SCMP profit buoyed by strong print and online ad sales

Focus on traditional and new media segments delivers 6pc gain in core profit for first half

PUBLISHED : Friday, 22 August, 2014, 1:21am
UPDATED : Friday, 22 August, 2014, 1:55am

SCMP Group, publisher of the South China Morning Post, expects its core business to remain sturdy as the company sharpened its focus on developing strategic opportunities in both traditional print and new media market segments.

"By systematically investing in organic and inorganic growth thrusts in the past two years, the group has been able to withstand economic uncertainty while broadening revenue streams," SCMP chief executive Robin Hu said yesterday.

SCMP's regulatory filing showed that its interim net profit totalled HK$48.2 million, compared with HK$105.2 million a year earlier, which included fair value gains on investment properties of HK$59.6 million. It did not record any gain or loss on investment properties in the six months to June 30.

Carving out the property revaluations last year, its net profit from normal operations rose 6 per cent year on year in the first half. That growth was mainly driven by strong print and online advertising sales from its newspaper and magazine operations, as well as contributions from the contract printing business.

Interim revenue increased 17 per cent to HK$597.9 million, up from HK$509.1 million the previous year.

Turnover from the newspaper division climbed 11 per cent to HK$406.1 million, from HK$365.5 million a year ago, on higher advertising sales and online subscriptions. In the first half, new online subscriptions increased 74 per cent.

Magazine publishing had a robust 27 per cent gain to HK$158.1 million, up from HK$124.7 million, on strong print and online advertising sales from Cosmopolitan and Elle.

Rental income from SCMP's property business also grew, with a 4 per cent increase from the previous year to HK$15.4 million.

Despite a soft economic environment in the first half, SCMP managed to beef up its operations. The company bought luxury lifestyle magazines Destination Macau and DM Exclusive, as well as expanded its outdoor advertising business. Its mobile traffic also grew.

Hong Kong's advertising market in the quarter to June reached HK$11.2 billion, up 7 per cent from a year ago, according to data from media-monitoring firm admanGo. In the quarter to March, spending advanced 5 per cent year on year to HK$10.1 billion.

"Entering the second half, we hold a cautious forward-looking view as luxury brand spending remains restrained, and the overall retail market is less buoyant than last year," Hu said.

Trading in the shares of SCMP has been suspended since February 26 last year when the company's public float fell below 25 per cent.