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RESULTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 1999 HIGHLIGHTS Financial Performance
Products
Capital Management
STATEMENT BY THE CHIEF EXECUTIVE OFFICER Mr Fred Hilmer, Chief Executive Officer of Fairfax, said: "This is an excellent result for the Company, reflecting the benefit of both disciplined cost control and strong revenue growth. The overall results show significant improvement over last year, and reflect our initial efforts to reshape the Company. I want to extend special thanks to our employees and management. Transitions are difficult, and our staff has demonstrated tremendous dedication and effort over the past year. Revenues increased 3.2% over the year to $1.145 billion. However, on a like-for-like basis, they were up 8.0% over last year to $1.12 billion. Both circulation and advertising revenues for newspapers showed solid gains (of 9.0% and 6.3%, respectively) due largely to our focus on yield management. Classifieds were strong, with increases in both volumes and yields. Magazines also performed well, with revenues up 17%. Costs increased marginally to $822.8 million, and on a like-for-like basis rose by 2.2% to $795.4 million. This is due principally to increases in newsprint and paper costs, which rose by 12.5% to $193.3 million largely as a result of increased newsprint prices. Staff costs, which account for over 40% of total operating expenses fell by 1.1% to $341.4 million. Fairfax has met its commitment on costs. Going forward, we intend to maintain a stringent balance between revenues and costs. Our results on revenues and costs reflect, for the first time in years, an operating leverage that is a key to our future growth. Fairfax is moving forward on two fronts, strengthening and growing our core businesses and building new platforms for growth. Strengthening and Growing Core Businesses Both revenue generation and cost management are important. Top level management structure has been streamlined, with a greater emphasis on accountability for results. In this regard, our team has been strengthened with the appointment of Mark Bayliss as Chief Financial Officer and Peter Graham as Director, Group Operations. We are continuing to improve and re-engineer the Group’s infrastructure – its basic systems, operating methods and processes. In the coming years, we will be giving continuing emphasis to product excellence and meeting readers’ needs. There will also be much greater attention to revitalising the marketing of our products. At the same time, the quality of our journalism is a core corporate and business goal. This is Fairfax’s distinguishing strength – for our readers and the advertisers our readership attracts – and it ensures Fairfax’s leadership in journalism in Australia. Fairfax publications won over 50 awards for excellence, including 12 prestigious Walkley awards, in the past year. We re-affirm that this core corporate goal will be pursued on a sustained basis, within a cost structure that is appropriate to our revenue base. The Company’s print businesses are trading well in what has largely been a strong, but at times uneven, market. All of our four major mastheads, The Age, The Sydney Morning Herald, The Australian Financial Review and The Sun-Herald are performing well. During the financial year, circulation was down slightly at The Sydney Morning Herald and The Sun-Herald. There have been solid circulation gains at The Australian Financial Review and especially its new Weekend Edition. The Age enjoyed significant performance improvements in advertising and circulation revenues. Fairfax recently announced its investment in a new $220 million printing facility in Melbourne for The Age and other publications, reflecting our commitment to expansion in print for the decades ahead. Fairfax Community Newspapers (FCN), and our regionals, had a good year. The Newcastle Herald, with its new format, and supported by new colour printing capacity, enjoyed a sharp circulation rise. Building a Platform for Future Growth We are continuing to build a platform for future growth, with a more offensive posture in our interactive businesses. We are advocating an open policy and regulatory environment that will foster new technology and services, such as datacasting, to benefit our readers and consumers everywhere. Fairfax continues to build critical mass in its online businesses in the scope of products and services, viewership, traffic, online transactions, and the leveraging of our unparalleled content with the online sites. We will continue to develop these new businesses. As stated previously, we have three goals in this area: to enhance our mastheads; to add new revenue streams; and to build an online franchise in new areas where we have competitive advantage. Fairfax is continuing its planning with regard to digital television and datacasting, and will pursue activities in this area in the coming months. The Board and management are continuing to review a possible float of the online and interactive businesses, and we are assessing the best way forward. No decision on these issues has yet been made. * * * With regard to current trading conditions, while it is still early in the financial year, our businesses are trading well, and the outlook is encouraging under current forecasts for the future of the economy. The Board is pleased to announce a final dividend of 6.5 cents per share, bringing the total dividend for the year to 10.5 cents, up 10.5% on last year’s 9.5 cents. This is the first year for which the dividend is fully franked." 8 September, 1999 See also: Appendix
4B (equity accounted) Preliminary final report Fairfax
Financial Results Briefing
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For further information, please contact: Mark Bayliss, Chief Financial Officer (02) 9282 3555 Bruce Wolpe, Manager, Corporate Affairs (02) 9282 3640
John Fairfax Holdings [ASX:FXJ] is Australia’s leading publishing group. Its mastheads include The Sydney Morning Herald, The Australian Financial Review, The Age, The Sun-Herald, and BRW. In addition, the Company publishes financial and consumer magazines, and provides online and interactive services. Fairfax is Australia’s leading content provider on the Internet, with about 1 million page views, and over 150,000 site visits, per day.
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Fairfax > Corporate Affairs & Media Releases > Announcements > ANNUAL RESULTS
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