By Gavin Lower
MELBOURNE--A Fairfax Media Ltd. (FXJ.AU) investor said Thursday
investors and bankers were unlikely to be too concerned if the
company's board chose to write down the value of its mastheads.
The Australian newspaper reported earlier Thursday Fairfax's
board was considering a further writedown to the value of its
newspaper mastheads, without saying where it got the
information.
A spokeswoman for Fairfax declined to comment.
"It probably would not be a shock to anyone given newspaper
circulation is declining," Sean Fenton, portfolio manager at
Tribecca Investment Partners, said about the report.
"I don't think the board would be doing anything other than
recognizing what the market's done," Mr. Fenton said.
Fairfax's share price has fallen 21% in 2012 and touched an
all-time low of 56.5 Australian cents on June 6.
Last August, Fairfax wrote down the value of its mastheads,
customer relationships and goodwill by 650.7 million Australian
dollars (US$647.8 million) after tax.
Mr. Fenton said cash flows at Fairfax were what mattered most to
investors.
Fairfax publishes The Age, The Sydney Morning Herald and The
Australian Financial Review newspapers and is a competitor to News
Corp. (NWS.AU), the owner of this newswire and The Australian
newspaper.
Fairfax, like other media companies in Australia, has seen its
earnings hit by soft advertising markets. It is also undergoing a
structural change as it adapts to consumers switching from
newspapers to the internet to access their news.
"There's certainly a future for them if they can execute on
managing that structural change that's occurring in the market -
the shift to online," Mr. Fenton said.
Write to Gavin Lower at gavin.lower@wsj.com