Fairfax announces loss ahead of merger

Fairfax about to merge with Nine

Fairfax has announced an annual loss ahead of its merger with Nine, but insists the media business in ‘good shape’.

In an ASX announcement, Fairfax reported full-year revenue of $16.88 billion, down 3.1 per cent on the previous year, with a net loss of $63.8 million, compared with a net profit of $83.9 million the previous year. Underlying net profit was $124.9 million, again 12.4 per cent lower year-on-year.

The media group also reported a 1.2 per cent rise in underlying earnings to $274.2 million.

Chief executive and managing director, Greg Hywood, said Fairfax is in "good shape".

“We have long believed that media consolidation provided enormous potential to leverage increased scale of audiences and marketing inventory to grow our assets. Fairfax has consistently supported media deregulation because we saw the long-term benefits for shareholders,” he said.

“This is an exciting new phase of our development. It puts the important work we do through our journalism on an even stronger and more sustainable footing for the future.”

Hywood also reported Metro achieved its second consecutive year of EBITDA growth, while Stan broke through the 1.1 million active subscriber mark. Fairfax Group delivered an operating EBITDA of $274.2 million, a result driven by growth at Domain, Australian Metro Media, Macquarie media, as well as lower corporate costs. EBITDA for Metro is up eight per cent, the second consecutive year of growth.

Domain also delivered a 20 per cent digital revenue growth, with an EBITDA increase of 3.9 per cent to $117.6 million.

Hywood expected the recently announced print production agreement with News Corp and the changes to Fairfax’s printing network to result in an annualised full year benefit for the publishing group of about $15 million, with benefits expected towards the end of the 2019 financial year.

“Advertising revenue benefitted from improved H2 digital performance supported by the Google programmatic ad sales partnership, as well as moderating print declines,” Hywood said.

“Circulating revenue declines moderated in H2, benefitting from strong growth in digital subscriptions, with nine per cent growth in revenue for the year, and increases in cover prices. New paid digital subscriptions for The Sydney Morning Herald, The Age and the Australian Financial Review recording growth year-on-year across all three mastheads to 313,000.”

Nine Network and Fairfax sent shockwaves through the media industry in July after revealing the companies are joining forces to become Australia's biggest integrated media company.

The $4 billion merger represents one of the biggest moves in Australian media history. And while the merger needs approval by the Australian Competition and Consumer Commission (ACCC), industry experts say the changes to media ownership laws - introduced by the Turnbull government - will likely see it pass.  

Following completion of the proposed transaction, Nine shareholders will own 51.1 per cent of the combined entity with Fairfax shareholders owning the remaining 48.9 per cent.

The combined business will include Nine’s free-to-air television network, a portfolio of high growth digital businesses, including Domain, Stan and 9Now, as well as Fairfax’s mastheads and radio interests through Macquarie Media, according to the ASX statement.

As media commentators say the Fairfax/Nine merger will change the face of the media landscape in Australia, the MEAA is calling for the ACCC to block the merger.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu 

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

Launch marketing council Episode 5: Retailer and supplier

In our fifth and final episode, we delve into the relationship between retailer and supplier and how it drives and influences launch marketing strategies and success. To do that, we’re joined by Campbell Davies, group general manager of Associated Retailers Limited, and Kristin Viccars, marketing director A/NZ, Apex Tool Group. Also featured are Five by Five Global managing director, Matt Lawton, and CMO’s Nadia Cameron.

More Videos

Great read. I agree that it should be a perfect balance between interacting with your customers and knowing your brand. As a business, yo...

Caroline Scott

7 ways CMOs can improve their customer engagement game

Read more

Very true. Team development helps improve collaboration among the team members. I was able to improve my team's collaboration skills by t...

Quent Sinder

Why empowering others can help make you a great leader

Read more

CRM is a very good software that can help you succeed in your business. In my company, this system has allowed me to improve customer rel...

Anna Janicka

Sensis rebrands to Thryv and brings business software to Australian SMBs

Read more

AI Leasing Assistants have finally arrived for the multifamily industry. With so many to choose from it can be hard to figure out which i...

Alice Labs Pte. Ltd.

CMO's top 8 martech stories for the week - 6 May 2021

Read more

Nowadays, when everything is being done online, it is good to know that someone is trying to make an improvement. As a company, you are o...

Marcus

10 lessons Telstra has learnt through its T22 transformation

Read more

Blog Posts

Why if marketing is all you do, you’ll never be very good at it

OK, so you’re probably thinking: “Here comes another article to badger me about living in my bubble.” And also, “I bet this bubble-bashing piece will go on to explain how I can achieve better results through some heady dose of new life experiences, new routines and annoyingly different opinions on social media.”

Dane Smith

Behavioural science lead and regional consulting partner, Ogilvy

A leader’s role in rebuilding a culture of confidence

Every day, there are new predictions and studies on the future of work, the state of the economy and the unfolding global pandemic. All of which creates uncertainty and heightens the imperative of effective leadership.

Michelle Gibbings

Workplace expert, author

Confused About Your Customers?​

​I've worked in brand and marketing for more than 20 years. But there’s one area where I’ve found myself going around in circles and I must admit I'm becoming increasingly confused.

Rich Curtis

CEO, FutureBrand A/NZ

Sign in