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Fairfax rebounds into $84m profit 

Thursday, 17 August 2017
By Print 21 Online Article

‘Fairfax is in great shape’ says CEO Greg Hywood.

Fairfax Media has recorded a full-year net profit of $83.9 million after a loss of $772.6 million in the previous year –when it wrote down the value of its newspaper mastheads by almost $1 billion.

The rebound comes despite a 4.8 percent drop in revenue to $1.74 billion, with metro publishing advertising revenue slumping by a further 17 percent. 

Chief executive Greg Hywood says the result showed that “Fairfax is in great shape,” as he released more details of plans to separate the thriving real estate arm Domain from the main publishing business. 

“The strategy we commenced five years ago has successfully maximised cash flows of our publishing assets and, with that, built growth businesses in Domain and Stan.” 

Hywood says he expects Domain to be trading as a separate company by late November. The company plans to retain 60 percent of Domain, with 40 per cent distributed to Fairfax shareholders. 

The metro publishing business, which includes mastheads The Age, The Sydney Morning Herald, and The Australian Financial Review, experienced a 21 percent increase in digital subscriptions to 236,000 but advertising revenue was down 17 percent.

Declines in print circulation were partially offset by cover price increases. Publishing costs for the metro business were reduced by 12 percent, with second half reductions reaching 14 percent because of the May restructure. 

“Along with a flatter, more efficient operating structure, the centrepiece of Metro’s next-generation publishing model is cutting-edge product and technology development,” says Hywood. “We will have in market this calendar year a suite of new digital products which will deliver deeper and more engaging experiences, while sustaining a successful print proposition.”

Total revenue for Australian Community Media declined 11 percent in fiscal 2017.

In New Zealand, total revenue was down 7 percent. Fairfax NZ’s digital revenue grew by 29 percent while print circulation fell by 5 percent.

Hywood also updated shareholders on the Fairfax/NZME merger, which will go before the NZ High Court in October, following its rejection by New Zealand Commerce Commission in May. 

 

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