Annual Report to Shareholders 1997

Review of Operations

Richard Burns, General Manager

Organic growth continues to be a key factor in the development of the Broadcasting division, as twelve new FM licences are brought into service. Under Section 39 of the Broadcasting Services Act, existing AM stations in solus regional markets can add an FM service.

This will give a significant boost to what is already the largest holding of commercial radio licences in Australia. When all the "Section 39's" are on stream the Broadcasting division will be operating a total of 37 AM and FM licences in Western Australia, Queensland and South Australia.

In the process of implementing the expansion programme the Division is breaking new ground. As the HOT FM stations are launched in Western Australia they will coalesce into a State-wide network broadcasting Western Australian news and information as well as contemporary music around the clock. This material will emanate from a programming hub in Bunbury and will be delivered to the network via state-of-the-art digital satellite technology. Similar technology is planned for the Queensland radio stations. This investment in the company's own satellite delivery systems is being made to capitalise on the cost-efficiencies and economies of scale inherent in owning such a large number of stations.

In the last year, the RadioWest network posted record revenues and profits with the Kalgoorlie and Bunbury radio stations leading the way. The radio station 6NA Narrogin was relocated from its out-of-town site to the town's commercial area.

The Queensland stations' results were affected by the slower State economy and a cutback in tourism numbers, particularly in Far North Queensland. During the year the Australian Broadcasting Authority forced the company to divest ownership of 4AM Mareeba, due to a demographic overlap in license areas with 4CA and HOT FM Cairns.

A number of management changes in Queensland led to a much improved second half performance, and the Queensland radio network is well-placed for strong results in the year ahead.

List of broadcasting licenses