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Panpa Bulletin : June 2006
Development of its online business has been given a higher priority by WA's biggest media group, West Australian Newspaper Holdings, publish- er of The West Australian. The company plans to launch a new website on July 1, replac- ing its current under-resourced site which attracts a low vol- ume of visitors, has shown lit- tle growth, and compares bad- ly both in content and design with those operated by most Australian publishers includ- ing those in regional areas. WANH has appointed a new general manager, online and e-commerce, to run the new website. It will include more energetically pursued and dis- played employment, real estate and motor advertising. One of the biggest improvements will be an upgraded news content. The amount of news made available on www.thewest.com. au. has always been strictly lim- ited. It runs no updates despite the fact News Limited's Perth Sunday Times provides an ex- tensive seven-day service. One of the State's most pop- ular ISPs, Westnet, provides a better national headline serv- ice as well as a click-through facility to Fairfax's and News Limited's main home pages. Cathy Bolt, one of The West Australian's business writers, has identified "fear of canni- balising the circulation and ad- vertising in The West Austral- ian" as a major reason for the slowness in not developing its website more vigorously. Despite the highly cost-con- scious approach by manage- ment WANH has been losing more than $500,000 a year op- erating www.thewest.com.au. "I think online advertising has now matured to a degree that it is separate market to the print market," outgoing man- aging director Ian Law said. Law said the new site would include current local, national and international news and involve far greater interaction between the news gathering resources of the newspaper and the online business. News of the fresh approach to running the site was released in a commentary explaining details of the company's strong third-quarter trading results - an underlying net profit of just over $26 million on group rev- enue of $294.9 million This takes the figure for the nine months to March 31 to $78 million, up 5.4 per cent on the previous year. That points to the company being on track to post its first $100 million net profit, largely due to the impact of the State's booming econo- my on trading conditions. Group profit, however, after tax and abnormals was only $43.1 million, 40 per cent down on the matching period last year, because of the inclusion of $31.3 million for redundan- cies and $18.7 million for ac- celerated depreciation of old presses. Net advertising revenue for The West Australian, which ac- counts for more than 80 per cent of WANH's profits, rose 4.1 per cent to $170.7 million for the nine months. This was a slowdown on the first half's 5.2 per cent growth, a level considered a solid result by the company given the slow- ness encountered in January. Trading conditions improved noticeably in February, March and April for its newspapers and radio. Law, who presented the fig- ures on his final day at the com- pany before joining Australian Consolidated Press, said the introduction of the new press lines was a once-in-a-lifetime upgrade, "a real generational change in terms of production facilities here in Perth". He said he was optimistic about the outlook, notwith- standing the dampening im- pact of rising fuel prices and interest rates. "Obviously we are in an en- vironment where there is some inflationary pressure in WA," he said. "There are fuel surcharges in freight and that has softened some of the retail confidence. But the fundamentals of the State are very strong and the business is well placed." The 4.1 per cent increase in total gross advertising revenue was driven largely by employ- ment classifieds which grew 17.9 per cent on the back of the thriving economy. But real estate classifieds dipped 2.5 per cent and new home classifieds fell 8 per cent. But here again the economy is the influencing factor. Real estate volumes are down because properties are being sold so quickly, and there is a shortage of properties for let- ting. What did help the good un- derlying profit was a 7.1 per cent rise in circulation rev- enue after a 10-cent increase (to $1.10) in the cover price of the weekday West Australian in June and a 20-cent lift (to $2.20) in the price of the Satur- day paper in February. Both increases have had only a minimal affect on circulation levels. Earnings by Colourpress, the commercial print business, slumped 30 per cent after Fair- fax switched the printing of the WA edition of The Australian Fi- nancial Review to Rural Press's new facility at Mandurah. Law expects the commissioning of the new presses early next year will help Colourpress improve its performance. Until Law's replacement Ken Steinke joins WANH in July, chief financial officer Tom Gar- ven is running the business. By Jack Beverley Expanding The West’s frontiers By Warren Page Trans-Tasman media group, APN News & Me- dia, expects New Zealand's online advertising mar- ket, which has been much slower to grow than in Aus- tralia, to start catching up and be a major contributor to the group's $10 million online income target for this year. APN's plans to expand its online activities were outlined by APN chief ex- ecutive Brendan Hopkins at the company's annual meeting, at which share- holders were told they could expect to see earn- ings rise by at least five per cent in 2006. Chairman James Parkinson said the first four months of 2006 were ahead of last year -- ''with growth expect- ed to accelerate against the prior year.'' During calendar year 2005, APN, which is 39.7 per cent owned by Irish media baron Tony O'Reilly's Inde- pendent News & Media, in- creased its net profit 15.7 per cent to $149.7 million, its fourth consecutive year of double-digit profit growth. A major element in APN's thrust into the local on- line-search business in New Zealand and in regional Aus- tralia will see the company's UBD business directory in NZ, which has 130,000 busi- ness listings, combine with its Wises mapping service in cre- ate a "highly localised'' online operation. Hopkins said he expects the group's Search4Jobs site to be- come the biggest online em- ployment site by the end of the year. Similarly branded property and vehicle sites are being launched. APN predicts NZ online profts will catch up June 2006 PANPA BULLETIN | 39