SPH's digital push gains traction

Singapore

SINGAPORE Press Holdings' efforts to build up its digital media via new online and mobile offerings to tackle the "traumatic transition" facing the core traditional media business are bearing fruit, said chairman Lee Boon Yang.

SPH's total newspaper circulation for print and digital editions clicked higher by 1.7 per cent to an average of 1.07 million copies per day in the financial period ended August 2014 from a year ago.

"This was achieved by continuing to excel in print while strengthening and diversifying our presence in the digital space. Today, we are (also) a full-fledged digital media company," he said while pointing out that the digital numbers were aiding to offset the decline in print circulation.

Mr Lee was speaking to a packed room of more than 600 shareholders who attended SPH's annual general meeting on Tuesday, where he fielded many questions, most of which centred on the media and property group's game plan to fend off slipping revenue and profits in the newspaper business.

"The media business in nearly every country is undergoing a similar wrenching transition where the traditional print media is under attack by new digital technology," he told shareholders.

SPH's net profit for the financial year 2014 slipped 6.2 per cent to S$404.3 million from a year ago. Operating revenue fell 2 per cent to S$1.22 billion over the period largely on the back of weakness in the core newspaper and magazine business.

"We will continue to improve our digital edition to ensure that we have the basis to recover the loss of revenue and profit in traditional print. But of course, it will take time to monetise the model and extract full value," he said, while asking shareholders to remain patient.

Laying out the group's plan to keep pace with changing trends through revamps and better digital offerings by the newspapers under its stable, Mr Lee also outlined a string of recent investments aimed at getting the group back on the growth track.

An integral part involves growing the adjacent business - on the property front, this involved the listing of SPH Reit in 2013 while the group has also moved into education by ploughing investments into local pre-school operator MindChamps PreSchool (Worldwide).

"We are building an eco-system around media which over time we hope will put SPH back on the growth profile," he said.

Towards this end, the group has made some promising moves in the online classifieds realm, the most recent involving a tie-up with three foreign firms to develop online marketplaces in Indonesia and Thailand. SPH has also invested in startups such as San Francisco-based Smaato, a mobile ad exchange, and global digital magazine store and newsstand Magzter Inc.

Mr Lee was quick to temper shareholder expectation with a dose of realism: "Some investments may not succeed or pan out while others will pay off very well. Such is the nature of technology startups."

On the other hand, some investments are already in the black and contributing to the group's bottom line such as sgCarMart, which was acquired in April 2013, and Malaysia's biggest online marketplace Mudah.my.

To scour fresh opportunities to supplement group income, SPH has set up a S$100 million new media fund, the bulk of which have yet to be deployed.

"This is not a headlong rush. We are making careful and selective decisions in the digital area. With this new fund, we are prepared to take a higher level of risk and target a wider range of companies," he added.

In an announcement to the Singapore Exchange on Tuesday, SPH said it has appointed Janet Ang, an independent director, as a member of the audit committee.

The company also announced that Sum Soon Lim, who stepped down as SPH director at the AGM, and Chong Siak Ching will step down from the audit committee.

SPH shares closed one cent up to end the day at S$4.31.