By Mike Archer. Glacier Media Inc, the company which purchased BC newspaper properties in the lower Mainland from Postmedia last year, is reporting its consolidated revenue increased 23.4% in 2012. In the March 28 report a total of $330.0 million in consolidated revenue was achieved in 2012, up from $267.4 million for year prior.
According to the year-end results posted on 4traders.com Thursday, consolidated cash flow from operations was down to $44.3 million from $44.9 million for 2011.
$15.7 million of senior debt was repaid and, “Subsequent to year-end the Company increased its annual dividend 33% to $0.08 per share, payable quarterly.”
The year-end report also shows that community media revenues were affected by weaker economic conditions including less national advertising revenue.
According to the report, “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 Northern Interior markets.”In February Norman Rothery of the Globe and Mail reported that Glacier was a media stock worth buying because in his words, ” the value seems right.”
“Glacier Media’s stock has basically been given up for dead. It keeled over from just over $4 per share in the spring of 2008 and hit the floor just below $1.50 per share a year later. Since then it staggered up a bit and was recently spotted at $1.85 per share. Many days, there are fewer than half a dozen trades in the stock.”
“To be sure, there is risk. The company’s strategy of buying media properties – mostly community newspapers – and betting it can turn them around is far from an assured success. But it’s encouraging to note that management has a big stake in the firm’s future. Its CEO is a principal of Madison Venture Corp., which owns 34 per cent of Glacier Media.”
[excerpt] Review of Operations
Consolidated revenue grew 23.4% during the year ended 2012 compared to last year as a result of organic growth in a variety of operations, the November 2011 acquisition of the Postmedia British Columbia community media assets, and the acquisition of control of one of Glacier’s community media partnerships in April 2012. Consolidated EBITDA increased $1.3 million or 2.5% for the year.[excerpt] Meanwhile, community media same-store revenues and EBITDA were affected by weaker economic conditions which included softness in national advertising. Increased digital competition has also affected revenues, more so in the urban markets. Consolidated EBITDA was also impacted by operating investments made to strengthen some of the community media properties acquired from Postmedia as well as investments made in a new digital real estate information business.
Overall, revenues, profitability and cash flows remained strong.[excerpt] Community Media
Glacier’s community media operations experienced weaker revenue performance in a number of markets, primarily the result of softer national advertising. 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 Northern Interior markets. National advertising revenues were weaker in most markets, which appear to be the result of cautiousness due to prevailing economic conditions, as financial and government revenues have been significantly lower. Digital competition also affected national print spending levels, although this trend primarily affected larger urban markets. Local advertising revenues were 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 expense investments are being made to improve the strength and resources of the community media assets acquired from Postmedia in order to increase competitiveness and sales effectiveness. The operations had been weakened by significant cost cutting – including sales capacity – incurred over many years under previous ownership due to high debt levels. Operating investments have been partially offset by savings in overhead costs as a result of operational alignments with Glacier’s existing infrastructure. While it will take time to strengthen and revitalize operations, it is encouraging that direct revenue increases are being realized as investments are made. Digital investments are also being made to exploit revenue opportunities of the larger markets, with a specific focus on content delivery and advertising effectiveness.