Fairfax suffers dive to $63.8m annual loss
FAIRFAX Media has swung to a full-year loss, hurt by its regional and New Zealand operations plus restructuring and redundancy costs, in what may be its last financial results as an independent company.
The 177 year-old media group – in the process of being taken over by Nine Entertainment – reported a net loss of $63.8 million after booking significant items totalling $188.7 million for the year ended June 30, mainly from impairment charges at its regional unit Australian Community Media (ACM), and New Zealand division Stuff.
Fairfax had booked a net profit of $83.9 million in 2016/17. Underlying annual earnings – which excludes significant items – rose 1.2 per cent to $274.2 million, driven by growth at property listings group Domain and the metropolitan newspapers and radio businesses, as well as lower corporate costs.
Fairfax’s annual revenue fell 3.1 per cent to $1.69 billion, with revenue down across its four divisions, Metro, ACM, Stuff and Macquarie Media. Only Domain reported an increase in annual revenue, up 11.5 per cent to $357.3 million.
Revenue in the first six weeks of the new financial year is down five per cent from the same period last year, hurt by Fairfax’s events business, closure of loss-making publications in New Zealand and ACM.
ACM is feeling the pain of the drought in NSW and Queensland, Fairfax chief executive Greg Hywood said.
Fairfax, like other media companies, has struggled to get consumers to pay for news, with many used to getting their news online for free.
It has overhauled operations in recent years by placing premium content behind a paywall, cutting staff and closing publications, in a bid to compete more effectively against rival News Corp and digital giants Google and Facebook. Fairfax spun off Domain last year, retaining a 59.4 per cent stake.
Mr Hywood said corporate overheads fell 51 per cent to $23.5 million in 2017/18. “Fairfax is in good shape – and that’s the reason Fairfax shareholders have the opportunity to benefit from a step-change in growth through the proposed combination of our company with Nine Entertainment Co,” Mr Hywood said.
Nine announced its takeover of Fairfax on July 26 – a deal that will create a $4 billion media giant. The two companies expect the deal to be completed before December 31, subject to regulatory approval.
Fairfax shares closed 1.7 per cent lower at 87.5 cents.