Poor advertising market hits Fairfax profit
Fairfax Media, which publishes The Press and last year floated Trade Me on the NZX, has reported a 41 per cent drop in first-half profit, with subdued advertising markets on both sides of the Tasman weighing on earnings.
The Australian media company said net profit for the six months ending December 25 fell to A$96.7 million (NZ$124M), reflecting a 5 per cent drop in revenue to A$1.23 billion, and impairment and restructuring charges of A$39m.
Stripping out these significant items, the company produced an underlying profit of A$135.7m, down from A$172.3m in the same period last year.
‘‘While the results are disappointing, over the last six months Fairfax Media has driven change through the business and we have done it in the midst of a severe cyclical downturn in our major markets,’’ managing direc- tor Greg Hywood said.
He was referring to the company’s ‘‘Fairfax of the Future’’ turnaround plan which aims to save A$170m over three years by streamlining operations geared to support a print dominant environment.
The plan ‘‘recognises that many parts of our business were built at a time when the newspaper was king and print and classified advertising was the biggest drivers of our business success,’’ said Hywood.
Breaking down sales by segment, revenues at its metropolitan media operations fell 6.3 per cent, regional media fell 1.4 per cent, printing operations fell 10.5 per cent, while New Zealand media and broadcasting revenues declined 8.1 per cent and 8.3 per cent respectively.
Within these headline figures, the company said it saw additional digital sales traction, with revenue across the group up 14 per cent to A$189.8m.
Funds raised through
the partial float of online auctioneer Trade Me were used to pay down A$361m worth of debt.
Net debt stood at A$1.12 billion at the end of December, down from A$1.5b in June, and A$1.6b a year ago. An interim dividend of A2c a share was declared, up 33 per cent.
Fairfax said it would continue to be affected by tough economic conditions in its primary markets, with advertising revenues in January 7.5 per cent lower than a year earlier.