Growth in NZ delights Fairfax

SYDNEY - "Continued exceptional growth in New Zealand" has helped boost profits for transtasman media company John Fairfax by nearly 24 per cent, the company says.

The New Zealand division had a strong performance, with earnings before interest and taxes increasing 19 per cent to $180.1 million as advertising revenue rose 9.4 per cent to $419.4 million, Fairfax chief executive Fred Hilmer said.


Fairfax - the Sydney-based company which owns several New Zealand metropolitan and provincial newspapers - posted a net profit of 5.9 per cent in 2004-2005, down to $285.18 million from the $303.1 million reported in the previous year.

But the company said that the 2003-2004 result had been boosted by a $68.4 million in unusual items, including a tax gain, and that "underlying net profit" for 2004-2005 after its preferred reset securities exchangeable for shares dividends, was A$234.1 million, up 23.7 per cent.

The net result for 2004-2005 also included non-recurring items, including a A$4 million gain on its sale of Gordon & Gotch and related assets in New Zealand and a A$3 million tax gain.

"The exceptional performance of Fairfax NZ continues to reflect successful ongoing implementation of our strategies, assisted by a positive economic environment," Hilmer said.

Fairfax - which publishes The Sydney Morning Herald, Age, the Australian Financial Review , the Dominion-Post, the Press and the Waikato Times - also declared a special dividend of 5Ac to go with a final dividend of 11Ac.

The company, Australasia's second-biggest newspaper group behind Rupert Murdoch's News, said in June it expected earnings before interest and tax would be between A$414 million and A$429 million.

"Record cash flows have enabled payment of a special dividend of 5Ac a share," Hilmer said.

That compared with a total dividend in 2003-2004 of 16.5Ac.

"Challenges to our revenue base over the past year from a weak NSW economy and declining real estate markets in Sydney and Melbourne have been more than offset by strong results in display, employment, magazines, regional and community publishing and Fairfax Digital in Australia, and continued exceptional growth in New Zealand."

Hilmer said the company had a number of growth initiatives underway, including the launch of a travel and leisure magazine, new revenues from recently acquired online dating service RSVP and the introduction of a new Australian Financial Review digital product.

Fairfax Digital revenue climbed 38 per cent to $54.9 million and recorded an operating profit for the first time, posting a $4.6 million gain.

Trading revenue rose 5.8 per cent to $1.87 billion.

Fairfax said it had determined a retirement allowance of A$4.5 million for Hilmer, who is being replaced by former All Black David Kirk in November.

- AAP, REUTERS