Mon | Jun 26, 2017

Gleaner records $71 million pre-tax profit

Published:Monday | November 17, 2014 | 11:00 AM

The Gleaner Company's strategies to increase revenue and improve operational efficiencies under tough market conditions continue to have a positive impact on the media entity's performance to date in its 180th year of operations.

Its management of expenses, coupled with improvement in finance income, contributed to an increase in the media firm's pre-tax profit, to $71 million, for the nine months to September, when compared to the same period last year.

"We have done well to keep expenses under control," said Gleaner Managing Director Christopher Barnes.

"However, we are very clear that, in the long term, we have to grow the business," Barnes added. "That is why, in addition to maintaining our position as the market leader in print, The Gleaner Company continues to develop its radio and digital properties, which are on a growth path."

During the review period, The Gleaner Company reported revenue of $2.43 billion - an increase of $50 million, or two per cent higher than the January to September 2013 period. Its cost of sales, at $1.35 billion, was up just over one per cent, while its total operating income of $1.1 billion increased by approximately three per cent.

However, in a period when Jamaica's inflation increased by over seven per cent, The Gleaner's general expenses for running the operation rose by under one per cent to $1.13 billion, with costs flatlining or showing declines in most centres.

The upshot of this was a loss of $33 million this year to date, an improvement of $14 million over prior year. At the same time, the company's net finance income - from investments of more than $1.5 billion - rose over 60 per cent, to $104 million, providing the path, after the operating loss and finance costs, to the $71 million in pre-tax profit. After a tax charge of $12 million, the company reported net profit of $59 million or 4.84 cents per share.

With total assets of $3.7 billion, the media company maintains a strong balance sheet with very little debt and considerable near-cash investments. Shareholders' equity stands at approximately $2.6 billion, or around 70 per cent.

Barnes reaffirmed the company's strategic push to adopt new content and commercial strategies, as well as invest in new technologies for dissemination of the group's content in an economy that is only now emerging from a long recession.

Expectedly, some of the reform measures made under Jamaica's International Monetary Fund programme have curtailed demand, including spending on media.

"We have had to be creative to hold our position. We have enhanced content in print and continue to broaden our footprint digitally, via Gleaner Online and other products," said Barnes. "We are hopeful that the holiday season will see the usual increased demand and associated commercial activity, which, when coupled with the momentum The Gleaner has gained in the market with recent journalism awards and being designated Media of the Year by the advertising industry, augur well for continued improvement in our year of celebrations."

Said Barnes: "The Gleaner group's products and services, as confirmed by our industry partners, and the journalism fraternity, position us firmly as the best media outlet in Jamaica in terms of reach for advertisers, service delivery, and trusted, credible content."

The Gleaner last traded on the JSE at $1.05 per share.