Fairfax Media Limited (ASX: FXJ) held its annual general meeting (AGM) yesterday and the shares promptly dropped 4.4% to 88 cents. The stock has now lost almost 17% in the past six months against the backdrop of an 11% fall in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
The impetus for the sell down in the media company's share price was a trading update which was provided during the AGM by CEO Mr Greg Hywood
Here are the details you need to know:
- Metro print advertising conditions remain difficult, reflecting the ongoing structural challenges and weak consumer confidence
- Regional and rural advertising markets are challenged with New Zealand also struggling
- For the financial year to date (YTD), overall group revenues from continuing businesses are up between 2% and 3%
- Domain remains the standout performer with revenue up 68% YTD
- Revenue YTD within the radio division is higher thanks to the inclusion of the Macquarie Radio Network
- Revenue across the Publishing, Australian Community Media and New Zealand divisions are all down around 10% YTD
Key Takeaways
Investors familiar with Domain's peer REA Group Limited (ASX: REA) will be aware of just how profitable the online real estate classifieds market can be. Domain is certainly the jewel in the crown for Fairfax Media but the question remains whether the company can re-monetise the remaining structurally challenged business units.
Judging by the share price performance of Fairfax Media and its peer APN News and Media Limited (ASX: APN) the market isn't holding out much hope for their 'old world' media assets, however with analyst consensus estimates forecasting a rise in earnings per share in 2017, it's possible that risks to the downside are now limited.
