The $173.5 million acquisition of a 50 per cent stake in Hoyts Cinemas, a step outside West Australian News-papers’ traditional comfort zone and the development of its online services, is costing the company.
Such is the nature of Internet-based developments that WA Newspapers’ online services posted an $800,000 loss this year, following a $700,000 loss the previous year.
Hoyts, bought from Consolidated Press with partner Publishing and Broadcasting earlier this year, returned a “disappointing” $1.4 million profit for the six months to June 2005.
The Hoyts group has three operating divisions, the largest being the exhibition division, which controls or has interests in 55 cinemas and 431 screens in WA, SA, Victoria, NSW, Queensland and New Zealand.
It was this division that failed to perform following an 8 per cent fall in movie admissions.
WA Newspapers puts this down to a lack of quality blockbuster releases in the January to May period this year.
The other two divisions – Hoyts Distribution, the largest independent or non-film studio distributor in Australasia, and Val Morgan Cinema Advertising – are both showing good growth.
However, things are looking up for the exhibition division. The company expects better big movies from July to December this year will significantly boost admissions. There will also be a full year’s results from new cinema complexes in Melbourne and Richmond in Victoria, Salisbury in SA and Blacktown in NSW.
WA Newspapers’ online development plan included the launch of its employment portal, thewestcareers.com.au, earlier this year, which now lists more than 2,000 positions across the state each week.
The online strategy is to add value to the advertising in the company’s newspapers by lifting all advertisements in print to the online site and target additional revenue with online specific advertisements.
Near-future plans are to list all employment advertising from the company’s 19 regional newspapers and developing similar sites for real estate and motor vehicles.
The West Australian, South Western Times and Countryman are also available for subscription online.
