If you had to focus on just one factor that helps explain the current industrial action by Fairfax Media journalists over the company’s cutting of 125 jobs and $30 million in costs, it is the finances of the businesses — especially an accelerating slide in revenue so far in 2017 as compared to the same time a year ago. While CEO Greg Hywood went on at length about what a bright shining jewel Fairfax’s Domain property website business was and would be once floated off later this year, the less shiny reality was in the now usual trading update given in his presentation to a Sydney finance conference on Thursday morning.
In short, outside of Domain it is not good, and from what Hywood said this morning in his presentation, Fairfax’s group revenue position has worsened appreciably compared to this time last year.
“Overall Group revenues are 6% below last year for the first 17 weeks of FY17 H2 (26 December 2016 to 23 April 2017). Revenue across our current reporting segments:
• Domain overall revenue is up 10% with its total digital business up 18%;
• Metro Media is down around 11%;
• Australian Community Media is down around 11%;
• New Zealand Media is down around 3% including currency impact;
• Macquarie Media is down around 7%.”
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While that is about what the company said was the position in the first six weeks of the year back in its interim profit statement in February, it is much worse than for the start of the 2016 calendar year when Hywood told the same conference:
“Overall group revenues for continuing businesses are up just under 1% for the 1 January 2015 to 26 April 2015 period compared to the prior corresponding period.
“Revenues across our current reporting segments:Metro Media, which includes Domain, is up around 7%. Publishing revenues are down 7%.
“Domain’s overall revenue is up 54% including the benefit of acquisitions (MMP from February 2015 and Allhomes from October 2014), with its total digital business up around 32% and domain.com.au up around 27%.”
As you can see growth has slowed sharply in Domain because of the change in the comparative base, but the situation in Metro Media is worsening — an 11% fall in revenue against 7%. That is why the cost cutting has happened, the jobs lost and now the one-week strike.