SPH to continue transforming media business while growing income from property

One of SPH's strategies moving forward is to grow income from its property segment, said CEO Ng Yat Chung on Nov 27, 2020. PHOTO: ST FILE

SINGAPORE - Singapore Press Holdings (SPH) will continue to invest in transforming the media business to keep up with changing consumer habits, especially with the coronavirus pandemic's impact on the business.

Its property segments such as purpose-built student accommodation (PBSA) and retail were also identified as an area for growing recurring income, said SPH chief executive Ng Yat Chung during the company's annual general meeting on Friday (Nov 27).

He told a virtual audience: "SPH is facing a challenging media landscape. We have not been spared from rapid changes disrupting the news media industry everywhere. Consumer habits are changing, and they are increasingly moving to digital media.

"As a result, our media business faced a steady decline in both print advertising and print subscription revenue. And these are traditionally our largest revenue and profit drivers. The Covid-19 pandemic this year has further exacerbated these challenges."

SPH had earlier reported its first ever net loss of $83.7 million for the year that ended on Aug 31, reversing the net profit of $213.2 million a year ago.

One of the strategies moving forward is to grow income from its property segment, Mr Ng said.

He noted in response to shareholder questions that about 60 per cent of the total units at Woodleigh Residences, a development by SPH and Kajima, have been sold as at Nov 20.

SPH is also on track to become a sizeable owner-operator of purpose-built student accommodation, he said, with 7,723 beds across 28 assets in the United Kingdom and Germany worth over $1.4 billion.

"Many shareholders have asked about the SPH plan to list our PBSA assets. We are always considering and looking out for opportunities to improve shareholder value. The listing of our PBSA is a possibility. But an announcement will be issued by the company only in the event there is a material development on the matter," he said.

Mr Ng added that the firm also aims to improve its financial performance, dividend payout and share price.

Last Friday, SPH shares shot up some 19 per cent to $1.25, prompting a query from the Singapore bourse.

SPH had replied then that it regularly evaluates all opportunities across its portfolio, which may from time to time involve discussions with various parties and stakeholders. It added that there is no assurance that any transaction will materialise or that any definitive or binding agreement will be reached. It will make further announcements as appropriate, in compliance with listing rules.

Besides property, Mr Ng said the firm will continue its media transformation efforts.

He said: "This involves investing in technological capabilities to rejuvenate, reinvent and re-position our product offerings."

He noted that efforts have translated to growth in digital circulation, as well as digital advertising revenue over the last few years, even as the firm continues to try to stem the decline in print.

It has also improved its data analytics, such as building a model to identify and serve promotions to readers who are most likely to subscribe, leading to a conversion rate that is three times higher than before.

It also made progress in estimating the expected revenue for each subscriber, which will guide the development of new products and optimise customer acquisition costs.

SPH CEO Ng Yat Chung (left) and chairman Lee Boon Yang speaking at the AGM on Nov 27, 2020. PHOTO: LIANHE ZAOBAO

Video analytics, such as tracking algorithms, also help to examine the traffic in front of outdoor advertising screens so campaigns can be better designed for advertiser returns.

Other transformation initiatives include The Straits Times' revamp to make it a better experience for readers, he added.

The next development will be to deliver News Tablets, similar to The Straits Times', for the magazines as well.

Chairman Lee Boon Yang said: "SPH is prepared for a lengthy recovery from Covid-19. The priority is to conserve cash through an effective cost control programme while adopting a disciplined and prudent approach to capital allocation. Our resilient balance sheet will help the group buffer against the long-term uncertainty."

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