Revenue and earnings at Fairfax Media remain under pressure, despite a small rise in activity in recent months.
Shareholders at yesterday’s noisy AGM in Sydney were told (before all the action started) that while there had been a small improvement noted the first four months of the current financial year had been tough.
CEO, Brian McCarthy said :
"For the first four months of this half, underlying EBITDA from continuing businesses has been below the same period last year by approximately 15%.
"By way of comparison, EBITDA for the last four months of the 2009 year was below the same period last year by approximately 40%…. and I have already outlined the exceptional economic conditions we encountered at that time.
"In the second half of 2010, we anticipate improved business conditions to deliver modest earnings growth compared with the same period last year," he said.
"We have generally maintained our newspaper circulations and these are a positive when compared to the experience of newspaper publishers in the United States and the United Kingdom.
"Circulation isn’t the only positive audience measure for us. Over the past year we have increased the audience reach in our digital assets by 46% to 21 million unique browsers a month.
"Our radio ratings have also shown improvement."
Fairfax shares fell 1.5 cents yesterday to $1.635 in afternoon trading after analysts said the comments on current trading were not as strong as forecast.
In his speech to the AGM yesterday Mr McCarthy made it clear he wasn’t a fan of paid content on news websites and you’d have to take it as a given that the board doesn’t share the Rupert Murdoch’s enthusiasm for the idea.
To make his grandiose plans work, Mr Murdoch and News Corp need the likes of Fairfax and the ABC in Australia and the BBC in the UK to fall into line and charge for content on their general news websites, or he has to find political ways to neuter the public broadcasters.
He has started low key talks with the Telegraph group in London to try and get them to join him in charging for content.
In the September quarter, the Wall Street Journal barely broke even, even with charging for content on its website, although there are easy ways around the firewall.
But for News in Australia, Fairfax is the great obstacle with its more visited fleet of sites.
In fact Mr McCarthy seems to have ruled it out for the company’s "general news websites" (Like SMH.com.au).
"In relation to charging for online content, a great deal has been said and written on this subject over the past six months or so.
"We are looking closely at this issue and at this stage we have not made a final decision as to what course of action we may take.
"Fairfax reaches more consumers than it ever has, and produces content that is highly valuable to these consumers.
"Fairfax already charges for content online in a number of areas and is constantly reviewing further opportunities to charge for content in the digital space where it makes economic and strategic sense to do so.
"It is, however, important that we maintain a high level of audience reach via our news sites such as smh.com.au and theage.com.au, plus many other sites.
"Charging users of these general news sites for access may not be profitable for us in the long term," Mr McCarthy said.
