Caxton highlights industry conundrum

Listed media house Caxton on Wednesday (28 (August), reported a 7% rise in turnover for the year ended June 2013, however the group highlighted the continued struggle in an industry moving towards digital.

Caxton owns 41% in Moneyweb, while additional brands include Farmers Weekly, The Citizen, and a number of community titles.

Profit from operating activities was up by 12.2% and depreciation increased from R226.5 million to R241.6 million.

Net Profit from operating activities rose to R558.9 million – an improvement of 12.9%, the group said.

Headline Earnings similarly improved by 11.7% from 109.8 cents to 122.6 cents per share.

The board has declared a dividend of 55.0 cents per ordinary share (gross) and a preference dividend of 450.0 cents per share (gross) for the year ending 30 June 2013.

Newspaper publishing and printing

Caxton said that time has shown that the viability of newspaper publishing is being severely affected by the reduction in print circulation due to the popularity of digital products be it on the internet, tablets or smart phones.

“However, digital products have not yielded the same revenues as the traditional products.

“The rate of conversion does seem to be abating as both locally and internationally the swing to digital appears to be slowing down and publishers are finding new opportunities in a changing environment,” it said.

The group pointed out that the areas within which the company’s newspapers operate, remain the community and regional markets and despite problems in the greater industry, these markets have in fact flourished and are experiencing growth.

“In line with this, it is pleasing to report that the newspaper division produced good results and increased its overall market share of advertising spend.”

Caxton said its digital strategy is now in the process of implementation and a number of new sites are being rolled out “with excellent initial results”.

New products and partnerships are producing the intended results, the group said.

It said that steady progress continues to take place at The Citizen. “Whilst subject to the same misfortunes that has befallen the daily and weekly paid papers, circulations are marginally down but fortunately gains have been made in advertising market share.”

A new and invigorated redesign of the paper, utilising overseas experts and an experienced designer, has just taken place and bodes well for the future.

Magazine publishing and distribution

Caxton said that of late, magazine sales in the printed format have suffered. “This is partly due to the changes taking place within the publishing environment, but has been accentuated by the difficult economic times that readers find themselves in.

“As magazines can be considered to be an “impulse purchase”, with stretched budgets it is clear that magazine sales are suffering as consumers battle to live within their means,” it said.

The company said its magazine division had a difficult year and did not achieve its budget. Whilst advertising market share was retained, costs increased mainly on printing and circulation revenues were down.

Looking ahead, Caxton said it has achieved good results in a difficult economic environment which brought about adverse trading conditions. “Whilst the global and local economy is not expected to improve in the short term, the company is nevertheless budgeting for a modest improvement in earnings.”

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Caxton highlights industry conundrum