Domain and Macquarie Media bright spots in otherwise gloomy Fairfax update

• Domain update disappoints as market listings and auction volumes drop

Fairfax Media today provided a trading update ahead of the expected formal commencement of the Fairfax/Nine merger scheme process and lodgement of the scheme booklet.

Nine and Fairfax are proposing to merge their businesses. Under the proposed merger, Nine shareholders will own 51.1% of the combined entity with Fairfax shareholders owning the remaining 48.9%.

The ACCC announced it would hold an informal review into the proposed merger back in August. It sought submissions from interested parties with a closing date of September 7. Those submissions are now being reviewed with the ACCC indicating it will announce a decision on the proposal around November 8 this year.

Fairfax Media Trading Update

FY19 year-to-date overall group revenues are 5% below last year.

Highlights of the different Fairfax Media reporting segments:

• Domain digital revenue is up 6% and total revenue is 1% lower
• Metro Media is down around 1%, with Metro publishing flat
• Australian Community Media is down around 10%
• Stuff (New Zealand Media) is down around 16% including currency impact (down around 15% in local currency NZ$)
• Macquarie Media is up around 3% (up 4% on a continuing business basis excluding the impact of disposals)

Fairfax Media also noted today in its update that it continues to implement cost-saving measures.

In a separate trading update to the ASX also released today, Domain reported:

Digital and print revenues have been impacted by lower new listings and auction volumes, particularly in Sydney and Melbourne. For the September quarter, Sydney market new listings were down 8% and auction volumes were down 22%. Melbourne market new listings were down 1% and auction volumes were down 18%.

Media revenues have been affected by restructuring of digital media sales to adopt a higher-margin fully programmatic offering.

Developer revenues have been affected by lower levels of new development projects, particularly in NSW.

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