Ahead of its 2016 full-year results announcement, Fairfax Media has revealed it expects to log a $989m impairment relating to its publishing segment, fast-tracking plans to ditch print editions of its newspaper titles.
Fairfax has warned investors that impairments of $484.9m for Australian Metro Media, $408.8m for Australian Community Media and $95.3m for New Zealand will be recorded in its full-year results statement which will be made on August 10.
CEO Greg Hywood says the poor performance has prompted Fairfax to pursue its new publishing model revealed in May which may see the media mogul ditch weekday print editions of its metro print staples, the Sydney Morning Herald and The Age.
“The Australian Metro Media adjustments reflect the market realities that the Metro business is facing and the change to segment reporting,” Hywood says.
“The considerable work done to transform the publishing business has created flexibility and optionality around the future, and we are confident in our plan to transition to our new sustainable publishing model.
“With regard to Australian Community Media, we have successfully delivered on our transformation program through FY16. The adjustments we are announcing today are appropriate as we recognise the challenges this business continues to face in rural and regional markets.”
In a speech at the Macquarie Australia Conference in May, Hywood said ‘it should surprise no one’ that as he predicts, eventually all publishers will move away from a seven-day-a-week model and embrace weekend-only or targeted printing.
“Quite simply it is likely that one day, the viability for newspapers on current trends will run out. It isn’t going to happen overnight – but eventually it will,” he told the audience.
Despite its publishing segment woes, Fairfax’s digital real-estate business Domain Group has exceeded expectations, logging a 45 per cent revenue spike for full-year 2015 and prompting Fairfax to create a new Domain Group segment.
Hywood says, “Domain has established itself as a genuine force and aggressive competitor in real estate media and services.
“We continue to invest in Domain to make it stronger and extend its business model beyond listing to capture the immense opportunity in the broader real estate ecosystem.”
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