34pc rise in profit for SCMP Group
SCMP Group, which publishes the South China Morning Post, said normal operating profit rose 34 per cent last year, but it warned of economic uncertainties ahead.
Nevertheless, the group, which also publishes the Sunday Morning Post and a variety of Chinese-language magazines, said it would continue to invest in new products and diversify its businesses to achieve long-term growth.
The company reported that normal operating profit rose to HK$172.2 million last year.
'The group has been enhancing existing products and aggressively developing new consumer products with revenue driving potential,' said SCMP Group chairman David Pang in a results announcement posted on the website of the stock exchange.
The strong growth was driven by higher advertising income and increasing circulation for the newspapers.
Newspaper division revenue rose 7 per cent last year with more advertising from overseas property firms, jewellery, fashion, telecommunication and branded goods. This was offset by a 29 per cent drop in initial public offerings-related advertising as poor market sentiment in the second half led many companies to delay their listing plans.
The unaudited circulation figures in the second half were up for the South China Morning Post, edging 2 per cent higher year on year to an average daily circulation of 103,328, while the Sunday Morning Post was up 1 per cent to 80,357.
The magazine business had a net profit of HK$30.3 million last year, against a HK$12.3 million loss the previous year after cessation of loss-making mainland titles in 2010.
Looking ahead, Pang said the 'macroeconomic factors remain our greatest concerns' as the European debt crisis, the weak US economy and possible economic slowdown on the mainland would add to economic uncertainties this year.
The group, however, would continue to strengthen its print and digital products to widen readership and would continue an efficiency programme to keep costs down amid inflationary pressure.
'We are continually evaluating possible areas of diversification and the application of our core competencies and strengths into new related business areas. This will open up the opportunity for new revenue and new, long-term growth prospects,' Pang said.
Louis Tse Ming-kwong, a director of VC Brokerage, said the results were good. 'There are a lot of free dailies and free information on the internet. The competition is keen but the results show that the SCMP can still maintain its leading position for readership and advertisements in the newspaper industry here,' Tse said.
'The outlook is positive as IPOrelated advertisements will bounce back this year,' he said. 'The stock market has improved and there should be more new listings.'
A final dividend of 4 cents per share was proposed, taking the full-year total to 8 cents per share, up from 6 cents last year.
Earnings per share rose to 23.75 cents from 18.86 cents.
SCMP shares rose 1.38 per cent to close at HK$1.47 yesterday ahead of the announcement.
The rise in total net profit to HK$370.7 million for SCMP Group, including a HK$198.5 million fair-valuation gain on property