While Postmedia’s revenues have clearly been bolstered by the Brunswick News acquisition, its Q4 and full-year financial results show that trends that have dogged print media for years continue to impact the company’s revenue.
Revenue for the quarter for the three months ended Aug. 31 increased by 8.7% year-over-year, though when excluding the impact of the BNI acquisition, revenue declined 5.1%. For the full fiscal year, revenue increased by 3.6%, though declined by 2.3% when excluding BNI.
Postmedia cited familiar culprits for the decline: dips in both print advertising and circulation, which were only partially offset by growth in digital ads.
Revenue from print advertising increased by 6.3% in Q4 and 1.4% for the full year; when excluding BNI, revenues were down 3.3% in the quarter and 5.5% in the fiscal year. In addition to the shift in ad spending away from print, Postmedia said added economic uncertainty also contributed to the declines, expecting current year trends to continue.
Print circulation revenue decreased by 5.6% in Q4 and 8.4%, in the fiscal year; excluding the impact of BNI, circulation revenues decreased 11.6% for the quarter and 11.0% for the year. Postmedia cited increases in print prices not being enough to offset declines in circulation volumes, another trend it expects to continue into the 2023 fiscal year.
Despite the decline, circulation is now a greater source of revenue for Postmedia than print advertising, with digital revenue continuing to close the gap.
Digital revenue at Postmedia increased by 2.9% in Q4 and 16.1% for the full year; excluding the impact of the BNI acquisition, digital revenues actually decreased by 4.8% in Q4, though still ended the year up 13.9%. Postmedia says this is due to decreases in digital advertising spending in the most recent quarter, as major advertisers take a more disciplined approach to spending amid a looming recession. It was, however, offset in digital spending increases throughout the rest of the year, as well in increases from branded content services and digital subscriptions.
Postmedia said digital revenue continues to be a future growth opportunity, and is focused on products and initiatives in this area, including marketing services.
The company also said it would continue to explore cost reduction initiatives to help it address declining revenues in some of its segments. Operating expenses were up 9.9% for the fiscal year, though much of that was related to the BNI acquisition; excluding that, expenses were up 2.7%. Postmedia said that this was due to a reduction in compensation expenses due to a reduction in CEWS benefits from the government, as well as increased digital production costs, offsetting its cost reduction plans.
