Fairfax Media has posted a net profit of $27.4 million for the December half, up 4.2 per cent on the previous year, led by a surge in Domain revenues.
Total group revenue was up 1.6 per cent to $958.1 million, with earnings before interest tax, depreciation and amortisation up 15.5 per cent, from $85.3 million to $98.6 million.
EBITDA for the Domain property business rose 73.8 per cent to $65.7 million, with advertising up for both digital and print.
Domain’s digital revenues were up by 37 per cent to $99.1 million, while print revenue was up 148 per cent to $58.4 million, a benefit of the full consolidation of Metro Media Publishing, acquired by the company in January last year.
Revenue for Fairfax’s Metropolitan Media segment – which includes Domain, Life Media & Events and digital ventures, such as video streaming service Stan – was up 10 per cent at $458 million.
Fairfax chief executive Greg Hywood said the results were underpinned by the company’s policy of confronting change in the media industry head on, pointing to a lift in group digital revenues of 20 per cent.
“Our strategy to accelerate our growth businesses through operational investment and acquisitions lifted group expenses by 3.2 per cent. This included investment in Domain Group, Life Media & Events, and the merger of our radio assets to form the enlarged Macquarie Media.
“Our continued focus on cost reduction and efficiency in our publishing businesses drove group publishing costs down by 6 per cent – that’s $38 million.”
Mr Hywood said there were modest declines in print circulation revenue and print advertising was 14 per cent lower. This was partly offset by an increase in digital subscription revenue of 14 per cent.
“We have made it clear many times that we are managing a structural shift in publishing from print to digital”
“We have made it clear many times that we are managing a structural shift in publishing from print to digital,” he said.
“We continue to adapt our business model to this reality, which involves an intense focus on cost reduction and the creation of new revenue opportunities. We have managed this well over recent years and have absolute confidence we will continue to manage it in the future.
“This will inevitably mean an even stronger emphasis on digital publishing. We are ready to meet this significant opportunity as consumer preferences demand.”
Mr Hywood gave shareholders a rundown on Fairfax’s other main publishing divisions.
Australian Community Media
Total revenue declined 11 per cent, with revenue from advertising down 12 per cent in the half. Difficult conditions prevail in regional and agricultural markets.
“Progress of ACM’s transformation program can be seen in the 9 per cent cost reduction delivered for the half. Closure of some loss-making titles has had some negative impact on revenue,” Mr Hywood said..
EBITDA of around $45 million was 20 per cent lower.
New Zealand Media
Advertising revenue was down 9 per cent in local currency terms. Digital revenue growth of 43 per cent reflected the continued strong momentum at Stuff.co.nz.
Stuff.co.nz continues to be the number one domestic website in New Zealand, increasing its unique audience 5 per cent year-on-year.
“The cost decline of 7 per cent reflects strong cost management whilst continuing to invest in the digital business,” Mr Hywood said.
EBITDA declined 12 per cent to NZ$30 million.
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