Online Ads make Up For Loss In Print

31 Aug 2006 -

Fairfax is reshaping its business to meet tough economic conditions in NSW and Victoria as well as a shift in advertising dollars to internet websites, chief executive David Kirk said.

Mr Kirk, who has been in the job for almost a year, said he was "comfortable" with the way the company was managing the online migration of advertising.

While classified ad revenue across its Australian newspapers dropped by $22.8 million over the year, that was offset by $26 million of new classified advertising for Fairfax Digital, Mr Kirk told analysts in a briefing in Sydney today.

"Net-net, we're ahead and we're comfortable with the way we are managing the migration," he said.

"We've had very satisfying progress in reshaping the business and its earnings profile in the context of what is a global change in the way media is consumed."

However, Mr Kirk said advertising markets were "tough" in Sydney, Melbourne and increasingly in New Zealand.

Shares in Fairfax rose two cents to $4.08 by noon.

Mr Kirk said the company would aim to keep cost growth below inflation. 

AAP reports: Fairfax's online arm Fairfax Digital today reported a revenue rise of 75.6 per cent to $96.4 million for 2005/06 as the media group reported an overall 7 per cent fall in net profit to $227.45 million.

The rapid growth of John Fairfax's internet businesses is changing the growth and earnings profile of the company, Mr Kirk says.

Total traffic across all the Fairfax sites increased to over 3.2 million unique browsers a month.

Fairfax said trading conditions remained constrained in its core publishing markets.

The group's underlying net profit before one-off items fell 4 per cent to $228.48 million.

"As expected, trading conditions remain constrained in our core publishing markets," Fairfax said.

"Fairfax Digital is performing strongly and Trade Me is meeting all expectations. It is too early to provide meaningful guidance."

Mr Kirk said the group was being successfully reshaped for stronger earnings growth in the medium term.

"Our aim is steady growth in publishing and rapid growth in our internet businesses," Mr Kirk said.

"Growth in publishing will be achieved by continued diversification into regional, business, and magazine publishing, further alignment of the cost base and strong circulation and readership that help drive advertising revenues."

 

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