Stuff worst performer in Fairfax group, down 15%

Stuff has been the laggard among Fairfax Media Group’s transtasman businesses in recent months and may be sharpened up for divestment if a merger with Australia’s Nine Entertainment goes ahead.

The Australian media companies gave a trading update before lodging documents detailing the A$2.2 billion ($2.4b) merger that will put TV channel Nine in the driver’s seat.

While Fairfax group revenue since June 30 was down 5 per cent, the New Zealand business was the worst performer with a 15 per cent decline in New Zealand dollar terms and 16 per cent in Australian dollars.

Stuff isn’t considered core for the merged entity, having previously been touted by Fairfax group chief executive Greg Hywood as a potential growth engine.

Last year he said the hyper-local Neighbourly website had turned profitable and had created a compelling digital platform with Stuff’s strong online audience.

Fairfax’s New Zealand arm this year formally adopted the website’s Stuff moniker as its registered name.

Fairfax still has the option of pursuing a Supreme Court appeal to clear a merger with its New Zealand rival NZME. Stuff chief Sinead Boucher last month said consolidation remained essential for the wider industry.

Under Boucher’s watch, Stuff has accelerated its digital-first approach, closing down or selling a third of its largely unprofitable community and regional publications.

The New Zealand unit accounted for A$16.2m of the A$36m the group spent on restructuring and redundancies in the June year. Stuff’s earnings before interest, tax, depreciation and amortisation shrank 27 per cent to NZ$40.5m.