Fairfax Media Limited (ASX: FXJ) has reported an underlying set of results which suggest the company is on the mend but still facing headwinds.
For the 2015 financial year the media company reported underlying results from continuing businesses excluding significant items which showed revenues were flat at $1.84 billion and net profit after tax slipped 3.9% to $143.4 million.
On a per share basis, adjusted earnings per share declined 4.6% to 6 cents per share (cps). Meanwhile the board has declared a final dividend of 2 cps, with an ex-dividend date of 21 August and a pay date of 8 September. Combined with the interim dividend of 2 cps shareholders have received 4 cps in partially franked dividends for the full financial year.
The highlight and star performer within the group was the online real estate classifieds business Domain – the unit competes with listed peer REA Group Limited (ASX: REA). Domain achieved a 45% jump in revenues with agent subscribers up 20%, listings up 16%, site visits up 30% and advertising revenue growth of 36%.
What now?
The relatively small decline in earnings suggests that the worst may now be behind Fairfax although the business is likely to still be faced with headwinds rather than enjoying tailwinds in the near term at least.
The balance sheet is strong with the company carrying $64 million in net cash. This solid position has enabled Fairfax to undertake an on market share buyback which was launched earlier in the year and has so far led to the cancelling of 37 million shares. Given the depressed share price this would appear to have been a shareholder value creating move. Pleasingly the share buyback is set to continue.
With the share price jumping over 6% at the open this morning to 86.5 cents, investors right now can purchase the stock on a trailing price-to-earnings ratio and dividend yield of 14.4x and 4.6% respectively.
