TORONTO – Led by its television segment, Corus Entertainment marked its fourth quarter and the end of fiscal 2014 with increases in revenues and profits. It also, however, lowered its guidance for 2015.
Consolidated revenues for the three months ended August 31, 2014 increased 11% to $201.6 million from $181.9 million last year, while consolidated segment profit grew 15% to $58.3 million from $50.9 million last year. Net income attributable to shareholders for the quarter was $23.7 million, up from $11.9 million last year, and included business acquisition, integration and restructuring costs of $5.6 million and an investment impairment recovery of $1.0 million.
For fiscal 2014, consolidated revenues were $833.0 million, up 11% from $751.5 million last year, and consolidated segment profit was $289.6 million, up 15% from $251.0 million last year. Net income attributable to shareholders for the year was $150.4 million, down from $159.9 million last year. That total included a non-cash gain of $127.9 million resulting from the re-measurement to fair value of Corus’ 50% interest in Teletoon which was held prior to consolidation on September 1, 2013, radio broadcast license and goodwill impairment charges of $83.0 million, capital asset impairment charges of $1.2 million, business acquisition, integration and restructuring costs of $46.8 million, an increase in the purchase price obligation of $3.3 million, and investment impairment related charges of $2.3 million.
Free cash flow for the year was $175.3 million compared to $154.7 million in the prior year.
Corus’ television segment revenues increased 16% in both Q4 2014 and for the fiscal year, to $159.8 million and $660.4 million respectively, while TV segment profit grew by 8% in Q4 2014 and 19% for the fiscal year to $57.0 million and $273.3 million.
Radio segment revenues dropped by 5% in Q4 2014 and 6% for the fiscal year to $41.7 million and $172.6 million, respectively, and profits fell 19% in Q4 2014 and 18% for the fiscal year to $9.5 million and $45.5 million.
Other highlights from Corus’ financial results include:
Television
– Specialty advertising revenues increased 26% in Q4 2014 and 36% for the fiscal year;
– Subscriber revenues increased 26% in Q4 2014 and 21% for the fiscal year;
– Merchandising, distribution and other revenues dropped 16% in Q4 2014 and 28% for the fiscal year; and
– Segment profit margin of 36% in Q4 2014 and 41% for the fiscal year.
Radio
– Segment profit margin of 23% in Q4 2014 and 26% for the fiscal year.
Corus admitted that its fiscal 2014 financial results were below its internal expectations, and attributed them to a weak advertising market, lower than anticipated pay television subscribers, and slower actual Canadian economic growth than anticipated. It subsequently lowered its 2015 segment profit guidance range by $40 million, to between $300 million and $320 million.
“In fiscal 2014, with the successful integration of our newly acquired assets, Corus delivered double-digit revenue and segment profit growth, matching our best ever earnings and margin performance”, said president and CEO John Cassaday. “Looking ahead, although we have lowered our segment profit guidance for fiscal 2015, we are encouraged that with the recent repositioning of key large market radio stations, ongoing ratings strength on our core TV networks and our entry into new markets, we are well positioned to deliver growth and increase the value of our strong brands.”
