Media group Singapore Press Holdings (SPH) has set its sights on digitising its core media business and growing abroad, while also seeking cash-yielding property investments in defensive sectors, rather than just relying on cost-cutting exercises as part of its strategy going forward.
Chief executive Ng Yat Chung spoke to around 440 shareholders about the firm's business strategies at its annual general meeting on Monday as well as its thinking behind recent acquisitions.
Several speakers had posed questions on the group's strategies to keep growing its media and other businesses, prompting him and SPH chairman Lee Boon Yang to take the opportunity to set out the thinking behind some of SPH's recent moves.
Among the strategies spelt out were:
DRIVING REVENUE IN DIGITAL MEDIA
SPH aims 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.
ST's overall readership for its print and digital products has been growing in recent years.
Dr Lee said 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 in the face of the disruption that has hit the media industry worldwide, SPH management is working to protect margins, revenue and profit through expansion in both digital and print, both at home and abroad.
DIGITALISATION TO SERVE READERS BETTER
Some shareholders asked if SPH had 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 boost its coverage of the region, given ST's credibility and reputation for its Asian coverage.
"These are opportunities that we are exploring," he said.
BUYING IN NEW SECTOR
Mr Ng said SPH's $321 million purchase of student accommodation buildings in Britain in September was the result of long deliberation.
The company wanted to buy in a sector that is defensive, he noted, meaning one that would yield a reasonable return even 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.
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.
RETHINKING 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.
"The events space industry has changed. (Performance) for the events space, at least from the trade side, has not been as expected," he said, adding that the management takes "a hard look at the returns".
