Gavin O'Reilly gave his first report yesterday, Tuesday, 5 May 2009, as chairman of Australian media company, APN News and Media, after being recently appointed as chief executive of Independent News and Media.
O'Reilly said APN would benefit from government stimulus packages, and that markets in the short term would remain difficult. He said that if advertising and credit markets did not deteriorate further, the company's profit would be kept under control.
He was speaking on the back on last week's announcement by Independent in Ireland that it might not be able to repay a €200-million bond that is due to mature on 18 May.
Statement
In its statement it said: “While the group was compliant with banking covenants... the continued difficult trading conditions within which the group is currently operating means there is now a strong likelihood of a breach of the financial covenant within the group's facilities during 2009.”
The group, which has operations in five countries, including South Africa where it owns several publications such as The Star, Pretoria News and The Cape Argus, reported net losses of €159.4-million for the year.
It reported that group revenue fell by 11.76% to €1.47 billion for the year ended December 2008.
South African operations fell 9.5% to R2.4 billion. Although the group did not mention job cuts, rumours have been circulating that an estimated 20% of staff face retrenchment at the local Independent Newspapers offices.
Lost jobs
Independent SA would not comment, but last year two senior journalists, Jeremy Gordin and Hans Pienaar, confirmed that they had lost their jobs.
Wadim Schreiner, MD of media monitoring company Media Tenor, said that Independent would have to cut costs and retrench more people this year.
He said: “They'll probably retrench senior journalists first and rely more on stories from news agencies. What Independent Newspapers is experiencing is a global phenomenon.”
Schreiner said that newspapers in South Africa, especially those under the Independent stable, were too broad in their audience targeting and were losing advertisers' confidence. “Newspapers need to establish niches for themselves, targeting specific audiences... and they'll always have dedicated readers and advertisers,” he added.
Khulekani Dlamini from Afena Capital said that print media was losing market share to other forms of media, mainly the Internet.
“Even during times of high spending by advertisers, print continues to lose share of advertising wallet to the Internet, which is actually doing very well. Internet advertising revenue in developing markets is growing by levels around 50 percent and in developed markets its growth is in the teens,” he said.
Dlamini said that the print industry was suffering because of high fixed costs, such as printing costs that could not be easily cut in hard times.
Source: The Times
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