Fairfax and Nine to cut sales teams and offer improved advertising products following merger

Domain’s market update reflected the softening Australian property market with total revenue down 1% on lower new listings and auction volumes, particularly in Sydney and Melbourne. For the September quarter, new listings in Sydney were down 8% and auction volumes were down 22%. The Melbourne market’s new listings were down 1% and auction volumes were down 18%.

In addition, Domain’s costs were up 7%, largely driven by a restructure in the company’s digital media sales offerings.

Nine told the market its revenues were flat despite the metro free-to-air advertising market being slightly softer than expected, with the network’s share of spend improving over its competitors. The company said it continues to expect the group EBITDA [earnings before interest, tax, depreciation and amortisation] of $280-300m for the financial year, before specific items.

Fairfax Media’s revenues were 5% below last year’s and Metro Media was down around 1%. Regional and suburban publisher Australian Community Media was down around 10%, while Macquarie Media was up 3%.

The market market reacted poorly to the updates with both companies’ shares dropping sharply. At the time of the merger announcement in July, the combined stock value of the two businesses was $4.2bn, on Friday it was $3.2bn. According to the information pack, the merged group has a book value of $3.1bn.

The merger, which is still to receive approval from the competition regulator, is also subject to a vote by Fairfax shareholders at a special general meeting on November 19. If the transaction passes the shareholder and regulator tests, the combined company is due to start trading on December 10.