Transcontinental in the black for third straight quarter
In its first quarter fiscal report, the company attributed growth to the expansion of advertising options through its digital portfolio and an increase in magazine-related web and mobile revenue.
After suffering some losses during the same period in 2009, mediaco Transcontinental bounced back with a 41% growth spurt in adjusted operating income during the first quarter of 2010 – this despite an 11% downturn in revenue from $625.4 million to $559.3 million for the period ending January 31, 2010.
While the revenue decrease was largely blamed on a poor exchange rate, the closure of plants, publications and unfavourable paper price, Transcontinental said rationalization measures implemented to weather the recession resulted in a rise of adjusted operating income from $58.3 million to $82.4 million.
Transcon is bullish about its future on a number of fronts, declaring that the development of its digital platforms is going ahead as planned and magazine revenues tied to mobile and web have registered a 30% increase in 2010.
The company attributed much of its first-quarter success to the growth of its digital portfolio, a strategy meant to increase advertising options for its customers. In line with this strategy, two new websites are being launched this month, including Dealstreet.ca (the French-language equivalent Pulisac.ca is already operational) and the business search site Weblocal.ca.
Full conversion of Canadian Transcontinental printing plants to hybrid newspaper and flyer manufacturers is also expected to be up and running by late 2010, with an 18-year, $1.7 billion contract with the Globe and Mail kicking in early in fiscal 2011.
The report also listed a 68% growth curve in net income applicable to participating shares, with a gain of $26.2 million net income comparable with a $6.4 million loss a year earlier.
The double-digit income growth allowed Transcon to pay back a $150 million loan in the first quarter, and declare a quarterly dividend increase of 12.5% to $.09 per participating share.
Pending regulatory approval of a sale of the Direct Mail Group to Minnesota-based IWCO Direct that’s expected to close during the second quarter of 2010, Transcontinental will be adding net proceeds of more than $100 million (US) to its coffers.
‘Transcontinental is now a more flexible organization, and one that is even more focused on its strategic assets and priorities,’ Transcontinental president and CEO François Olivier said in a statement, adding that the company intends to take full advantage of any opportunities that arise in their marketplace.
Transcontinental provides printing, publishing and marketing services and is the fourth largest printer in North America, with plants in Canada, the US and Mexico.