Home > Industry stuff > Glacier makes $6 million in Q2 2012

Glacier makes $6 million in Q2 2012

August 20, 2012

Glacier Media reported income of $6 million in the second quarter of 2012, according to its latest quarterly financial statement. That’s down from $7.9 million during the same quarter of last year. Revenue, meanwhile, increased 27.4 per cent over last year to $91.4 million.

The report is positive about the future:

Overall the combination of consolidated revenue growth, mix of businesses, level of performance of the Company’s business units, and additional cost efficiencies are expected to result in continued growth in revenue, profitability and cash flow per share in 2012.

The report goes on to blame a poor economy for slumping revenues among B.C. papers. Glacier also blames Postmedia’s cost-cutting for hurting the Lower Mainland and Vancouver Island papers it bought last year.

Here’s the most community newspaper-centric part of the report. I’ve bolded points of particular interest.

Glacier’s community media operations incurred softer revenue performance in some markets during the quarter.  The Prairie operations continued to generate strong revenue and profitability.   The B.C. markets were affected by weaker economic conditions in Victoria, the Lower Mainland and a variety of Vancouver Island and Interior markets.  National advertising revenues were weaker in most markets, which appears to be the result of cautiousness due to economic conditions, as financial and government revenues have been significantly lower, although digital competition is also affecting print spending levels.  Local advertising revenues were more resilient in both the existing markets where Glacier has operated, and some of the Lower Mainland and Vancouver Island markets acquired from Postmedia, although the Victoria market continues to struggle.

Operating resource investments are being made to improve the strength of the community media assets acquired in order to increase competitiveness and sales effectiveness.  The operations had been weakened by significant cost cutting incurred over many years under previous ownership due to the high debt levels of these owners.  The costs of the operating investments have been partially offset by savings in overhead costs as a result of the integration of the operations with Glacier’s existing infrastructure.  The operating investments resulted in stronger local advertising sales and classified sales in the second quarter.  While it will take time to strengthen and revitalize the operations, it is encouraging that direct revenue increases are being realized as investments are being made.  Digital investments are also being made to exploit the digital revenue opportunities of the larger markets in which the community media operations acquired are located.

While economic and market challenges have affected the community media operations, management believes that these businesses remain strong and will continue to generate solid cash flow given the nature of the markets in which Glacier operates and the nature of local community media.  This cash flow can be used to fund growth through both internal investment and acquisition of digital business information and digital community media assets, as well as repayment of debt, payment of dividends and repurchase of shares.

Glacier’s small market community media operations offer a unique selling proposition and competitive advantage through the local information that they provide, of which they are a primary source, and the primary marketing channel they offer to advertisers. The value of Glacier’s local community content is being provided to Glacier’s readers in print and online, by tablet and mobile smartphone platforms.  A number of new digital sales products and strategies have been introduced, and new digital sales and product staff are being hired and technology investments are being made to drive these growth initiatives. Given that the demand for local community information is expected to exist for the long term, Glacier expects to be able to monetize the information and marketing value through
advertising and other revenue sources for the long term.  As 85% of Glacier’s local newspaper distribution is free, this also provides for a more durable reach of readership for advertisers over time wherein total market coverage can always be provided.  The attributes of these community media operations are significantly different and stronger than larger metropolitan paid daily newspapers, which has been reflected in the financial performance of Glacier’s community media group.

Remember, of course, that such reports are intended to make a company look like a good investment for shareholders.

  1. JR Ewing
    August 21, 2012 at 7:28 am

    “Operating resource investment…”
    Meanwhile, David Black chases his oil baron dreams as relentless cutbacks at his papers deplete resources across the board and plummet morale to new depths. A redesign of their websites is moving at a glacial pace, and a tablet app doesn’t appear to be anywhere on the horizon.

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