Highlights
- Turnover: HK$583.2 million
- Operating profit: HK$180.9 million
- Profit attributable to shareholders: HK$146.5 million
- Earnings per share: HK$0.094
- Dividend: HK$0.06
(Hong Kong, August 31, 2006) – SCMP Group Limited (SEHK: 583) ("the Group") reported a 30% growth in profit attributable to shareholders to HK$146.5 million for the first six months ended June 30, 2006. Turnover rose 9% to HK$583.2 million.
The Board of Directors declared an interim dividend of HK$0.06 per share.
Operating costs and expenses before depreciation increased 5% or HK$16.5 million. The average cost of newsprint rose 11% from US$545 to US$604 per metric ton. Staff costs increased 3% due to an increase in headcount and salary increments. Advertising and promotion expenses increased 21% as events sponsorship and marketing activities were stepped up.
Capital expenditures were HK$10.9 million, of which HK$4.5 million was spent on development of websites and content management system, replacement of magazine circulation system and upgrading of the accounting system.
Business PerformanceThe business environment has been favourable with a stable economy and low unemployment. According to Admango, the total advertising market grew 8% in the first half.
The Group’s results were boosted by a 47% growth in notices advertising and an 11% growth in display advertising sales. Yields on display ads improved following a rate increase for prime positions at the beginning of the year and strong bookings for color ads.
Recruitment revenue was stable. The unaudited circulation of SCMP remained at 104,000 while Sunday circulation dropped 1% to 80,000.
The results of the Group’s other businesses were also better than last year, except for book publishing which incurred losses due to higher stock provisions.
Outlook"The economy was strong in the first half of the year, and we expect these economic conditions to continue in the second half" said Nancy Valiente, Managing Director of South China Morning Post Publishers Limited. "But we remain concerned about rising newsprint cost, salaries and rent. The impending abolition of rules requiring listed companies to publish results in newspapers will also have an impact on the Group’s turnover." Revenue from results announcements contributed 5% to Group turnover and 6% to the Newspaper Division’s advertising revenue in the first half of 2006.
Technology is playing an increasingly important role in content creation and advertising and changing the media and publishing landscape.
"Credible and relevant content is at the heart of the Group’s success. We will continue to build our publishing brands, raise editorial standards and invest in transforming the business to take best advantage of the changing nature of content creation and delivery," said Valiente.
The Group will continue to develop its digital media capabilities to build readership as well as expand advertising products to support future revenue growth.
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About SCMP Group Limited
SCMP Group Limited (SEHK: 583) is a leading newspaper and magazine publishers in Asia. Its flagship publication, South China Morning Post, is the leading English language newspaper in Hong Kong and has the city’s most affluent and influential readership. Other publication titles of the Group include the Sunday Morning Post, the Chinese editions of Cosmopolitan, Harper’s Bazaar, CosmoGirl!, Maxim and Automobile magazines.This press release can be downloaded from www.scmpgroup.com.
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