Stuff earnings plummet, mastheads axed

Publisher reports digital growth driven by internet arm.

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 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:

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
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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