Fairfax profits have fallen 86% due to a restructuring plan aimed at turning the media group around.
Fairfax made a net profit of $26.3m for the six months to 31 December, down from $194m a year ago, due chiefly to one-off impairment charges and redundancy costs. Excluding significant items, which included the merger with Macquarie Radio, the media group’s profit fell to $82.9m from $93.1m.
However, chief executive Greg Hywood says the group’s strategy is on course despite the huge hit to the bottom line.
“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 pinning its hopes on growing 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 5% 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 4%, 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%, while Domain recorded a 38% rise in digital revenue.
Print advertising slumped 10% during the half, which is less than the 24% decline recorded last financial year, though 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 Domain’s momentum, delivering growth options across the business, both organic and acquired, while delivering further sustained cost reduction,” he said.