Fairfax Media is looking to growth from its real estate brand Domain and its events division, after a 3.9 per cent fall in underlying net profit to $143.4 million after tax in fiscal 2015 and a 5.3 per cent fall in revenues to $1.88 billion. Once significant items were included, full-year net profit was down 63...
Fairfax Media is looking to growth from its real estate brand Domain and its events division, after a 3.9 per cent fall in underlying net profit to $143.4 million after tax in fiscal 2015 and a 5.3 per cent fall in revenues to $1.88 billion.
Once significant items were included, full-year net profit was down 63 per cent to $83.2 million. There were $60.5 million in significant item charges after tax in fiscal 2015 for closed operations and restructurings, compared with a gain of $66.7 million in the prior corresponding period.
Earnings before interest, tax, depreciation and amortisation of $202.4 million were down from $371.3 million in the prior corresponding period.
Fairfax chief executive Greg Hywood said Domain Group was a key area for growth, with a 45 per cent increase in revenue for the year.
This helped the company to post top-line growth for continuing businesses for a full year for the first time in eight years.
“Overall revenue grew 0.3 per cent,” Mr Hywood said.
“Through organic growth initiatives and acquisitions we are moving to a position where the growth in our digital revenue offsets the decline in print. As we foreshadowed a year ago, we are investing in our growth businesses and ventures.”
These included Domain, Life Media & Events, as well as Stan, a video streaming joint-venture with Nine Entertainment. Stan has now registered more than 300,000 paid subscribers and was well on track to have 300,000 to 400,000 active subscribers by December.
“We have built one of the largest events businesses in the country in just two years, with revenue up 41 per cent year-on-year, reflecting strong organic growth, new event launches and the impact of acquisitions,” Mr Hywood said.
“The Domain Group businesses delivered strong revenue performance, with digital advertising revenue growth of 36.4 per cent. Domain.com.au saw revenue growth of 30 per cent.
“Strong momentum continued in Domain with agent subscribers up 20 per cent, listings up 16 per cent, and visits to our real estate sites up 30 per cent.” In the first five weeks of the new financial year, Domain.com.au revenues are up 53 per cent on the same period last year.
In terms of metro publishing, Mr Hywood said the re-scaling of the company’s printing operations for efficiency – and the adoption of new ways of delivering content – had helped sustain the unit’s profitability.
“There was a moderation in the underlying rate of decline in print advertising to 11 per cent for the year, against a 24 per cent decline in financial year 2014.
“Digital subscription revenue increased 36 per cent for the year, with total circulation and subscription revenues up 1 per cent.”
In other divisions:
Australian Community Media
Mr Hywood said Australian Community Media revenue declined 7.8 per cent, with revenue from advertising down 9.1 per cent for the full year, consistent with the first half trends.
“Declines in employment and automotive were contributing factors, along with weaker supermarket-related advertising in the second half. Print real estate advertising experienced an improving trend while local advertising was relatively stable.
“Adjusted EBITDA of around $101 million was 33.7 per cent lower than a year ago.”
New Zealand Media
“Our New Zealand business saw advertising revenue down 6 per cent for the year in local currency terms. Macroeconomic challenges weighed on the broader economy, particularly in the last quarter.
“Digital revenue growth of 38 per cent for the year and 52 per cent in the second half reflected the strong momentum at Stuff.co.nz and continued investment in product development and marketing.
“Cost control supported improved EBITDA performance in the second half, with a 5 per cent decline compared with the 12 per cent decline for the full year.”
“Our radio asset, which now takes the form of a 54.5 per cent shareholding in Macquarie Radio Network, benefited from the reverse takeover by MRN. Cost synergies commenced in FY15. The business is on track to achieve targeted $10 million to $15 million in annualised benefits in FY16. “MRN is well positioned to derive revenue synergies from the establishment of a genuine national network with the number one stations in Sydney and Melbourne. As MRN indicated this week, it expects FY16 EBITDA will be in the range between $20 million and $25 million.”