Updated December 2012
Fairfax Media Limited
Fairfax Media Limited [ASX:FXJ] is a leading multi-platform media company in Australasia. The group comprises metropolitan, rural, regional and community mastheads and serves its audiences through high-quality, independent journalism and offers dynamic venues for commerce and information.
Fairfax Media has a portfolio of leading websites, tablet and smartphone apps, including the online news sites smh.com.au and theage.com.au in Australia and stuff.co.nz in New Zealand. The group also has leading classified and transaction websites in Australia.
Fairfax Media publishes metropolitan, agricultural, regional and community newspapers, financial and consumer magazines. The company utilises a network of printing presses at state-of-the-art facilities throughout Australia and New Zealand.
In Australia, mastheads include The Sydney Morning Herald, The Age, The Australian Financial Review, The Canberra Times, The Sun-Herald, and The Land. In New Zealand mastheads include The Dominion Post, The Press, The Sunday Star-Times, TV Guide, NZ House and Garden, New Zealand Fishing News and Cuisine, as well as agricultural publications.
The group also holds radio licenses in several metropolitan locations in Australia, including 2UE in Sydney, 3AW and Magic 1278 Melbourne, 4BC and 4BH Brisbane, and 6PR and 96fm in Perth.
For the financial year ended 24 June 2012, Fairfax Media reported underlying revenues and profit after tax of $2.33 billion and $205.4 million respectively. Underlying earnings per share were 8.7 cents.
Including significant items of $2.9 billion, a net loss after tax of $2.73 billion was reported. Significant items for the year included a non cash impairment charge of $2.8 billion and restructure/redundancy charges of $140 million. The asset impairment outcome was the result of a further writedown of the carrying values of mastheads, goodwill and other intangible assets to reflect current trading levels and future expectations. The charge does not impact the underlying earnings position of the Company or borrowing arrangements.
In February 2012, the Company announced a three-year Fairfax of the Future program to fundamentally restructure the business through a series of strategic operational changes that will reshape the Company and reset its cost base. A $21 million EBITDA benefit was realised during the year as a result of this program's 2012 initiatives and will provide a full year benefit of $56 million in 2013.
The Fairfax of the Future program has three key objectives:
- Positioning the Metro Media business to address further structural decline in print advertising and accelerate its readiness to move a digital-only model if it makes commercial sense to do so in the future;
- Reducing group-wide costs and corporate overhead in line with the revised business structure; and
- Strengthening the Fairfax Media balance sheet during a period when restructuring costs will be incurred.
Total savings from the Fairfax of the Future program are expected to be $235 million on an annualised basis by June 2015.
Fairfax Media continues to generate strong free cash flows with net cash inflow from trading activities of $496 million. The Company reduced its net debt by $574 million after $57 million of capital expenditure on software, plant and equipment and acquisition expenditure; $83 million in dividend payments; $228 million income tax and net interest obligations; and surplus cash flow plus proceeds from the Trade Me divestment. Net debt stands at $914.1 million at 24 June 2012 and includes $99 million of net debt within Trade Me.Last updated: Sun., January 6, 7:18 AM