Fairfax Media (FXJ) beat market forecasts with its full-year results, reporting underlying net profits falling 3.9% to $143.4 million after tax and on a 5.3% dip in revenues to $1.88 billion.
Analysts’s consensus forecasts were for net profits of $141 million and revenues of $1.82 billion, according to Bloomberg data.
The final dividend was an unchanged 2 cents a share, 50%, taking the full year payout to an unchanged 4 cents a share.
Chief executive Greg Hywood said in yesterday’s statement that – excluding closed operations and disposals – Fairfax had “reported topline growth for continuing businesses for a full year for the first time in eight years” with underlying revenues up 0.3 per cent to $1.84 billion.
FXJ 1Y – Fairfax managing print decline
Key to that was a 45% jump in revenue at real estate portal Domain.
“Through organic growth initiatives and acquisitions we are moving to a position where the growth in our digital revenue offsets the decline in print,’ Mr Hywood said in the statement.
Group revenues for the first five weeks of the financial year were up between 2% and 3% compared with 2013-14. Domain.com.au revenues were up 53% helping that early improvement for 2015-16.
That’s better than for the past couple of years where the company has reported weakening revenues at the start of each new financial year.
Fairfax said that it expects Domain.com.au costs to increase at a similar rate to full-year 2015 (about 30%) as it continues investment in boosting Domain’s digital presence in the battle with News Corp subsidiary, REA Group.
"As we foreshadowed a year ago, we are investing in our growth businesses and ventures – which include Domain, Life Media & Events, as well as subscription video-on-demand service Stan," said Mr Hywood.
Reported net profits were down 63% to $83.2 million. The figure was impacted by $60.5 million of significant items after tax compared with a profit of $66.7 million in the 2013-14 year.
A feature of the latest report was the apparent improvement in the performance of the company’s metro media and metro publishing businesses, with Domain’s growth playing a big part.
Metropolitan media reported a 52% increase in earnings before interest, tax, depreciation and amortisation (EBITDA), while.Metro publishing costs fell 7% for the year and 28% over the last three years.
The CEO said the closure of the Tullamarine (Melbourne) and Chullora (Sydney) printing sites and the adoption of “new ways of delivering our journalism and content”. On a revenue basis, the division was up 3.3% to $829.9 million — from $803.2 million last year.
Print advertising revenues dipped $1 million (or 0.5%) – from $280.7 million to $279.4 million, while digital ad revenues soared 22.6%, to $219.9 million. But digital subscriptions, while growing strongly, are still well behind as revenue generators. The division grew digital subscriptions revenue by 36.2%, but it still brings in only $32.7 million of revenues a year. That’s with 159,000 paid digital subscribers across The Age and the SMH, as of last week. Print circulation, meanwhile, brought in 3.2% less money than it did a year ago – $197.5 million.
Overall, revenue from digital subscriptions and digital advertising grew $54.2 million over the year, while revenues from print advertising and print circulations fell only $4.8 million. The small slide $1 million) in print advertising revenues was due to the acquisition of Metro Media Publishing’s suburban newspapers by Domain. Without that buy, print ad revenues woulod have been down more than 10% in the year. Domain reported full-year growth of 45%, with total revenues of $223.3 million.
Fairfax shares jumped 4.9% to 85.5 cents yesterday.
