News Corp reports: Sports rights, print ad revenue, Foxtel subs

News Corp: Full year revenues up 1%, EBITDA up 11% after “busy 12 months”

News Corporation today reported financial results for the three months and fiscal year ended June 30, 2015.

Commenting on the results, chief executive Robert Thomson (pictured) said:

“Thanks to solid performance across a number of our businesses, including the fast-growing realtor.com, we had a strong fourth quarter finish to a good fiscal year. Despite an uneven global economy, very tough currency headwinds and the ongoing transformation of the media landscape, for fiscal 2015 we posted stable revenues, robust EBITDA growth and healthy free cash flow.

“With disciplined internal investments, strategic acquisitions and ongoing product innovation, we have aggressively shifted the company to be more global and more digital. We have clearly emerged as an international leader in digital real estate, opened up new territories at HarperCollins, expanded digital subscriber penetration at our mastheads and successfully integrated our programmatic exchange, creating new digital and mobile advertising opportunities across News Corp.

“We have begun to execute on a capital return program that signifies our confidence in the prospects of the company and the efficacy of its long-term strategy. The year ahead will be an opportunity to build on the sound and profitable platform we have collectively created.”

Speaking on the earnings call this morning from Sydney, Thomson noted this marks the second anniversary of the new News Corp, with the company financially stronger and better positioned for the future.

Thomson also discussed the continuing investment in digital. International success included growth at The Wall Street Journal and The Times, while the company admitted it was facing challenges at The Sun in London.

Foxtel continues to report subscriber growth with the numbers up 9% year-on-year to around 2.8m. Foxtel revenue was up 2% YOY, but EBITDA was down 16% partly because of increased costs for sports rights.

When Thomson was asked about this week’s Nine deal for NRL rights, he commented: “Football rights is a contact sport in itself. We are currently at about half time [in the NRL negotiations].” He didn’t comment further apart from adding, “I am an AFL tragic, and the result I am focused on is an Essendon victory on Saturday.”

There was little commentary about Australian newspapers, except a note that ad revenues were down 8% YOY with particular weakness from the retail and auto categories.

•  Full Year Results

News Corp reported fiscal 2015 full year total revenues of $8.63 billion, a 1% increase as compared to the prior year revenues of $8.57 billion. The increase reflects growth in the book publishing and digital real estate services segments, primarily as a result of the acquisitions of Harlequin Enterprises Limited and Move, respectively, which was partially offset by adverse foreign currency fluctuations and lower advertising revenues at the News and Information Services segment. Adjusted revenues were 1% lower than the prior year.

The company reported full year total segment EBITDA of $852 million, an 11% increase as compared to $770 million in the prior year. These results include $50 million in fees and costs in fiscal 2015 and $72 million in fiscal 2014 – net of indemnification – related to the UK newspaper matters. The improvement was driven by increased revenues in the book publishing segment due to the inclusion of Harlequin results and lower expenses, mainly due to the increased capitalisation of software development costs, at the digital education segment; partially offset by adverse foreign currency fluctuations, declines at the news and information services segment, which includes higher legal costs at News America Marketing, and stock-based compensation expense in connection to the acquisition of Move.

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