HONG KONG, 25 August 2015 –
SCMP Group Ltd (SEHK: 583) yesterday announced the interim results for 2015. Interim revenue was $549.3 million, 8% lower than the same period in 2014. Net profit attributable to shareholders, which included a fair value gain on investment properties of $137.1 million, and a gain on partial disposal of interests in an associate of $43.3 million, was $208.7 million compared to $48.2 million for the same period in 2014. Carving out these gains, net profit from normal operations amounted to $28.3 million compared to $48.2 million in the same period in 2014.
In the first half of 2015, Hong Kong experienced muted financial performance, with the secular challenges from 2014 carrying over into the first two quarters. Locally, retail sales value for the first five months dropped 1.8%1, and luxury retail sales decreased year-on-year by more than 10% in June 20152. With diminished retail consumption, a narrowed IPO pipeline in Hong Kong and China, together with stock market volatility in the US, Europe and at home, the overall anemic market sentiment has caused advertisers to pull back on their spending.
In spite of this uncertainty, the SCMP Group remains steadfast on its path to continue fortifying existing revenue drivers, while growing and developing new growth thrusts organically and inorganically. Importantly, the Group’s fundamentals are strong.
For the interim period ended 30 June 2015, the Board of Directors resolved to declare an interim dividend payable of HK 1.3 cents per ordinary share.
The Newspaper division recorded a decrease in revenue by 8% as compared with same period of 2014. This decline is attributable to restrained retail and luxury market spending and the slow down from the financial sector, which in turn reduced the sales volume of display advertising and IPO notices. This drop however, was partly mitigated by the higher revenues from both digital subscription and online advertising. Print recruitment revenues also saw a decline from Classified Post and Jiu Jik. However, a gain was achieved in market share of online job volume through effective campaigns for CPjobs.com and Jiujik.com. The previous period when the division reported a loss in the first half was in 2009 at the time of the global financial crisis.
Overall circulation of South China Morning Post and Sunday Morning Post remained stable, with digital subscriptions continuing to grow strongly to offset the decline in print circulation. Total circulation revenue grew 2% for the period.
Total revenue from the Magazines division decreased 13%, as the lackluster retail and luxury market dampened advertising spending. Despite the weak market conditions, the women’s titles, including Cosmopolitan, Harper’s BAZAAR and ELLE were able to gain market share from our competitors, which further strengthened our dominant position in women’s monthly magazine market.
SCMP Group CEO Mr. Robin Hu noted, “Entering the second half of 2015, signs of significant recovery have not been apparent. In spite of this, the Group’s fundamentals are strong, and the company remains on its path to continue fortifying existing revenue drivers, while growing digital-specific revenues, and expanding overseas readership. Of note, the company’s diverse product portfolio that includes print, digital, outdoor and events, collectively increases the Group’s resilience during challenging times.”
“Internally, efficiency improvement programmes are already in place to strategically reduce operating expenses and optimise our processes to nurture homegrown talent, innovate green-field products, and capture emerging opportunities. By activating these growth strategies, together with prudently managing our strong fundamentals, the Group looks forward to building and managing our future growth”.
2“Report on Monthly Survey of Retail Sales, June 2015”, Census and Statistics Department, HKSAR Government
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About SCMP Group Ltd and South China Morning Post
SCMP Group Limited (SEHK: 583) is a leading newspaper and magazine publisher in Asia. Its flagship publication, the South China Morning Post, is Hong Kong’s internationally recognised English language newspaper and has the city’s most affluent and influential readership.
First published in 1903, the newspaper has developed an enviable reputation for authoritative, influential and independent reporting on Hong Kong, China and the rest of Asia. Available in print, mobile, tablets and online through scmp.com and e-reader editions, the South China Morning Post reaches a global audience with daily breaking news, analysis and opinion, multimedia articles and interactive forums. The South China Morning Post received over 160 awards in 2014-15 for excellence in editorial, marketing and technical capabilities. Other titles in the Group include the Sunday Morning Post, Nanzao.com (南早.com), Nanzaozhinan.com (南早香港指南.com), STYLE, Destination Macau, The PEAK, HK Magazine, The List and Where Hong Kong.
Through the joint venture partnership with Hearst, SCMP Hearst publishes the Chinese editions of Cosmopolitan, CosmoBride, Harper’s BAZAAR, Harper’s BAZAAR Art, Harper’s BAZAAR Bride, Esquire, ELLE, ELLE Men, ELLE Wedding, ELLE Décoration, and ELLE Accessories; and operates Cosmopolitan.com.hk, Cosmogirl.com.hk, Harpersbazaar.com.hk, ELLE.com.hk and EsquireHK.com in Hong Kong.
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