SPH to weather Covid-19 crisis, benefit from investment in data collection

SINGAPORE (THE BUSINESS TIMES) - Singapore Press Holdings (SPH) said in a business update on Tuesday (May 19) that its "resilient finances" will withstand the impact of Covid-19.

The media and property group said it has a strong balance sheet with a healthy cash buffer of more than $800 million. It has also improved gearing ratios with cost management, and has no loans due till June 2021, said SPH, which publishes The Straits Times and The Business Times.

It also has a "disciplined approach to capital allocation", with regular reviews of non-core businesses and investments.

Meanwhile, its businesses in the media, purpose-built student accommodation (PBSA) and retail segments are "well-placed" despite the virus outbreak, it said.

Its media segment's digital subscriptions through news tablets grew 8 per cent in April month on month. It has also partnered Google to grow digital advertising revenue and subscriptions.

Its refunds of £4.6 million (S$8 million) from its PBSA business was at the lower end of the expected range, and it has achieved 69 per cent of the next academic year's (AY2020/2021) target revenue. Furthermore, the universities in the United Kingdom are to gradually reopen as lockdown restrictions ease.

On the retail front, the initial decline in footfall for its assets in Australia is slowing with the gradual lifting of lockdown measures.

SPH also said that first-party data, which is data it collects directly, is important for the firm to deliver an "enjoyable digital experience" and "make relevant content recommendations" that will translate to higher reader engagement.

While the firm also engages the services of vendors who collect third-party data by embedding their cookies in their clients' websites (including SPH's), more browsers are blocking third-party cookies on the back of privacy issues.

In the light of this, SPH said it has been investing in its own data collection, processing and activation capabilities in the last few years. It therefore stands to benefit when advertisers that lose access to third-party data turn to publishers with first-party data, it added.

Separately on Tuesday, SPH said that two of its subsidiaries have each applied to be placed under judicial management.

The subsidiaries are info-tech firms StreetSine Technology Group and StreetSine Singapore, which have also applied for interim judicial managers to be appointed pending the determination of their applications. A pre-trial conference has been fixed for June 4; the hearing date has yet to be fixed.

SPH's wholly owned subsidiary, SPH Interactive, holds 60 per cent of the shares of StreetSine Technology; the remaining shares are held by Mr Samuel Cranage Baker and Mr Jeremy Lee Chuen Yang, who each hold 20 per cent.

StreetSine Singapore is wholly owned by StreetSine Technology. It is in the business of integrating big data sets with mobile applications to provide property information and transaction tools for the real estate market.

On April 7, the board announced legal proceedings commenced by Mr Baker and Mr Lee against SPH Interactive and SPH in relation to StreetSine Technology.

But SPH said that the combined net tangible liabilities and the combined revenue and pre-tax losses of the two subsidiaries, compared with SPH Group's net tangible assets and consolidated revenue and pre-tax profits respectively, are in each case less than 1 per cent. This is based on the audited consolidated financial statements of the SPH Group for the financial year ended Aug 31, 2019.

StreetSine Technology and StreetSine Singapore are therefore not significant subsidiaries of SPH and the judicial management applications will not have a material impact on the company's operations for the current financial year ending Aug 31, 2020, said SPH.

SPH will keep shareholders informed of the progress of the matter and will make further announcements as appropriate.