Fairfax Media will list its Domain classifieds as a separate ASX company, extracting full value from the fast growing business.
The media company made the announcement as it posted half year results showing after tax net profit up 205.6% to $83.7 million on revenue of $913.0 million, down 4%.
Underlying profit, without significant items, rose 6.1% to $84.7 million.
Fairfax shares jumped. In early trade, they were up 7% to $0.93.
CEO Greg Hywood says the time is right for Domain to take the next step.
“It has achieved the scale in revenue, earnings and audience needed to operate as a standalone listed entity,” he says.
Fairfax didn’t put a value on the float but analysts say it could be worth as much as $2 billion in market capitalisation, or about the same as the main company is valued by its current share price.
Antony Catalano will continue as CEO of Domain.
Fairfax plans to still keep a controlling majority of Domain of between 60% and 70% and sell the rest.
Hywood says the Domain Group delivered digital advertising growth of 15% in a challenging listings environment.
For the half year to December, Domain revenue grew 5.8% to $162.9 million.
Hywood says the publishing businesses maintained an intense focus on cost reduction, a stronger emphasis on digital publishing and made progress in building new revenue opportunities.
“We are pleased with the continued profitability of our publishing businesses in the face of the largest structural change in the industry’s history,” he says.
“This is a remarkable performance which few publishers globally have matched.
Revenue for metro media, the traditional business, was down 8.2% to $279.1 million over the six months.
Australian Community Media revenue dropped 12.2% to $225.6 million.
The company declared a dividend of 2 cents a share, 70% franked.
The performance of each segment within Fairfax for the half year to December:
Business Insider Emails & Alerts
Site highlights each day to your inbox.