Economic recovery a good news story for SCMP profitability

PUBLISHED : Friday, 18 March, 2011, 12:00am
UPDATED : Friday, 18 March, 2011, 12:00am

Publisher SCMP Group said the economic recovery helped lift its underlying profit to HK$128.4 million last year from HK$25.6 million in 2009.

The owner of the English-language newspapers South China Morning Post and Sunday Morning Post was evaluating diversification into related business areas to carve out extra sources of revenues and growth prospects, it said yesterday.

Including a HK$166 million gain in fair value of investment properties, the group's attributable profit more than doubled to HK$294.4 million from HK$138.2 million last year.

Managing director and chief executive Kuok Hui Kwong said: 'Our recovery in 2010 was the result of a combination of diligent efforts to rein in costs and seek new business opportunities as well as a healthy sustained recovery in the advertising, [initial public offering] and recruitment markets.'

SCMP's revenue jumped 19 per cent to HK$881.1 million as a stronger economy fuelled newspaper advertising and recruitment services.

The newspaper division reported improved performance with profits of HK$118.99 million compared with HK$20.06 million in 2009, on a 22.74 per cent jump in revenue to HK$724.85 million.

The unaudited circulation figures of the two newspapers grew in the second half of last year, with the South China Morning Post edging 0.5 per cent higher to an average daily of 101,500 and the Sunday Morning Post up 6 per cent to 79,564.

Newsprint costs declined 23 per cent last year, a saving which was offset by the final royalty payment to Time Inc for ceasing the operation of Instyle magazine.

Taking into account the impact of the termination of Instyle, the magazine division recorded a HK$6.8 million profit last year. No comparative figure was available.

SCMP's staff costs rose 9 per cent.

A final dividend of 4 HK cents per share was proposed, taking the full-year total to 6 HK cents per share. No dividend was declared in 2009. Earnings per share rose to 18.86 HK cents from 8.85 HK cents. SCMP shares climbed 1 HK cent to HK$1.57 yesterday before the announcement.

Sunday best

The Sunday Morning Post recorded an unaudited circulation figure of 79,564, an increase of: 6%