SINGAPORE - Rather than relying on cost-cutting exercises to prosper, media group Singapore Press Holdings (SPH) has set its eyes on digitising its core business while seeking cash-yielding property investments in defensive sectors.
Chief executive Ng Yat Chung spoke to around 440 shareholders about the firm's business strategies at its annual general meeting on Monday (Dec 3) as well as its thinking behind recent acquisitions.
These are five strategies raised at the meeting on how to grow the business:
1) Driving revenue in digital media
SPH intends to arrest the decline in print advertising revenue, while looking into boosting turnover in digital media, said Mr Ng.
He noted that digital revenue has increased, adding that The Straits Times' e-paper readership has grown as well.
SPH chairman Lee Boon Yang added that SPH's core media business remains "very profitable" compared with other newspapers, generating $92.8 million pre-tax profits in the financial year ended Aug 31.
He added that management is trying to protect margins, revenue and profit through expansion in both digital and print.
2) Digitalisation to understand readers better
Some shareholders asked if SPH has looked into monetising its rich trove of readership data, such as by sending targeted advertisements to readers and subscribers, while others suggested growing the media business by distributing more content overseas.
"One of the main ideas behind our investments in digitalisation is precisely to help us understand the readers, what they read, how they read, so that we can deliver apps... We'll try to do it as quickly as we can," said Mr Ng.
He added that SPH is looking to improve and expand its coverage of the region, given that not many English-language papers in South-east Asia have the same standing as The Straits Times.
"These are opportunities that we are exploring," he said.
3) Buying in defensive sector
Mr Ng said SPH's $321 million purchase of student accommodation buildings in Britain in September was the result of a long deliberation.
The company wanted to buy in a sector that is defensive, he noted, meaning one that would yield a reasonable return when the economy goes down.
"Even after Brexit, to sustain their economy, we expect that education is one of those pillars the British would want to emphasise and grow," Mr Ng said.
One shareholder asked if SPH was late to the game with the purchase. Mr Ng replied that "the fact that others have gone in should give us comfort that it's a viable sector".
"In fact because of Brexit, there are deals to be done, people are willing to let go (of their assets), they want to exit," he added.
4) Growing aged care business beyond Singapore
Mr Ng noted that the market here is small and that SPH's leases here are not long so the company is looking beyond Singapore to grow its aged-care space.
SPH acquired private nursing home operator Orange Valley last year.
"Right now we are working with developers in neighbouring countries. We have the operating expertise, they have the land. We can develop not just nursing homes, but (also) retirement villages," he said.
While there are no retirement villages in Singapore yet, in Australia, for example, this is a mature market.
5) Taking a hard look at events business
Asked by another shareholder whether SPH's strategy has shifted from its previous emphasis on the events business as a growth area, Mr Ng said the company continues to grow the area but will not be "sentimental" about its businesses.
"We take a hard look at the returns," he noted. "The events space industry has changed. (Performance) for the events space, at least from the trade side, has not been as expected."