Corbett: Still fight in Fairfax
On a day when Fairfax Media's shares briefly hit a record low of 50 Australian cents, chairman Roger Corbett came out swinging, saying his board was doing all that it could to see its way through an advertising downturn and the move from print to digital.
While Corbett said he was concerned by the company's falling share price, there was little he could do other than to support the management team as they traded their way through a ''significant transitional change''.
''We are a business that earned A$500 million EBITDA (earnings before interest, tax, depreciation and amortisation) last year and there are not too many newspaper groups around the world that did that, and we are more probably advanced with the development of digital sites than most other companies in the world and certainly in Australia,'' he said.
Corbett has come under concerted attack from the mining magnate Gina Rinehart, who owns just under 15 per cent of Fairfax - the owner of stuff.co.nz - and is the largest shareholder.
In June Rinehart called on him to resign if he failed to meet a ''performance milestone'' of returning the share price to 87Ac and failed to reverse ''the five-year decline in paid circulation and revenue'' before November's annual meeting.
Corbett refused to discuss his response to Rinehart, nor would he be drawn on how low the share price could go.
''I can't change the share price and the sharemarket. All I can do is support management in addressing the broader strategic issues ... and that's what we are doing and I'm confident that we are doing that appropriately and effectively. Is the share price a concern to me? Of course, but I can't do more than address these issues.''
Earlier this month Corbett appointed an ally of Rinehart, the fast-food entrepreneur Jack Cowin, to join the board, three weeks after knocking back Rinehart's push for three board seats. Cowin has yet to attend a board meeting, Corbett said.
Later this month Fairfax reports its full-year results and analysts are expecting a 6.5 per cent decline in revenues to about A$2.3 billion, with JP Morgan yesterday flagging a 19.5 per cent decline in earnings to A$491 million.
Even with the shares losing ground, Corbett said there were no covenants on Fairfax's A$813 million debt that were linked to the share price. Fairfax yesterday closed down 2.8 per cent to 52.5Ac.
Next year the publisher will shrink its Monday-to-Friday editions of The Sydney Morning Herald and The Age to tabloids and charge for its websites. Asked as to how long printed papers have got, Corbett said: ''I personally think some form of written papers will continue for a long time'', although he was not prepared to put a time frame on it.
Double-digit declines in circulations at the company's mastheads did not faze him. He reiterated that management was committed to stripping out unprofitable newspaper sales but he would not be prepared to say at what point it became unsustainable for advertisers.