Gleaner improves half-year profit
BOOSTED BY a three per cent increase in revenue from its core operations, and with gains from its investments, The Gleaner Company Ltd, which celebrates its 180th birthday in September this year, posted after-tax profit for the first six months of this year of $42 million, an increase of $32 million to the prior period.
"We are encouraged by the positive effect of execution of our strategies for driving income and controlling cost, but are mindful that we remain in a challenging economy," said managing director Christopher Barnes, who has been paying attention to strengthening the group's digital properties, alongside its newspaper and radio operations.
The Gleaner Company reported half-year revenue of just over $1.6 billion, or three per cent higher than gross income for January to June 2013.
The company was able to keep a relatively tight hold on the costs with its broad operating expenses held to a 2.6 per cent increase, or $21 million, to $789 million, and a 2.8 per cent, or $24 million, increase in its cost of sales. "We have become quite innovative in squeezing efficiency gains out of our operations despite significant foreign currency inputs in an environment of continued devaluation; it's become a part of the culture," said Barnes.
The company recorded a J$4.8 million loss on operations for the period; however, this represented a creditable $10 million improvement on the $15 million operating loss from the prior period.
With net finance income nearly doubling to $53.8 million - on a gross of $70.3 million - the group's profit, before tax charges, was $49 million, compared to $10 million for the prior year; an increase of 280 per cent. The Gleaner earlier this year introduced a metered paywall system for its flagship online product www. jamaica-gleaner.com; similar in form to that of The New York Times and other reputable newspapers in USA and Europe. With the exception of 'latest news' postings, photo and video galleries (which remain freely accessible), visitors to this site are able to enjoy 15 free views of stories, in all other sections, in any given month, before being asked to subscribe to the service.
"We are seeing a gradual take-up in this arena; however, many persons are still challenged in accepting that paying for 'credible' news online is the way of the future," said Barnes. "The credibility and creativity of media houses will become increasingly dependent on financing from paid online content. Fortunately, we continue to have strong print products to maintain our market leadership position while we make the early transition."
The Gleaner also boasts a suite of mobile news applications for Android, iOS and BlackBerry handheld and tablet devices. The widely popular Android app has had over 44,000 installs since its inception late last year, with over 80 per cent of users based in Jamaica; representing an attractive segment of the consumer market for advertisers to reach.
"Mobile consumption of news is fast growing globally, and Jamaica is no different. No other Jamaican media company can boast the following we have in the mobile news app segment, so advertisers take note when considering proposals from others," said Barnes. "We represent the most efficient advertising spend."
In reference to print advertising sales, Barnes added that the company was encouraged to see what appeared to be a lift in activity from customers. He attributed this to the price efficiency of both The Gleaner and Star's readership, and the relative perception of credibility associated with The Gleaner's editorial efforts.
"We have the best journalists and journalism Jamaica has to offer, referenced by our increased haul of peer awards over the past several years. This, when added to the 180th anniversary celebration activities we are undertaking this year, ensures value for all of our readers, clients and partners - our gift to you."
In July, The Gleaner's radio subsidiary, Independent Radio Company Limited, introduced 'Cliff Hughes Online' to the Power 106 line-up of shows. "This move is sure to result in positive impact to the station's appeal to listeners and advertisers," said Barnes. This programming change follows an earlier relocation of the station's operations to the group's headquarters on North Street and forms a part of a profitability improvement strategy.