Robert Thomson, the CEO of News Corp, announcing full year results, called out the performance of the Australian operation.
In a briefing with analysts, Thompson said: “News Corp Australia under Michael Miller (executive chair) and his team increased its profit contribution by $109 million, its highest since separation, as digital subscribers to News Corp Australia properties rose by 12% to 964,000, and advertising revenues remain robust.”
Part of a global lift of News Corp's news media division, revenue in Australia increased 6% in the June quarter. The company pointed to higher content licensing revenue, cover price increases and digital subscriber growth.
Digital subscribers at News Corp Australia hit 964,000 (882,000 for news mastheads) at the end of June, compared to 859,000 (810,000 for news mastheads) in the prior year.
Ad revenue wasn't broken out for Australia but globally advertising revenues increased more than 8% to $479 million compared to the same quarter last year.
Globally, the company reported record revenue and profit. Fourth quarter revenue of $2.67 billion, a 7% increase, and ahead of analyst expectations.
For the full year to June, News Corp reported an 11% increase to a record $US10.39 billion in revenue, with strong growth in digital subscriptions and digital advertising. Net income was $760 million, a 95% lift from the $389 million of the prior year.
Thomson: “We again saw a very strong performance in advertising as well as continued growth in circulation and subscription revenues, which was driven by the contribution from our recent content licensing deals, higher digital subscriptions and cover prices.”
Globally, digital revenues continued to expand, increasing to 35% of segment revenues from 32%, primarily driven by the strength of digital advertising, expected to soon be the largest source of the news Media segment's advertising revenues.
Analysts were generally upbeat about News Corp’s results and prospects. News Corp shares rose almost 5% to $25.47.
A key message from News is that the global media group is now more dependent on recurring subscriptions and circulation based revenue, and less so on advertising.
Next year, News describes being “well positioned” and expects an improvement in top line revenue growth and continued digital gains across the company. However, this depends on “macro conditions” and the volatility of foreign currencies.
In the near term, the September quarter, News expects cost pressures from continued supply chain issues, rising prices and wage inflation.
CFO Susan Panuccio: “We will take necessary action to address those pressures, including pricing adjustments, together with our ongoing focus on cost management.
“Visibility on advertising remains limited across the businesses.”
Thomson spoke to analysts of a News Corp transformed, with reported revenue growing over the last eight years by $US1.8 billion, even though advertising revenue, print newspaper dependent as it was, declined by $2.2 billion. That is a $4 billion swing.
“It is certainly worth recognising that News Corp's profits have expanded prodigiously compared to eight years ago, rising from a reported $770 million in total segment EBITDA to nearly $1.7 billion this year,” he says.
“Our teams have made this successful journey despite the upheaval in the advertising market, despite the significant challenges to print media and despite the pandemic.
“We are more digital, more mobile, more global, acutely cost conscious and astutely tracking trends, in the quest for more revenues, increased profitability and enhanced returns for our investors.
“The News Corporation of nine years ago is not the News Corporation of now. The provenance and the principle endure, but the business is fundamentally transformed. It is vastly more profitable and with the potential for even greater growth.
“Our teams are rightly proud of the way they have influenced the digital landscape, changing the terms of trade for media businesses, bringing clarity to an opaque advertising market and increasing transparency to hit the two uncountable algorithms.
"The commercial changes are integral to our ongoing success, but the social consequences are also profound and enduring. Almost a decade after our reincarnation, thanks to the efforts of our employees and the faith of our investors, News Corp is set fair for the future."
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