Fairfax profit boosted by sales, revenue down

01:01, Feb 21 2013

Fairfax Media has announced a A$386.3 million (NZ$474.3m) net profit for the half year to December 31, boosted by the sale of its online directories business Trade Me and United States-based agricultural publishing arm.

Stripping out the proceeds of those sales, Fairfax's profit dropped almost 39 per cent to A$83m when compared to A$135.7m for the first half of 2011.

Revenue was down 7.1 per cent to just under A$1.1 billion.

Earnings before interest, tax, depreciation and amortisation (Ebitda) also fell 1.4 per cent to A$205.3m compared to the previous corresponding half, but when the Trade Me sale and other significant items are excluded, Ebitda fell more than 22 per cent to A$230.3m.

Earnings per share of 3.5 cents was down 39.7 per cent.

The bright spot in the figures was how the Trade Me sale helped the company chop its net debt figure by A$717m to a total of A$197m.

Revenue in Fairfax's New Zealand Media segment, which includes Stuff.co.nz, the Dominion Post, The Press, several regional newspapers and a stable of magazines, was down 2 per cent while underlying earnings before interest and tax were down 14.2 per cent to A$23.9m.

Fairfax chief executive Greg Hywood said the New Zealand trading environment continued to be "typified by soft print advertising with some signs of improvement in property advertising activity".

"Costs continue to be tightly managed and a focus on subscriptions has assisted in stabilising circulation revenue," he said.

Hywood said cost savings had contributed A$40m to Ebitda in the half and the company was on track to deliver A$169m in savings by June.

He said the earlier reported move to outsource the company's contact centres in both Australia and New Zealand to TeleTech would save as much as A$18m annually.

The company reported revenues for early in the second half were "9 per cent to 10 per cent" lower than the previous corresponding half.

"A sustained improvement in consumer sentiment is required in order to see an uplift in a number of our key advertising categories, and we note recent positive economic commentary in relation to the consumer economy," it said.

The company said it would offer a dividend of 1 cent per share to be paid on March 20 to shareholders as at March 6.