Fairfax waters down speculation

  • 09/05/2016

Fairfax Media has watered down speculation that it will spin off its New Zealand business.

APN News and Media is halting trading ahead of an announcement on its New Zealand business. APN owns The New Zealand Herald, NZME and Grab-One.

The trading halt was requested by the company in relation to a potential material transaction of NZME.

The media group is expected to remain in a halt until Wednesday, May 11 when the company will hold its annual general conference.

"Fairfax continues to explore options for all its businesses including Fairfax New Zealand, but at this time there is nothing to disclose," a Fairfax statement to the ASX said today.

The media group, whose stable of newspapers include The Sydney Morning Herald, The Australian Financial Review and The Age, said it issued the statement in response to media reports speculating about the future of its New Zealand business.

In February, the Australian media group reported a 4.2 percent increase in first-half profit to A$26.3 million (NZ$28.36m) as revenue edged up 1.6 percent to A$958m (NZ$1.03 billion).

The New Zealand division posted a 12 percent decline in first-half earnings, which the publisher of the Stuff website and a suite of regional titles including the Dominion Post, Press and Sunday-Star Times newspapers said reflected gains in its online revenue.

However, those gains didn't offset the ongoing advertising decline in its traditional print publications. Advertising revenue fell 9.2 percent to $119.8m.

The New Zealand division increased digital revenue 43 percent without disclosing any detail. It also said its flagship Stuff website retained its top spot among domestic websites.

The Australian group is placing an increased focus on digital business as a whole, with online revenue accounting for about 20 per cent in the first half, twice as much as it did five years ago.

A demerged Fairfax New Zealand could end up footing it with APN News & Media on the NZX, with APN also contemplating a demerger of its New Zealand assets, most likely through a distribution of shares to existing investors.

The Australian newspaper said Fairfax and APN had held talks about a possible merger of their New Zealand operations.

APN shares last traded at 63 Australian cents on the ASX and have declined 30 percent in the past 12 months. They are also rated a 'buy'.