Investor Alex Waislitz urges Fairfax to shut weekly print

Billionaire Alex Waislitz has urged Fairfax chief Greg Hywood to fast-track plans to shut weekday print editions.

Alex Waislitz says a transition to a more digital delivery should happen quickly.

Billionaire investor Alex Waislitz has called for Fairfax Media (FXJ) chief executive Greg Hywood to fast-track plans to shut weekday print editions of the publisher’s venerable mastheads, The Sydney Morning Herald and The Age in Melbourne.

Fairfax on Monday announced $1 billion in writedowns to its Australian Metro Media business, which also includes The Australian Financial Review and its rural and New Zealand newspapers. The company also said it would break out earnings numbers for its Domain Group real estate listings business, which was previously part of Australian Metro Media, at the company’s full-year result next week.

“The strategic steps just announced will hopefully pave the way for the move to full digital publication on weekdays — something which is in the best interests of the group and its shareholders in this digital age and is therefore something which should happen sooner rather than later and with as short a transition period as possible,” Mr Waislitz told The Australian.

Mr Hywood in May said the closure of the SMH and The Age on weekdays, and The AFR Weekend, was inevitable as digital alternatives ripped away audiences and revenues from traditional newspapers.

Mr Waislitz’s listed fund Thorney Opportunities and private fund Thorney Investment Group own more than 50 million Fairfax shares, or just over 2 per cent of the $2.3bn company.

The company’s decision to announce the $1bn writedown ahead of its result was interpreted by some observers as an attempt to focus the market’s attention on its earnings numbers when they are unveiled next week, rather than non-cash items.

The Domain announcement reignited speculation that the company would move to spin off the high-flying property business to unlock shareholder value.

“This is still a group with ­approximately $300 million in EBITDA (earnings before interest, tax, depreciation and amortisation) and Domain contributes a significant portion of that, so it makes sense to realign the business to enable for better transparency and valuation of Domain,” Mr Waislitz said.

However, Mr Hywood hosed down spin-off speculation on Monday.

“Domain makes a significant earnings contribution and remains an integral and growing part of Fairfax,” he said. “We have no plans for that to change.

“We continue to invest in Domain to make it stronger and extend its business model beyond listings to capture the immense opportunity in the broader real ­estate ecosystem.”

It appears Fairfax’s strategy involves divesting or winding down non-core assets so Domain and the company’s other digital assets contribute an increasing share of total earnings.

One example of this strategy has been Fairfax’s moves to merge its New Zealand operations into rival APN News & Media’s Kiwi group, NZME, as part of separately listed entity.

Fairfax is in a net-cash position and Mr Waislitz reiterated calls for the company to launch a share buyback, which he has previously said could be worth $100m.

“The balance sheet remains strong, which means the group should be able to at least maintain dividends, launch another share buyback or both,’’ he said.

Fairfax shares closed yesterday at $1.01, or 3.8 per cent lower since Monday’s announcement.