Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Fairfax Media reverses slide in NZ earnings

Fairfax Media reverses slide in NZ earnings as cost cuts offset drop in ads, circulation

By Jonathan Underhill

Aug. 14 (BusinessDesk) - Fairfax Media Group reversed a slide in earnings from its New Zealand business as cost cutting helped make up from a continued decline in advertising and circulation.

Earnings before interest, tax, depreciation and amortisation rose 3.1 percent to $80.2 million. Costs fell 7.3 percent to $318.6 million, making up for a 5.4 percent decline in revenue to $398.9 million. Advertising sales in the year fell 5.2 percent to about $269 million while circulation declined 6.6 percent to $117.9 million.

Fairfax chief executive Greg Hywood said print advertising in New Zealand isn't declining at the same pace as in Australia and benefited from a strong agricultural sector, stabilisation in property advertising and local government spending, although there was "weakness in a number of categories including retail and employment.

Fairfax's cost cutting in New Zealand has included axing workers and sharing some printing with rival APN News & Media. Fairfax, which publishes the Dominion Post, Press and Sunday Star Times newspapers and operates the Stuff website, slashed the value of its New Zealand mastheads by more than 80 percent in 2012 to recognise the decline in traditional publishing.

The Fairfax group posted a profit of A$224.4 million in its latest year, compared to loss of A$16.4 million a year-earlier, when it took impairments of A$444 million on print assets and intangibles. In the latest year, one-time items netted out as a gain of A$66.7 million. Sales fell 3 percent to A$1.97 billion.

The company is two years into a three-year restructuring programme it calls Fairfax of the Future, which is targeting annualised savings of A$311 million in 2015. Net costs to deliver the programme through 2015 are expected to be about A$290 million, including A$245 million for redundancies, capital spending of A$86 million and operational spending of $25 million.

"Today's result underlines the ability of Fairfax to deal with enormous structural changes impacting upon the industry," Hywood said. "We have stabilised earnings and completely remade a legacy-based, vertically-integrated newspaper business into a genuinely multi-platform media company."

The company will pay a final dividend of 2 Australian cents a share, bringing total payments for the year to 4 cents.

Shares of Fairfax last traded on the ASX at 88.5 Australian cents and have climbed 62 percent in the past year. The stock is rated a 'hold' based on the consensus of 12 analysts polled by Reuters, with a median price target of 91 Australian cents.


© Scoop Media

Business Headlines | Sci-Tech Headlines


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news