Fairfax revenues down but profits up as Hywood thanks staff for being a ‘shining example’ of ‘innovation’

Hywood might have got no bonus, but you’d have to say that his bonus is keeping a hugely overpaid job. Hywood’s spin is out of control. “Resetting the cost base”, “cost out”, etc etc. What he means is that his main effort again this year was sacking experienced staff and replacing them a smaller number of inexperienced – cheaper- staff. His claims of innovation go unquestioned, despite the lack of evidence. His claims of a new publishing “model” go untested despite the lack of evidence. He relies totally on Domain, which he does not run.
Now Hywood will need to explain how Domain actually works and, one suspects, why TPG and H&F looked but did not make an offer. There’s a clue in the fact that despite claims to the contrary, Domain’s profit margins are falling. REA’s are much higher and did not fall this year despite a writedown. Of course, there’s also the problem that the print titles are very unwell. Their collapse will certainly cause severe damage to Domain.
Finally, Hywood will have to explain how the real estate deal in Domain works. Is it true that the incentives for advertising in Domain are not charged to the P&L? If they are on the balance sheet, will the “float” allow the agents to cash in? If so, what happens to the incentive????

“Next-gen publishing model”, “innovation”, “significant enhancements to the product suite” ? Really? Where? What? Sounds like all those significant new revenue streams that Hywood was spinning madly about a few years back that have come to nought (Marketing services for small business, Data, Events….). Why, indeed, do none of the so-called smart analysts ever question him on this puffery….

Bad set of numbers if you read the whole report:
– Non-Domain digital ad revenue dropped by $12.4MM (both print and digital mastheads in permanent decline now).
– Domain margin shrinking fast (and will further deteriorate as REA holds revenue in cyclical downturn).
– Domain profit actually dropped year on year

Profit gains purely from cost cutting in metro. Fairfax is in permanent decline.

Never fear! All this yet-to-be unveiled innovation and new products will save the day!

It’s ok the new product is almost here. Having less content and ads will surely save the day. Using WordPress is also unique in market.

http://www.brisbanetimes.com.au/redesign

Fairfax claims big growth in subscriptions which I think is very odd. I loved my SMH and AFR but I have not had subscription to either for about five years and rarely buy either at the station on the way to work.
The news value is near zero and the commentary banal. In fact the AFR seemed very proud to have a prominent gossip writer who was permanently parading his drunkenness. Let’s hope that they die away and something more aligned with readers emerges.

Allure Media and HuffPo get a single line mention in the Annual Report which demonstrates how little return there is from these dud investments. The actual revenue though is still unknown as the ‘diversified’ businesses now sit under the Metro Media reporting line so it’s impossible to understand whether Allure’s stable of click-bait crap is another King Content style business or a successful strategy