statutory net loss of $13.1 million and did not declare a final FY26 dividend.

What the Numbers Show

On a pro forma basis, assuming the merged group operated across both comparative periods, gross revenue was $1,869.6 million, down 4.5 per cent. Pro forma EBITDA declined approximately 12.8 per cent to $200.0 million, while continuing-operations net profit after tax before significant items fell 40.9 per cent to $42.8 million.

On a statutory basis, continuing-operations revenue increased 162.7 per cent to $1.11 billion because Seven's results were consolidated into the group. Despite the larger revenue base, the company reported a statutory loss of $13.1 million.

Net Debt was $363 million, with reported Leverage of 1.8 times. The board did not declare a final FY26 dividend.

Why It Matters

The strategic rationale for the merger is based on scale across different media formats. Combining television, radio, publishing and digital platforms allows Southern Cross Media Group to offer advertisers broader audience reach while also creating opportunities to remove duplicate corporate costs.

Management reported $30 million of merger synergies and has expanded the cost-reduction program to target $145 million to $150 million in annualised savings, with approximately 250 roles removed by 30 June.

The company also gained television audience share during a weaker advertising market. Total television advertising declined 9.9 per cent over the year, while Southern Cross Media Group's television revenue declined 6.6 per cent. Television audience share reached 42.5 per cent.

Digital performance provides another important indicator. Digital revenue from 7plus, LiSTNR and The Nightly reached $320 million, up 11 per cent, while digital audio revenue increased 14.3 per cent.

Growth Catalysts

The largest near-term Earnings opportunity is the remaining cost-reduction program. Management's $145 million to $150 million annualised savings target provides potential earnings support if revenue conditions remain broadly stable.

Digital audio is another key area. LiSTNR provides a platform for shifting listening and advertising toward digital formats, while FY26 marked a period in which digital audio growth exceeded the decline in broadcast audio revenue.

The refinancing of the group's debt into a $569 million syndicated facility, with first maturities pushed toward FY30, provides additional time to integrate the enlarged company.

Sport and major events also offer potential support for early FY27 trading, alongside management's expectation for broadly stable television revenue, low single-digit audio growth and stable publishing revenue.

Risks Investors Should Watch

Advertising conditions remain the largest external risk. Southern Cross Media Group described the market as volatile, while weakness in advertising revenue remained substantially larger than the gains from market share.

Traditional television and radio face structural pressure from changing consumer behaviour and digital competition. Combining two established media businesses does not remove that pressure and increases the importance of digital transition.

Integration also remains a key execution consideration. Large-scale cost reductions can affect employee capacity and content operations if not carefully managed. Net debt of $363 million and leverage of 1.8 times EBITDA provide financial flexibility, but further EBITDA declines would increase balance-sheet pressure.

The absence of a final Dividend also means shareholders are currently relying more heavily on a potential operational recovery than on direct Capital returns.

What Happens Next

The next focus is execution of the $145 million to $150 million cost-reduction program and delivery against FY27 trading expectations. Investors will monitor whether annualised savings continue to build, whether digital audio growth remains above broadcast declines and whether television revenue can stabilise.

The broader advertising market will remain an important external variable. Major sporting events may support advertising Demand during FY27, but sustained improvement will depend on the wider market.

Capital management will also remain relevant, particularly whether the company can eventually restore dividends as integration and balance-sheet priorities become clearer.

Conclusion

Southern Cross Media Group (ASX:SXL) has materially expanded its scale through the Seven West Media acquisition, creating a broader platform across television, audio, publishing and digital media. FY26 nevertheless showed the limits of scale in a declining advertising environment, with pro forma revenue and EBITDA falling and the group reporting a statutory loss. The next stage depends on delivering the remaining cost savings, sustaining digital growth and stabilising traditional media revenue. Until those measures translate into improved earnings and cash generation, the strategic reset remains a work in progress.