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Fairfax shares fall to record low after assets writedown | Fairfax shares fall to record low after assets writedown |
(40 minutes later) | |
Shares of Fairfax Media have hit a record low after the firm wrote down the value of its papers by almost A$2.5bn ($2.6bn; £1.6bn). | Shares of Fairfax Media have hit a record low after the firm wrote down the value of its papers by almost A$2.5bn ($2.6bn; £1.6bn). |
The writedown resulted in the firm reporting a net loss of A$2.73bn for the last financial year. | The writedown resulted in the firm reporting a net loss of A$2.73bn for the last financial year. |
The stock price was also hurt by the failure of Gina Rinehart, the firm's biggest shareholder, to sell almost 5% of her stake at 50 cents per share. | The stock price was also hurt by the failure of Gina Rinehart, the firm's biggest shareholder, to sell almost 5% of her stake at 50 cents per share. |
Its shares fell as much as 12% to 44.5 cents in Sydney. | Its shares fell as much as 12% to 44.5 cents in Sydney. |
The firm warned that uncertain economic conditions, which have hurt its advertising revenue, were likely to continue, further denting investor morale. | |
Growth concerns | |
Fairfax Media publishes some of Australia's best known newspapers including The Age and the The Sydney Morning Herald. | |
It enjoys a considerable share of the Australian market. However revenues have fallen due to a cut in spending by potential advertisers and the growing popularity of online publications. | |
Fairfax said its revenues had dropped 6% in the last financial year. It added that this year's revenues are currently down by 10%. | |
"I have been in this industry since the late 1970s and I have never seen an advertising environment of the type we are currently experiencing," Greg Hywood, chief executive of Fairfax said after the earnings release on Thursday. | |
"We are managing Fairfax Media with no expectation of an early recovery," Mr Hywood warned. | |
The firm has already announced plans to streamline its business, including 1,900 job cuts and the closure of two printing facilities in Sydney and Melbourne. |
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