Fairfax Media has swung back into the black with a $224.4 million profit, boosted by $100 million worth of transactions including the sale of the Stayz holiday accommodation business.
The result for the year to June 30 is a massive turnaround from the $16 million loss suffered a year earlier.
Fairfax’s underlying net profit – excluding significant items – rose 80 per cent to $154.8 million.
But total revenue dropped 2.8 per cent to $1.99 billion.
In a brief comment on outlook, Fairfax Media said revenue was down one to two per cent for the first five weeks of the 2014/15 financial year compared to a year earlier.
Fairfax chief executive Greg Hywood said he was heartened by the performance, which was part of a multi-year transformation of the company amid structural changes in the media market.
“Today’s result underlines the ability of Fairfax to deal with the enormous structural changes impacting upon the industry,” he said.
“We are now a leaner, more agile business.”
The group’s key metropolitan media division, which includes The Sydney Morning Herald and The Age newspapers, reported an underlying revenue decline of 6.3 per cent.
Revenues from its print titles fell by nearly a quarter.
But Mr Hywood said improved profitability in metro media was a highlight, with underlying earnings rising 41.3 per cent to $120.9 million.
Digital subscriptions for The Sydney Morning Herald, The Age and the Australian Financial Review raised $24 million and contributed to an underlying 11.4 per cent increase in circulation revenue.
Real estate ad business Domain boosted earnings by 39 per cent to $57.6 million.
While Domain’s print ad revenue dropped by almost a quarter to $37.9 million, its digital revenue lifted 40.5 per cent to $108.5 million.
In its digital ventures arm, Fairfax sold off Stayz in December for $220 million and InvestSMART in August 2013 for $7 million.
Total digital ventures earnings were down 24 per cent to $19.5 million, reflecting the lower contribution from the divested businesses.
Drought and lower ad spending caused Fairfax’s Australian Community Media, which includes more than 150 newspapers, division to suffer a 16.1 per cent fall in advertising revenue to $408.6 million.
Mr Hywood announced a restructure of the division that would create a flatter management structure and “an operating model based upon local editorial and sales forces, underpinned by a more centralised services model”.
The restructure would cost $40 million by 2016, but is not expected to include the closure of some newspapers.
“New structure and model is not about closing mastheads or leaving markets,” Fairfax said in slides to be presented at an analysts’ briefing.
“Changes will sustain and strengthen the ACM business.”
Fairfax’s radio revenue fell six per cent to $103.8 million.
Revenue for the New Zealand business fell 5.4 per cent to $NZ398.9 million but earnings rose 3.1 per cent to $NZ80.2 million, helped by strong agricultural and government advertising.
Fairfax announced a fully-franked final dividend of two cents a share, up from one cent.