FP Canadian Newspapers sees revenue decline 10.5%

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This article was published 07/05/2009 (5965 days ago), so information in it may no longer be current.

REVENUE at the company that owns the Winnipeg Free Press, the Brandon Sun and Winnipeg community newspapers declined by 10.5 per cent for the first three months of the year compared with last year.

Total sales for FP Canadian Newspapers Limited Partnership (FPLP) were $26.8 million for the quarter, with advertising revenue of $18 million, off by 13.1 per cent.

Reduced advertising spending because of the global economic slump, along with increased use of the Internet and other free media, is causing havoc in the newspaper business.

Ron Stern, chairman of FP Newspapers Income Fund, the publicly traded entity that owns 49 per cent of FPLP, said the strength of the Manitoba economy relative to the rest of the country meant FPLP declines are not quite as severe as other newspaper company results these days.

For instance, Canwest publications experienced a 16 per cent decline in revenues for its most recent reporting period.

But Stern took little solace in that.

At FP Newspapers Income Fund’s annual general meeting Wednesday, he said, “We are all very aware of the substantial challenges affecting the newspaper business…. No one can say with any certainty what the outcomes will be. But we have a great franchise and great loyalties with which to build on that franchise.”

The Free Press continues to be the most-read paper in the country, according to the 2008 Newspaper Audience Databank (NADbank) with a weekday readership of 42 per cent of Winnipeggers.

Stern said cost-cutting measures have been taken and the company continues to be engaged in an ongoing effort to reduce costs.

“We are looking at how to do things more efficiently,” said Stern. “We are taking steps to get distribution more efficient, for instance looking to see if we can use fewer trucks if we can avoid duplication.”

In the last year, the company reduced its workforce by the equivalent of 55 full-time positions, a 10.6 per cent decrease, which will reduce annual compensation costs by about $3 million annually.

Stern was noncommittal about whether there would be any more layoffs.

“We will be looking at it on an on-going basis,” he said. “We are looking to maximize efficiency. We will try to do that in a fair and balanced manner.”

While many other media companies in North America are running up against loan covenant ratios, Stern said even if the company suffers similar quarterly declines in revenue for the rest of the year, the expectation is that it will remain safely within the limits of its debt to EBITDA (earnings before interest, taxes, depreciation and amortization) ratios.

Although page views at winnipegfreepress.com cracked the 10 million mark in March, online revenue for FPLP is still less than two per cent of the total.

Total revenue for the company in 2008 was $121.1 million.

During the last quarter, the company launched an online paid subscription archive service. A new on-line subscription model is also being rolled out and the company is launching a new Homes website to go along with an Autos website.

FP Newspapers Income Fund units were down 16 cents ot $4.12.