Following a less than stellar first-quarter financial report, Singapore Press Holdings (SPH) announced on Tuesday (30 Mar) that it would be undergoing a strategic review to “consider options for its various businesses” as it faces a difficult operating environment.
In the announcement, made after trading ended for the day, SPH said that the goal of the review is to “unlock and maximise long-term shareholder value”, with the board of directors noting that the listed companies remain undervalued.
The group owns national news outlets such as The Straits Times and Lianhe Zaobao, among others both print and digital.
The review will have Credit Suisse (Singapore) as the financial advisor.
SPH operates in four segments, namely media, detail and commercial, purpose-built student accommodations, and others which include aged care, exhibitions, and investment in online classifieds.
SPH had just reported a 26.1 per cent growth in net profits for the first half of its financial year ending 28 February, compared to the same period last year. However, its media business dragged the group’s revenue down by 4.2 per cent, or S$460.3 million.
This decline, said the company, was partly offset by the higher rental income SPH earned (S$15.4 million) from its retail and commercial arm and purpose-built student accommodation.
Additionally, the S$15 million it received from the government’s Jobs Support Scheme wage subsidies helped as well.
SPH’s chief executive officer Ng Yat Chung said: “Despite expanding our audience reach, our media business continues to be affected by the structural decline in advertising and impact of COVID-19.
“We will continue our digital transformation strategy and efforts to place (our) media (business) on a more sustainable footing.”
August last year, SPH laid off 140 employees from its media sales and magazine operation as part of a restructuring, the third round of retrenchments in as many years.
SPH’s media business has taken a hit, with revenue dropping by 23.9 per cent to S$193.1 million in the same period, largely due to decreased advertising revenue and loss of revenue from Buzz, its convenience stall chain, which was sold last July.
The before-tax profit of the media business fell by a whopping 70.9 per cent to just S$3.1 million. This was cushioned by the JSS grants of S$12.8 million.
Otherwise, that segment would have reported a loss of S$9.7 million.
The print business is slowing down as well, with circulation revenue falling to S$3 million and with newspaper print average daily sales falling by 16 per cent.
However, the 20.2 per cent rise in digital newspaper sales makes up for it a little, with roughly 70,000 copies sold daily, on average.
In fact, the first half of its financial year saw digital newspaper sales making up more than half, or 53 per cent of the company’s total circulation, surpassing print.
In terms of its retail and commercial segment, revenue rose by 4.4 percent to S$154.6 million. The report noted that this is due to improving tenant sales for the retail sector as the country recovers from the impact of COVID-19.
Another growing segment is the purpose-built student accommodation, which saw a 14.2 per cent growth. This was attributed mainly to the Student Castle portfolio, comprising student lodging assets in the United Kingdom which SPH acquired back in December 2019.