Profit up at Fairfax after cuts

Fairfax Media says it has made significant progress cutting the costs of its New Zealand arm while diversifying the business.

Chief executive Greg Hywood said the trans-tasman publisher and e-commerce company was in ‘‘great shape’’ after reporting a 7.6 per cent rise in its underlying net profit to A$143 million (NZ$155M) in the year to June.

Its shares rose 2 per cent to A$1.03 when trading opened on the Australian stockmarket following the result.

Fairfax reported a 7 per cent drop in the revenues of its New Zealand business and an 8 per cent decline in the operating profit of its New Zealand business, which cut costs by 6 per cent.

Internet provider Stuff Fibre, which it launched in September, was showing ‘‘early promising signs’’, it said in its annual report.

Fairfax NZ’S digital revenues grew 29 per cent and communityfocused social media business Neighbourly – of which it owns 70 per cent – broke into the black during the second half of the year, Hywood said.

The past year has seen the Commerce Commission reject a proposed merger of Fairfax NZ with rival publisher NZME, publisher of the New Zealand Herald, in a ruling that has been appealed to the High Court.

It also saw two private equity suitors conduct due diligence on the entire business, before deciding not to lodge takeover bids.

Fairfax NZ’S publications include the Dominion Post, the Sunday Star-times and The Press.

Fairfax’s statutory net profit of A$84m compared with a net loss of A$772m last year, which was marked by huge write-downs. Revenues were down 5 per cent to A$1.74b.