Fairfax Media Group’s New Zealand mastheads have seen their value fall to $44m, half of the value the company attached to them a year ago.
Stuff, Fairfax’s New Zealand arm, saw its revenues fall 7.5 per cent to $301m in the year to June 25. A $35m decline in print advertising and newspaper sales hurt its bottom line, though it reported an $8m rise in its digital business.
Fairfax cut $66.3m from the value of Stuff’s licences, mastheads and trade names; these include the Sunday Star-Times, Dominion Post and Press newspapers, to $43.6m. In its annual report, the company said, “The New Zealand media business is facing similar structural print revenue declines as Australia. Digital revenue is expected to grow, albeit from a smaller base.”
Ebitda for Stuff fell 27 per cent to $40.5m and revenue dropped 7.5 per cent to $301.4m. Restructuring costs hit the company as it closed or sold a third of its regional publications. However, Stuff’s digital revenue climbed 21 per cent to $47.8m, driven largely by Stuff Fibre and Neighbourly. Fairfax attributed the growth to greater use of those services by its existing 2.1 million online audience.
Sydney-based Fairfax’s total revenues fell three per cent to just under A$1.7bn (NZ$1.85bn), with underlying net profit down 12 per cent. This may be its last result before Fairfax merges with Nine. That deal still needs approval from shareholders and from the ACCC, Australia’s competition regulator.
Greg Hywood, chief executive at Fairfax, said Stuff’s print operations were still profitable. He said, “The pain of restructuring efforts will prove to be worth it as the benefits start to flow in future years and bring forward the time when increases in digital revenue will outweigh declines in print.
While Fairfax still hopes the Court of Appeal will overturn the Commerce Commission decision stopping a merger with NZME, Hywood pointed out that its strong digital component gives it a good hand in playing for other media consolidation. Pundits have mooted a possibe connection with MediaWorks. Fairfax and Australian television company Nine Entertainment last month announced their intention to merge, which could open speculative Stuff – MediaWorks merger.
Hywood saw no point in commenting on that speculation at this stage, saying instead, “It is business as usual and we are open to anything that would improve the New Zealand business. We consider all the best options for New Zealand, whatever they may be.”
Stuff mastheads lose value
