Fairfax boosts profits despite further fall for publishing revenues
Fairfax has reported improved profits for the first six months of the financial year making $86.4m, and its first rise in earnings before interest, tax, depreciation and amortisation (EBITDA) since 2010.
The company has also sold FRG Asia, InvestSmart and Stayz over the period making $221m on the transactions, which equated to a profit of $178m when put with ordinary earnings. However, revenue for the first six months was down 1.2 per cent at $1.083bn.
Whilst the publishing unit reported a revenue decline of 7.1 per cent the EBITDA increased to $81.5m, up 52 per cent on the corresponding period last year, while property website Domain grew online revenue 33 per cent , while the Fairfax of the Future program is reported as delivering $260m of annualised savings so far.
However, radio revenues dropped 0.8 per cent in a market that grew 2.8 per cent last year, as flagship station 2UE struggled for ratings in Sydney.
You can’t cut your way to success, Greg. It would be good to see the actual $ contribution of these so-called new revenue streams.
Profit and net cash are both down sharply. Selling trademe has made a huge hole.
Fairfax is now a fragile print business with zero revenue growth in any part and nothing to show for a lot of hot air about events and such.
Spin. It’s not much good at the bank.
Shares up 20% and most analysts calling this a great result. Digital going great guns. Still life in (quality) news media.
Great to see the QE2 has turned around.
Its certainly turning it around a lot faster than other media businesses under pressure. The next 12 months will be key. Huge costs out, they now need revenues up.
Not bad work Hywood. You inherited a business 5 minutes to midnight.
I work at Fairfax. To all the naysayers that get on mumbrella willing the end of Fairfax – we’re so fine. It’s a completely different business than it was 3 years ago and thank God for that. The excesses and egos are gone. The vibe is optimistic. 11 Walkleys and 2 Royal Commisions delivered from our journalism in the last 18 months. We deliver a public service. Why would anyone want a media landscape dominated by News Corp? Sheesh, you’d think a few Australians might be happy for us.
Analysts expected worse. There’s no great support for the stock, but the dividend is doubled.
“11 Walkleys and 2 Royal Commisions delivered from our journalism in the last 18 months. We deliver a public service. Why would anyone want a media landscape dominated by News Corp? Sheesh, you’d think a few Australians might be happy for us.” Believe me, a lot of us are! Very happy! It brings me much comfort that Fairfax journalism isn’t going anywhere yet, based on this result. Who else would hold the crooks in NSW to account? Clearly not the Police, commercial television or (& especially) the Daily Tele. The SMH is a real public asset.
Fairfax and Proud.
Couldn’t agree more. Keep up the good work. I will continue to financially support the only commercial media group in Australia that does real journalism. God help this country if we are ever reduced to just having the garbage that News Corp dishes out to the low IQ members of our community that consume that trash.
Good result but expected. Can’t cut to greatness but you can cut costs to a sensible level and that is what they have done. Compare net debt with three years ago and it’s a pretty respectable display of operational change.
‘Fairfax and proud’: I understand that lots of changes have taken place at Fairfax in order to make it a better business and this can only be a good thing. Walkley or no Walkley, the numbers speak for themselves and it really isn’t pretty. There are no new revenue streams to replace lost $’s
Also ‘We deliver a public service’….Really? Last time i looked you were a commercially driven business, not the ABC. Maybe its this attitude thats driving the business into the ground
@Shamma et al: There was a time when The Age, The SMH, AFR etc did not compare with the Hun, Tele etc. The fact that you make those comparisons says a lot about where Fairfax has gone.
The plain fact is that the leadership does not really care about the product, but about keeping their jobs. The things they have done and are doing have both removed the potential for growth (selling TradeMe etc) and undermined the value of core brands.
The Age in particular is sadly neglected, the SMH is shrunk to a shadow and the AFR is totally confused and reactive. If you want to see the future, just look at the web sites.
We all love what Kate McClymont achieved. But do not kid yourself with any thought that this sort of work is fostered.
Ah, having less cash on hand is good management, demonstrates it’s actually being used for something isntead of sitting around. If the cuts don’t result in below par product/service this is a good result. Still, the $2bn hit from last year was probably rolling in the hits they’re going to take until 2016 – very clever.
Fairfax does for governance what China does for Rolex