Fairfax Media has reported a 4.8% dip in revenue for the year to 30 June, however it is in better shape, reporting a swing back into profit.
The publisher reported net profit of $84 million, compared with a loss of $772.6 million in the previous year on revenue of $1.73 billion. It also achieved a 6% reduction in operating costs, thanks to its cost reduction programmes which have included job cuts across the board.
Fairfax's cash cow Domain is expected to be spun out of Fairfax in November, pending a shareholder vote at an Extraordinary General meeting.
Domain delivered 19% growth in digital revenue and a 12% fall in print ad revenue.
Domain’s operating expenses increased 17%, but its print costs fell 6%, largely as a result of a new magazine format. EBITDA also fell 6% in the first half as a result of investment, but improved in the second half.
Fairfax also updated the market on progress with plans to spin out the Domain group. Fairfax plans to retain a 60% stake in Domain, with the remaining 40% distributed to Fairfax shareholders. Media veteran and former Network Ten CEO Nick Falloon will be chairman of Domain. The board recruitment process is underway.
Fairfax chief executive and managing director Greg Hywood says: “Today’s result shows Fairfax is in great shape. We have delivered strong value for shareholders through growth and transformation initiatives.
“Our three publishing businesses are modern, cost efficient and sustainable across digital and print. In the context of the global structural change impacting upon the media industry, the fact that our publications remain profitable and sustainable is an outstanding achievement.
“The company’s underlying performance, combined with our strategic and valuable asset mix; and balance sheet strength – allows Fairfax to step into the future with great confidence. Fairfax will act decisively and appropriately – always in the best interests of shareholders – to take advantage of any opportunities created by the potential changes in media ownership legislation, as well as any opportunities to work more productively as an industry.”
Advertising revenue in Fairfax’s metro publishing arm fell 17% and digital subscriptions revenue increased 21%. Overall revenue fell 8%, while EBITDA increased 27%. All three of its mastheads, The Sydney Morning Herald, The Age and The Australian Financial Review delivered year on year growth, with circulation volume declines offset by higher cover prices.
It is plotting the launch of new digital products across all three mastheads, which Hywood says will “deliver deeper and more engaging experiences” and new apps for The Age and SMH.
“The new products will drive engagement, subscriber value and better outcomes for advertisers through new data-driven commercial solutions and advertising formats. The introduction of the new tech platform will allow for the retirement of legacy systems and cost rebasing,” says Hywood.
Hywood says video streaming platform Stan is going “from strength to strength”.
It is reporting a 150% rise in subscription revenue. It has close to 800,000 active subscribers and says subscriber numbers have continued to increases despite price rises.
Fairfax also outlined that it is continuing to implement cost-saving measures.
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