Shares in Fairfax Media have gained as much as nine per cent after its executives reassured shareholders a strategic review would help the troubled media company ride out tough trading conditions.
Chairman Roger Corbett told shareholders at the Fairfax annual general meeting on Wednesday all options were being considered by the company.
And chief executive Greg Hywood said there were signs of an improvement in revenues, although they remained lower than they were over the same period last year.
Fairfax shares last week hit a record low of 36 cents, but on Wednesday gained as much as 3.5 cents, or nine per cent.
At 1148 AEDT they were up 1.75 cents, or 4.6 per cent, at 39.75 cents.
Mr Corbett said the board was acutely aware of anxiety caused by the slide in Fairfax shares.
But he said the company’s strategic review, which included cutting 1,900 jobs and the closure of its major metropolitan printing presses, would help it ride out tough trading conditions.
“However, let there be no doubt, we will continue to examine all alternatives to optimise shareholder value, and we rule nothing out,” he said.
“We remain opportunistic and flexible with respect to value-enhancing transactions.”
The restructure was expected to reap annual savings of more than $235 million, Mr Corbett said.
He also echoed comments made on Tuesday by Mr Hywood about Fairfax having walked away from ideas like breaking up the company through asset sales and a demerger of the Metro Media business, saying it was the wrong time for such changes.
Fairfax has suffered a disastrous year in which it reported a $2.73 billion loss for 2011/12 as a result of massive value writedowns on its newspaper mastheads.
Mr Corbett said there could be more impairment charges on the way, but added that some that were expected could also end up being reversed.
Mr Hywood said revenues for the first six weeks of the 2012/13 financial year were 10 per cent lower than the previous corresponding period.
But revenue had improved in September and October, down 7.5 per cent from the corresponding weeks in the previous financial year.
“It is impossible to make projections from here, but we will keep the market informed as the year unfolds,” he said.
Mr Hywood said Fairfax had a clear strategy to negotiate its way through a “perfect storm of cyclical weakness and structural change”.
“Let’s not kid ourselves,” he said.
“There are challenges ahead.”
But he said Fairfax would not “hide behind a cloak of denial” nor be too sentimental about the company’s past when it came to transforming its operations to embrace digital media.
He said print editions of newspapers, including The Sydney Morning Herald and The Age, would continue “as long as there is profitable demand for them”.
Meanwhile, 81 per cent of shareholder proxy votes received before the meeting were in support of Fairfax’s remuneration report.
The Australian Shareholders’ Association (ASA) has planned to vote against the report, arguing the board had “presided over substantial destruction of shareholder value”, so directors’ fees should be cut.
