Austar chief executive John Porter expects a difficult second half given the current consumer environment.
The longtime boss of the regional pay-TV provider also expects the competition watchdog will allow Foxtel’s proposed takeover of Austar.
He said the $2.5 billion takeover at $1.52 per share would proceed because of the “compelling industrial logic to bringing Austar and Foxtel together”.
The Australian Competition and Consumer Commission (ACCC) has raised some concerns about the proposed tie-up in an initial statement of issues.
“We are very confident that the ACCC issues will be resolved once further evidence is taken into account,” Mr Porter said during an investor briefing to discuss the company’s financial results on Friday.
“We are working very vigorously and diligently to create that evidentiary base to take to the competition commission.”
In an investor presentation lodged with the Australian Securities Exchange, Austar said there could be a delay in the transaction timetable if the ACCC’s issues were not resolved by the end of September.
“Assuming the ACCC issues are resolved by the end of September, implementation of a scheme of arrangement (is) likely to be in either December 2011 or early 2012,” Austar said.
Mr Porter said Austar’s subscriber growth had been weak in the current quarter and existing customers were seeking cheaper packages, with the consumer environment was one of the most negative he had experienced.
“We will be lucky to keep our nose above water at this point,” Mr Porter said.
“Hopefully, things will start to sort themselves out, but right now it is hard to see where the stimulus is going to come from.
“It seems that no matter what we throw at the customer to try to get them to act, they are still reticent, they are sitting on their hands.”
Mr Porter said subscriptions through Harvey Norman stores had dropped more than 50 per cent over the past four to five weeks.
Also, he said the free-to-air broadcasters’ new digital channels had made people less willing to shell out for pay-TV, and proved more a popular alternative than he had initially anticipated.
Net profit for the six months to June 30, 2011 rose by 328.5 per cent to $88.66 million, compared with the previous corresponding half, on flat revenues of $351.75 million.
No dividend was declared.
The company added 8,609 subscribers in the three months to June 30, 2011 – up about two per cent from the prior corresponding period – to 764,250.
This helped claw back some lost ground after subscriber numbers dropped sharply in the previous three months due to the natural disasters in early 2011.
The company’s shares closed down one cent at $1.05.
