Fairfax sees light despite recording loss

FAIRFAX Media chief Brian McCarthy says the publisher is positioned “wonderfully well” to benefit from a recovery in the advertising market, after announcing a net loss of A$380 million for the year to June 30.

The negative result occured due to one-off impairments of A$664.3 million. Those costs aside, net profit after tax was A$226.7 million – down 40 percent from the previous year.

Revenue was down 10.6 percent to A$2.6 billion, partly because of a significant drop in advertising earnings, particularly in metropolitan mastheads. EBITDA was A$605 million, down 27.2 percent.

Click here for Fairfax Media’s 2008/09 Financial Year statement

Trading in the first seven weeks of the new financial year indicate that the worst is over in terms of plunging ad revenue, although the upturn has not yet started, the company said.

Mr McCarthy said the operating conditions in fiscal 08/09 were the worst he had experienced in his 33-year history in the industry.

“When you take [the financial conditions] into account, our performance in relation to other media suggests we’re up there with the rest,” he said.

Mr McCarthy said Fairfax had reduced its staff force by about 1,000 people, or around 9 percent, in the last year – a ratio he said was equivalent to other media companies in recent times.

The redundancies – which came from a spread of different departments in the business – contributed to the one-off items that caused the company to post a loss.

Mr McCarthy predicted that a vast majority, but not all, ad revenue would return as conditions improved. Employment advertising would be the first to return as the financial climate improved, he said.

The former Rural Press boss, who has been in charge of Fairfax since December last year, said there was no “bag of tricks” for boosting revenue, outside of the cyclical upswing.

The company would continue to invest in its digital properties, including the new NationalTimes – set to launch in September.

Mr McCarthy and over 50 senior managers will meet for a two-day, 3-5 year strategic planning session next month. Submissions were welcome from Fairfax staff for consideration at the summit, he said.


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One Response to “Fairfax sees light despite recording loss”

  1. Consumer watchdog barks paywall warning « PANPA News Says:

    […] arose on Monday when Fairfax CEO Brian McCarthy was quizzed on the topic while announcing his company’s financial results. Mr McCarthy did not mention any desire to work with News, but he refused to rule out any […]

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