Ferret's Stock to Watch: RURAL PRESS LIMITED 05:48, Monday, 25 October 2004
Sydney -Monday - October 25: (RWE) **********************************
OVERVIEW ********
Rural Press emerged as a highly prospective group after the upheavals in John Fairfax in the late 1980s caused by the stock market crash in October 1987.
The Fairfax rural interests were part of the settlement for the Vincent Fairfax side of the family to go their own way and leave Warwick Fairfax to do his own thing supported by his mother and which finished up a disaster.
Since then chairman John B Fairfax has built Rural Press into a significant media group and a force to be reckoned with in any media re-alignments following the election.
Mr Fairfax told the annual meeting on Friday that trading results, as a whole, for the first 16 weeks were ahead of target and ahead of last year.
"The Australian Stock Exchange continuous disclosure guidelines require companies to announce when their current year performance is likely to exceed the previous corresponding period by 10 to 15 per cent," Mr Fairfax said.
"Our first half result, in comparison to last year, will benefit from the inclusion for the first time of the Harris and Co and Bundaberg Broadcasting acquisitions as well as an additional week of trading.
"Including these one-off benefits, and barring unforeseen events, we are optimistic of achieving at least a 25 per cent increase in first half profits.
"However, it is unlikely growth in the second half will be at this level, he declared.
He was happy to reflect another impressive result for 2004 and indicated that the new financial year had got away to a sound start.
Earlier at the meeting, Mr Fairfax drew a comparison of his company being likened to an Olympic athlete.
"This time four years ago, at the time of the Sydney Olympics, I likened our company to our then successful athletes in achieving a personal best.
"Four years later, with the completion of the Athens Olympics, I am going to be so bold as to again liken us to our very successful athletes as we too have again scored a personal best by achieving a 27.3 per cent lift in net profit after tax and minorities, to a record $87.1 million.
"It is worth noting that this record surpasses by 64 per cent our personal best of four years ago of $53 million.
"As with athletes, these satisfying results don’t just happen.
They only come about through dedication, energy, commitment, clear objectives, and by striving for a continuous improvement in all facets of the business.
The chairman told the meeting, "We are fortunate in having a management team surrounded by dedicated and enthusiastic staff within our group that possess those qualities, and who are responsible for these successive improvements in annual earnings, and in turn, dividend payments to our shareholders.
"Perhaps these records are achieved by a substance coursing through the veins of our management athletes (other than printers ink) – a substance known as adrenalin.
"High volumes of advertising and a multitude of news stories during the year have enhanced the bottom line and also given encouragement to those who work on behalf of shareholders.
"We are grateful to management and staff for what they have achieved," he said.
As mentioned in the August 26 profit announcement, the 27.3 per cent growth was driven by the company's core Australian publishing and printing operations, demonstrating the widespread economic strength in regional markets in Australia.
SHARE PRICE MOVEMENTS *********************
Rural Press shares rose 11c to $9.50 on Friday Rolling high has been $9.58 and low of $6.70. Dividend is 39 cents a shares to show a yield of 4.11 per cent.
The chairman told shareholders that despite lingering drought in some parts of the Eastern seaboard, Australian agricultural publishing recovered the revenues and profits lost in the prior year, assisted by increased volumes of national, property and classified advertising.
Our regional and metropolitan publications achieved one of their strongest years of growth for the last decade, driven by the buoyant real estate market, local and classified advertising.
Importantly, a majority of all our paid publications achieved circulation growth.
These advertising and circulation revenues would not have been possible without our ability to offer extensive full colour opportunities to our advertisers and readers.
"The ongoing expansion of our press facilities is vital to our continuing success, Mr Fairfax said.
During the year, a number of press projects were completed, including the new printing plant at Wendouree, Ballarat, and the company implemented press capacity upgrades at Ormiston, Queensland, and Dubbo, New South Wales.
Computer to plate technology at Wendouree enhanced production efficiencies.
INVESTMENT IN EQUIPMENT CONTINUES *********************************
The pace of press investment is proceeding unabated in the current year with further press upgrade commitments for Ballarat, only a year after the original press was commissioned.
Press upgrades are also taking place here at North Richmond, in Canberra and Port Macquarie, New South Wales.
The company establishing a "greenfield" printing site at Mandurah in Western Australia.
Anticipated capital investment of $60 million this year includes $50 million for those printing projects together with approximately $10 million on technology maintenance in the group.
This ongoing investment in technology is vital to satisfy effectively the needs of our internal and external publishing customers.
New Zealand agricultural publications maintained previous profit levels in a more cautious agricultural market, impacted by the increased value of the New Zealand dollar.
On a positive note, our United States operations have new management and a new business plan to move us forward.
"We have set a course in a new strategic publishing direction which involves targeting both the state-based advertising market whilst maintaining our share of national advertising.
"The strategy is being implemented in this current quarter, Mr Fairfax told shareholders.
"Your Board visited our US operations during September and returned quietly confident that these operations are on the cusp of something better.
"We have re-launched our monthly state-wide titles and the new formats and editorial focus have been widely acclaimed, chairman disclosed.
In radio broadcasting, the Ipswich station improved marginally in a competitive market, whilst the South Australian stations maintained last year’s levels.
During the year, Rural Press continued its proud tradition of making acquisitions.
Its geographic footprint in Tasmania was extended when the company acquired an 85.3 per cent interest in Harris and Company Limited, publisher of The Advocate, Burnie and several smaller circulating free publications in North West Tasmania.
The purchase included a modern MAN Uniset Printing press, an automated publishing room and computer to plate technology, as well as a sheet fed printing business. Since January 2004, with new
Mr Fairfax declared, "We continue to look at new opportunities whether they be organic growth or acquisitions and we are in a good position to take advantage of new ideas and new ventures.
"We are also aware of the regard our company has in the community for its steady performance over many years.
"Our aim is to preserve what we have but also to be prepared for change and if necessary, adaptation.
"We shall continue to do this in a professional and disciplined way.
BACKGROUND **********
Rural Press Limited is a specialist agricultural and regional publisher that has as its hallmark, service to the communities its publications reach.
The company was listed on the Australian Stock Exchange on March 16,1989.
Its roots are deeply embedded in country Australia. The first publication - The Land - was launched in 1911 by a group of like-minded people who felt that farmers and graziers needed a strong advocate in the face of what was seen at the time as agriculture's diminishing political and economic influence.
Those reasons for the introduction of The Land more than 80 years ago - because as the first editorial pointedly stated - "it is needed" - hold firm today, and have been strongly embraced by the company and its employees.
Together, Rural Press' directors, management and staff are dedicated to striving tirelessly to enhance the economic, political and social well-being of rural and regional communities in every town, city, region, State and country in which the company is involved.
Rural Press believes its dedication to fostering rural and regional interests wherever the company operates has been and remains a worthwhile endeavour.
The company derives much of its revenue from country people and country-related industries.
It serves the people of regional and rural Australia through our publications and our printing sites.
In addition, looks after the rural people in New Zealand and the United States of America.
