Stuff earnings plummet, mastheads axed

Stuff chief executive Sinead Boucher says the print rationalisation would involve 28 publications and affect about 60 staff.

ASX-listed publisher Fairfax’s New Zealand arm, now known as Stuff, has reported a 27% drop in earnings and the sale or closure of 35% of its print publications.

Fairfax group chief executive Greg Hywood said the rationalisation of the titles would “deliver additional ebitda contribution” over the full year.

“We have enormous confidence Stuff is heading toward sustained growth as its digital business continues on its strong momentum. We are acting decisively to bring this forward,” he said.

Slated for closure or sale are a string of regional giveaway newspapers and agricultural publications. Its major metropolitan and regional city newspapers are not in the extensive list of small-scale publications that Fairfax wishes to quit.

Revenue for Stuff fell 8% to $A146.6 million for the six months to December compared to the previous corresponding period.

Earnings before interest, tax, depreciation and amortisation dropped 27% to $A18.9 million.

In New Zealand dollar terms revenue fell 4.6% to $158.3 million while ebitda dropped 24% to $20.7 million.

Fairfax said Stuff’s digital revenue of $24.2 million rose 32.8%, driven by its internet service Stuff Fibre and growth at its Neighbourly website.

Print advertising revenue fell 15% to $77.2 million while print circulation and subscription revenue fell 4% to $48.8 million.

The group reported restructuring and redundancy costs for Stuff of $A3.7 million for the period.

Stuff chief executive Sinead Boucher told stuff.co.nz the print rationalisation would involve 28 publications and affect about 60 staff.

“We appreciate that this process creates a level of uncertainty for some people – and we will move as quickly as possible to provide them with clarity,” she said.

There were tough decisions involved, but Stuff’s future lay in digital, she said.

The changes are due to take place over the next six months.

Stuff has reported that the titles affected are:

Avenues
Waikato Farmer
Admire Marlborough
NZ Dairy Farmer
Discover Magazine
Selwyn and Ashburton Outlook
Admire Nelson
Hastings Mail
Christchurch Mail
Napier Mail
The Tribune
Kaikoura Star
Invercargill Eye
Auto Xtra
South Canterbury Herald
Clutha Leader
Waiheke Marketplace
NewsLink
Wairarapa News
Queenstown Mirror
NZ Farmer
Waitaki Herald
Canterbury Farmer
North Waikato News
Central District Farmer
Rotorua Review
Otago Southland Farmer
Ruapehu Press

Fairfax had planned to merge its New Zealand business with NZME, but was blocked by the Commerce Commission over fears the resulting public interest loss of media diversity outweighed the economic benefits of that deal. That decision was upheld by the High Court, although the media companies have since sought leave to contest that decision in the Court of Appeal.

(Additional reporting BusinessDesk)


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15 Comments & Questions

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That's a little bit less crap in the letterbox. Less shop rubbish would be nice too.

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Just as well I don't own a letterbox,my god thats a lot of toilet paper to read,its just as well your retired.

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Perhaps the poorly researched and mildly left wing news reports published by NZME and Fairfax are being punished by unhappy subscribers and advertisers? The NZ Herald wants me to increase my 2 day subscription to one week - but why? I have insufficient confidence in the impartiality of their reporting.

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I used to subscribe to the Herald but got too fed up with the constant left-wing bent of all their reporting and 90% of their opinion pieces so halted my subscription.

I used to regularly get emails and calls asking me to resubscribe but, after I told them to only ask me again when they became politically neutral, they stopped calling!

As it is the money spent on an NBR subscription is far more worthwhile!

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Left wing? The centre moved sharply to the right a long time ago. It is a corporate owned government propaganda mouthpiece and all governments since 1984 have been neo-lib. JK even showed his appreciation for all their spin when he attended an NZHerald party some time ago.

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The centre has moved to the left; the problem is that the left have moved even further as they have forgotten (or weren't around for) the horrors of socialism in the 20th century.

To the writers of the Herald there is pretty much no problem that can't be solved by more government intervention - even when it is government action that caused it in the first place (e.g. Pike River).

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It could be that farmers are too busy to read their publications.

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Daisy the cow will be most disappointed her life's story will no longer reach a wide readership .

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Fairfax. Yes, we live in a digital age, and things change. Is there any possibility of taking those same publications, and turning them into their digital equivalent? U could retrain and retain those staff. People still have to source the material and information, they still have to write and upload those articles. Why can't you at least consider that as an option

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Preferably on a non-profit basis and purely as a public service of course.

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No mention of ...... Google and Facebook and Taxation

Taxation of multi-nationals. The argument in Australia is that Google and Facebook are aggregators of news and do not pay GST on their advertising charges and avoid income tax via BEPS profit shifting through Finance Hubs in Singapore.

Thus the question that should be canvassed is - what would play out (competitive advantage wise) if NZME didn't have to pay GST and Income Tax while Stuff was required to? One could easily assume that Google and Facebook advertising rates in NZ would be significantly higher if they were required to pay full freight taxes on their revenues.

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Most of your advertising revenue is commercial so from a GST perspective is a nil effect (if business is charged it they claim it back, if not they can't so are not getting their advertising any cheaper). For income tax, you are only paying on profit so if you make a 10% margin (probably being generous on that) you will be paying 3% of your turnover in tax. If that is enough to kill your business you aren't doing it right in the first place.

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i wonder if publishers eventually wake up to the fact that maybe they are failing because they've already alienated at least half of all readers by acting as a ventriloquist's dummy for the left and some opinion pieces are borderline offensive, last Saturday i canceled the NZ Herald when the lead story was on a surrogacy arrangement by one of their radio staff, its just not a newspaper anymore.

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Hyper local independent newspapers are doing very well, our local Chatter (Te Kauwhata) is run by a husband and wife team and keeps growing, maybe selling these mastheads to staff may be the way to go as the corporate model is broken.

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Maybe it's time for the news on the main channels to go as well. First story up a sports story, all about the kiwis winning a medal at the winter Olympics. I mean really, a sports story. I wouldn't mind so much, but they're only going to go over it all again when the sports section of the news is on. Surely the start of the news should be about more important world events, and sports stories on at the appropriate time, and only once talked about, not twice.

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