Gleaner profit improves in challenging media environment
Like the rest of the world, Jamaica is an increasingly difficult place to be in the media business. In this environment, The Gleaner group, with the strength of its balance sheet, has remained profitable as it responds to challenges posed by rapidly changing media technologies.
In its 2014 financial year, for instance, while sales were flat at J$3.3 billion, The Gleaner Com-pany reported a three per cent increase, to J$117.7 million, in profit from operations. This swelled to a pre-tax return of J$225 million - up 145 per cent - after The Gleaner booked to its bottom line $136 million, or one-third share, of profit and retained earnings from a real estate investment company, of which it is part owner.
The group posted profit after tax of $181 million versus $86 million prior year.
With little debt and a readily realisable portfolio of investment assets at hand, the company had shareholders equity of J$2.67 billion, or $2.20 per share, of which approximately 1.40 per share exists in liquid assets. It is this strength which The Gleaner Company, whose flagships are the daily newspapers, The Gleaner and The Star, has leveraged to enhance these products, as well as expand its other media properties, and extend its foray into the market for digital information.
"The business continues to direct operating and capital expenditures towards efficiency projects, as well as expanding and upgrading its digital platforms and services," said the company's managing director, Christopher Barnes.
"One such investment includes the upgrade of the editorial content management systems (CMS), which offers greater flexibility in creating and presenting digital content," he added. "We have also recently upgraded our e-paper platform to be more user-friendly for all platforms, including mobile tablet devices."
A significant part of The Gleaner's success in recent years - in the face of the Jamaican Government's fiscal austerity and a resultant softening economy - rests with its ability to manage its costs. Some of these, like the J$122 million, or seven per cent decline in the cost of the sales, are gains from investment in technology and product adjustments such as narrowing the width of its newspapers, which lowered the cost of newsprint and reduced waste.
The Gleaner has also kept a tight lid on its administrative costs, which, at J$1.54 billion last year, was a mere two per cent above the previous years. And that was after a 26 per cent increase, to J$415.5 million, in "other operating expense", partially reflecting the spending on technology and product development. Much of that increase, though, was offset by a six per cent decline in general administrative expenses, to J$645 million and a four per cent decline in distribution costs.
Barnes suggested that The Gleaner's strategy of broadening its digital offerings was bearing fruit with "encouraging" take-up of on-line subscription to the flagship Gleaner website, and "explosive growth on social media platforms for both Star and Gleaner", while the radio operations, which in 2013 were consolidated into the company's headquarters in downtown Kingston, "continue to benefit from operational cost synergies and to strive for further profitability improvements".
Said Barnes: "The objective of the group remains making the transition to digital media, using gains from operating efficiencies and margins in print, to invest in building out digital platforms and content. Jamaica is increasingly becoming a digital society and we are proud that The Gleaner's products and content continue to be top-of-mind for consumers in this growing market."