Fairfax chief executive Greg Hywood says the media group’s transition strategy is progressing as planned, despite an 86 per cent slide in its first half profit.
Fairfax made a net profit of $26.3 million for the six months to December 31, down from $194 million a year ago, due chiefly to one-off impairment charges and redundancy costs.
Excluding significant items, the media group’s profit fell to $82.9 million from $93.1 million.
But Hywood said the result was in line with expectations.
“This result is a solid outcome. It is the result that we had planned for. There are no surprises,” he said.
The media group, which owns The Sydney Morning Herald and The Age, has shifted focus away from its traditional print assets and is looking to grow its digital operations, especially its real estate advertising business Domain.
Fairfax also announced it would buy-back up to 121 million of its shares over the next 12 months, or around five per cent of its issued capital, and said it would pay shareholders an interim dividend of two cents per share.
Earnings from the company’s metropolitan media division rose four per cent, as an increase in digital subscriptions and the growth of Domain offset a further decline in print advertising.
Digital subscription revenue from the division was up 61 per cent while Domain recorded a 38 per cent rise in digital revenue.
Print advertising slumped 10 per cent during the half, which is less than the 24 per cent decline recorded last financial year, though Mr Hywood said the market had also been slow in January.
He said Fairfax would continue to focus on improving the performance of Domain during the remainder of the financial year.
“Our focus in the second half is on continuing Domains momentum, delivering growth options across the business, both organic and acquired, while delivering further sustained cost reduction,” he said.
FAIRFAX REVENUE, PROFIT SLIDES
* Net profit down 86pct to $26.3m
* Revenue down 13pct to $943m
* Interim dividend unchanged at two cents per share
– AAP
