Subject: Quarterly Update
Today we announced our company’s financial results for the first quarter of our 2014 fiscal year – September 2013 to November 2013. You can view the full details of the quarterly results at Postmedia Link or www.postmedia.com.
Revenue for the quarter totaled $194.0 million, a decrease of 8.4% compared to the same period in the previous year. The decrease was primarily due to a decline in print advertising revenue which was down 12.2%. Declines occurred across all categories. The largest contributor to revenue declines in the first quarter was classified print advertising which was down 24%. The automotive segment was the most significant challenge in our first quarter, accounting for almost half the print advertising revenue decline.
Our print circulation strategy is gaining traction with an increase in print circulation revenue this quarter. While it’s a slight increase of 0.6% relative to the same period in the prior year we do expect print circulation revenue to remain stable for the remainder of our 2014 fiscal year.
Digital revenue decreased this quarter by 5.1% relative to the same period in the prior year as a result of declines in local digital advertising revenue and digital classified revenue. The declines were partially offset by increases in digital circulation revenue. To date, more than 135,000 people have signed up for access to their favourite Postmedia newspaper’s online content.
We saw continued progress on our transformation program this quarter, implementing initiatives that are expected to result in an additional $5 million of net annualized cost savings. So far the program has resulted in cost savings of approximately $87 million, or 12.5% of operating costs since the program was announced.
We often talk about where we have been. And we also talk about the big vision of where we want to be. But what are the next first steps for Postmedia? What can we do – right now to move us ahead to the future we envision? Because we all know the challenges we face in this industry.[node:ad]
Our next first steps must include an openness to greater collaboration and to developing new products and new partnerships, while at the same time continuing to refine the elements of our legacy cost structure.
The next first steps include the planned launch of an entirely redesigned product set for eight of our local brands. Our four platforms all reimagined and tailored to our audiences and our advertisers in ways that were simply unimaginable even five years ago. You’re going to begin hearing a lot more about that.
The content we create and the experiences we provide represent our competitive advantage. We know that if someone has the choice to get something for free or to pay for it – they’ll choose free. And if no one else will pay for it, why should we?
Whatever it is that our audiences value most – we’ll value most too. Our product development initiatives are impacted and influenced by our growing depth of knowledge about our audiences and how they break down in various segments. And these are the very insights into our audiences that marketers and advertisers crave.
We’re going where our audiences and advertisers want us to go. And we’re giving them something they can’t get elsewhere…that’s the next first step. And we’re really, really close.
Thank you to those working diligently to set the course for our next first steps and to everyone, across the company, dedicated to our success – each and every day.