sign in sign up
<<
Home , Fox Sports, Storyful, The Australian

sees ad ‘green shoots’

 AUGUST 09, 2014 12:00AM

Darren Davidson

Business Media Writer

Revenue breakdown. Source: TheAustralian

NEWS Corporation has sighted the “green shoots” of recovery in the advertising market for its Australian , as the global media company posted a near-12 per cent rise in reported earnings after completing its first fiscal year. “There are indications that the rate of decline has declined in ,” News Corp chief executive Robert Thomson told investors. “There are green shoots on the Nullarbor Plain.” A year after the historic split of ’s media empire, News reported total segment earnings before interest, tax, depreciation and amortisation (EBITDA) of $US770 million ($832m), compared with $US688m in the previous year, a rise of 11.9 per cent. Revenues amounted to $US8.57 billion in the 12 months to June 30, compared to $US8.89bn in the prior year. Adjusted earnings per share were US46c, down from US62c. EBITDA was ahead of market expectations, boosted by lower corporate costs, while revenues were in line with forecasts. The earnings performance was driven by the company’s book publishing segment, which includes HarperCollins, and Australian online real estate group REA, with revenues surging 33 per cent. The majority of the revenue decline reflected lower advertising revenues at the newspapers, foreign currency fluctuations and the sale of the Dow Jones Local Media Group. The cable networks division, which houses Australia, saw revenues fall by 2 per cent. News Corp’s Australian-listed shares fell 2.6 per cent to $17.90 in a broadly weaker market. “Real estate and books divisions were the top performers as expected, but revenue momentum remained tough in the division albeit with a modest improvement in revenue run-rate,” Citi analyst Justin Diddams said. Total advertising revenues declined 7.5 per cent to $US4.02bn, but there was improvement in the last fiscal quarter, with advertising revenue down a more moderate 6.1 per cent to $US1.03bn. Australian newspaper revenues declined 18 per cent for the full year, of which 10 per cent was related to the weak . But there are indicators that market conditions are picking up as advertisers and media agencies re-evaluate newspapers having shifted budgets to cheaper alternatives such as the internet in recent years. “Part of that is the great work by our team in Australia,” Mr Thomson said. “We’ve focused on local advertising and the local advertising revenue trajectory has changed in Australia.” Four months ago, embarked on a concerted sales pitch to advertisers spearheaded by the company’s first-ever “upfronts” — presentations to business leaders, clients and advertising agencies. “The national market is different … that’s a great tribute to (CEO) Julian Clarke, (COO) Peter Tonagh and our advertising team,” Mr Thomson said. He singled out The Australian’s improved performance after the paper’s share of media agency bookings surged 35 per cent in the month of May. Nicholas Gray, CEO of The Australian, attributed stronger advertiser demand to investments in new products including AccessOne, which automatically extends print advertising campaigns to the masthead’s newly launched tablet app at no extra cost. “The Australian has experienced three consecutive months of year-on-year growth in print advertising,” Mr Gray said. “I am pleased to see the market response to our range of recent initiatives including the iPad launch, AccessOne, and the 50th birthday.” The publishing company was formed from the split of the original News Corp. The entertainment assets of the old News Corp formed a new company, , while the new News Corp holds the global newspaper assets and is an equal partner in pay-TV operator . Mr Murdoch is chairman and chief executive of Fox and executive chairman of News. News has been very active since the demerger in the mergers and acquisitions space, acquiring agency and Canadian romance publisher Harlequin for $450m in cash. Mr Thomson said the new News Corp in its first full year had “made significant progress in achieving the mission we articulated at the outset — to be more global and more digital through organic growth, product launches and strategic acquisitions.”