Yahoo Finance Postmedia's acquisition of Brunswick News boosts revenue
Postmedia Network Canada Corp.’s acquisition of the East Coast newspaper chain Brunswick News Inc. in March helped boost year-over-year revenue in the fourth quarter by 8.7 per cent to $117 million, the company said Friday.
Postmedia, which owns the National Post, the Financial Post and more than 120 media properties across Canada, earned $28.3 million in digital revenue in the three months that ended on Aug. 31, up from $27.5 million during the same period last year.
Excluding the impact of the Brunswick acquisition, overall revenue fell 5.1 per cent to $102.2 million due to lower print circulation and advertising revenue, reflecting the ongoing structural shift to digital readership from the printed word. At the same time, inflation surged to the fastest in four decades, prompting central banks to hike interest rates. Forecasters on Bay Street and Wall Street are now predicting a recession, betting the sharp rise in borrowing costs and higher prices will crush demand heading into 2023.
“As with our industry peers and all Canadian businesses we are operating in a challenging environment exacerbated by recessionary headwinds,” Andrew MacLeod, chief executive of Postmedia, said in a press release.
“We are managing proactively to meet the challenges ahead and taking the opportunity to accelerate our transformation to digital and growth in our parcel business.”
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Postmedia said its focus in the current fiscal year, which began Sept. 1, will be on digital advertising, digital subscriptions and its parcel delivery business.
On March 25, Postmedia acquired Brunswick News from J. D. Irving Ltd., which included daily and weekly newspapers, digital properties and a parcel delivery business. The agreement, which extended Postmedia’s reach into New Brunswick, involved a “cash consideration” of $7.5 million and an exchange of shares that pushed the overall value of the transaction to $7.6 million.
Postmedia said it posted a higher quarterly net loss of $31.4 million, up from $28.6 million last year, mainly due to increases in “impairment and restructuring expenses.”
Operating expenses increased by $8.7 million, or 8.1 per cent, for the quarter, compared to the same period a year ago. Excluding the impact of the Brunswick acquisition, expenses decreased by $8.1 million or 7.5 per cent.
Revenue for the year ending Aug. 31 was $458.2 million, a 3.6 per cent increase over last year. Excluding Brunswick News, revenue was $432 million, a 2.3-per-cent drop from the previous fiscal year.
Postmedia attributed the decline primarily to an 11-per-cent drop in print circulation revenue and a 5.5-per-cent fall in print advertising revenue. Those losses were partially offset by growing digital revenue, which increased 13.9 per cent to $14.3 million.
The net loss for the year was $74.7 million, compared to net earnings of $33.7 million a year ago.
