Fairfax Media plans to book a $989 million pre-tax impairment on its publishing assets.
A short time ago, Fairfax shares were down 1.4% to $1.035.
The non-cash writedowns follow a review and will be reported next week when announcing the company’s full-year 2016 results.
The impairment charges include:
- $484.9 million for Australian Metro Media
- $408.8 million for Australian Community Media
- $95.3 million in New Zealand.
“The Australian Metro Media adjustments reflect the market realities that the Metro business is facing and the change to segment reporting,” says CEO Greg Hywood.
“The considerable work done to transform the publishing business has created flexibility and optionality around the future, and we are confident in our plans to transition to our new sustainable publishing model.
“With regard to Australian Community Media, we have successfully delivered on our transformation program through FY16. The adjustments we are announcing today are appropriate as we recognise the challenges this business continues to face in rural and regional markets. We continue to develop initiatives and consider opportunities for this business.
“Our New Zealand publishing business faces similar issues to those in Australia.
He says the impairments do not affect Fairfax’s ability to pay future dividends
Fairfax Media also announced moved its profitable Domain business out of metropolitan publishing and into its own grouping.
“Domain has established itself as a genuine force and aggressive competitor in real estate media and services,” says Hywood.
“We continue to invest in Domain to make it stronger and extend its business model beyond listings to capture the immense opportunity in the broader real estate ecosystem.”
(Disclosure: Allure Media, the publisher of Business Insider, is 100% owned by Fairfax Media)