SCMP Group reports rising revenue, eyes future growth from digitisation strategy
Revenue tops HK$1b for third straight year as decline in print advertising is offset by strong growth in digital sales and online platforms
SCMP Group, publisher of the , reported annual revenues in excess of HK$1 billion for the third consecutive year that displayed a solid basis for future growth, the company said in financial results for 2014 posted yesterday.
Top line revenue grew 8 per cent to HK$1.24 billion while adjusted operating profit gained a more modest 4 per cent to HK$167.7 million, the company said in a filing to the Hong Kong stock exchange.
"We believe we have built the beginning of a healthy broad-based foundation capable of yielding multiple revenue streams into the future," the company said in a statement alongside the financial results that outlined a digitisation strategy for "futureproofing" the group.
It said a push into international markets in recent years was paying off and had helped the group's share of international revenues grow.
"Integral to this approach will be building on the brand positioning of our flagship as the independent insider on China," the statement said.
Revenues from the newspaper publishing division - the group's core business - rose 3 per cent to HK$841.5 million and delivered a 23 per cent increase in net profit to HK$59.7 million.
A 41 per cent surge in digital advertising revenue in the group's magazine publishing operations helped revenue grow 17 per cent year on year to HK$325.8 million "despite a slow and shrinking magazine market".
The SCMP's property group saw rental income rise 3 per cent to HK$31.4 million.
While the group painted a positive picture of the future, it also conceded that market conditions had been weakening and that the macroeconomic environment remained a concern.
Total operating costs and expenses rose 9 per cent to HK$1.07 billion and staff costs rose 5 per cent to HK$528.6 million, largely as a result of increased headcount for the group's new magazine titles. Average headcount rose about 10 per cent.
Net profit attributable to shareholders, excluding gains on investment properties, slipped 8 per cent to HK$125.4 million, mainly due to losses from associated companies, the company said. Earnings per share fell 39 per cent to 8.8 HK cents.
The company said it was continuing to liaise with regulators on its public float issue. Trading in shares of the SCMP Group has been suspended since February 2013 when the public float fell below 25 per cent.
The company has been exploring ways to resolve the issue and find a way to "afford shareholders the opportunity to realise their investment", it said. A buyback proposal submitted to substantial shareholders in 2014 was terminated in 2015 after failing to secure their agreement to it.
"Further announcements will be made at the appropriate time to keep shareholders of the company updated on the progress," the statement said.
