Fairfax reveals full year results; posts $890m loss

Sarah Homewood
By Sarah Homewood | 10 August 2016

Fairfax Media has revealed its full year results, with the publishing house posting a net loss after tax of $893.5 million.

Revenue for the business also fell 2% to $1,83m when compared to the corresponding period. The publishers earnings before interest, tax, depreciation and amortisation (EBITDA) was also down 1.4% to $283.3m.

Unsurprisingly the company's Australian Metro media division, which houses its flagship mastheads such as, The Age and The Sydney Morning Herald, saw its advertising revenue fall 15%, CEO of Fairfax Media, Greg Hywood, put down to weakness in retail, communications and finance categories.

This ad revenue loss was however is offset by the growth in ad revenue seen by its digital ventures, which rose by 36%.

The publisher also revealed that it's removing its digital circulation numbers for The SMH and The Age from the Audited Media Association (AMAA) reporting. It will now report the papers digital subscription numbers as part of its financials.

In spite of the losses reported, Hywood says: “Today’s result is proof that the transformation of Fairfax Media over recent years has succeeded. The stable top-line revenue and EBITDA make it clear that we have reshaped this company into a high-value, broadly-based, digital rich business.”

He also outlined that digital and non-print earnings now constitute more than 40% of Fairfax’s EBITDA, which is predicted to hit 60% in 2017, a number that clearly indicates the firm's pivot away from print.

“We are delivering a higher quality of earnings from our more valuable segments – including Domain, digital publishing and events. This single fact underlines the extent of the transformation of the business in recent years,” Hywood says.

Fairfax's full year results come as the business revealed last week it was splitting out the financial results for Domain. The move sparked rumours the publisher is set to sell Domain, however Hywood was quick to quash those ideas saying: “Domain makes a significant earnings contribution and remains an integral and growing part of Fairfax. We have no plans for that to change.

“We continue to invest in Domain to make it stronger and extend its business model beyond listening to capture the immense opportunity in the broader real estate ecosystem,” he added.

Domain is one clear positive for the publisher, with this section of the business delivering a 33% growth in revenue and 40% increase in EBITDA, which was underpinned by the a 50% growth in digital EBITDA. Hywood says that a key reason for this growth was an uplift in audience, with average monthly visits jumping by 82%.

It also isn't all bad news for the publishing side of the business, with the revenue generated from paid digital subscriptions rising to $38m, which is an uplift of 17%. Hywood also outlined that the publisher's overhaul of its structure had paid off – seeing a 4% decrease in costs.

Fairfax also counted Stan as a winner, revealing that the SVOD player was “more than meeting its business targets”. It was also revealed that, as of June, Stan had 1.1m sign-ups and more than 500,000 active subscribers.

When it comes to Australian Community Media, the publisher's regional offering, Hywood says that while cost efficiencies were achieved, EBITDA still declined roughly 10% to $90m.

“ACM’s total revenue declined 11%, held back by a 12% decline in advertising revenue, which continued to be affected by weakness in supermarket-related spend. There was some offset from print real estate. Excluding transformation impact of closing unprofitable publications, underlying advertising revenues were down 9%. Circulation revenues declined, reflecting lower retail volumes.”

It was revealed yesterday that the publisher could be talks to sell this arm of the company, and Hywood has done noting to quash the spec, saying: “Difficult conditions continue in regional and agricultural markets. We are undertaking a review of ACM to develop initiatives and identify opportunities.”

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