SPH makes big push into new media, foreign markets - Dec 06, 2006 (ST)

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The Straits Times / The Business Times News On SPH

SPH makes big push into new media, foreign markets

By Lee Su Shyan, Companies Correspondent
Dec 06, 2006
The Straits Times

MEDIA group Singapore Press Holdings (SPH) is moving aggressively beyond its traditional print business and off its Singapore home turf into new growth ventures. These include digital and online media, outdoor advertising, magazines and property development.

That was SPH chairman Tony Tan's message yesterday to shareholders at the first annual general meeting (AGM) he chaired since taking over last December. He spelt out SPH's strategy at its News Centre headquarters, saying the group was set to be transformed into 'an international multimedia group with a footprint covering South-east Asia and greater China'.

Newspapers 'will remain SPH's main profit generator over the next five years' so there will be a continued emphasis on 'improving content to better meet readers' interests'.

Circulation will continue to be built up to ensure that SPH's newspapers 'maintain their position as the leading information provider and main advertising platform in Singapore'.

But beyond print, SPH's longer-term future lies in digital and interactive media, Dr Tan said.

Already, there is online job site ST701, as well as interactive portal Stomp. In the pipeline are further online services in the areas of classified advertisements and search engines.

Other growth areas for the company are magazines and outdoor advertising.

On the property front, Dr Tan said that the upscale shopping, office and medical complex Paragon continues to enjoy 100 per cent occupancy. Its yield will be further boosted by increasing its gross floor area by 14,500 sq ft.

The Times Industrial Building site on Thomson Road is being redeveloped into an exclusive condominium.

Both projects have 'enabled SPH to acquire the necessary knowledge in developing commercial and residential properties', Dr Tan said.

Still, despite the group monitoring the property market closely, he said that 'SPH will primarily be a media business'.

When asked by shareholder Denis Distant if Paragon might form part of a real estate investment trust, Dr Tan said: 'We will continue to review the status of Paragon. The primary purpose is to maximise value for shareholders. For the time being, the board believes that it is in the best interests of SPH to retain Paragon as a property asset giving us a very good yield.'

Paragon's annual revenue is about $100 million. That will be likely rise by 'single digit millions' as a result of enhancements to the property, added chief executive officer (CEO) Alan Chan.

In response to a comment from investor Vincent Chen about SPH's strategy, Dr Tan said: 'I'm extremely confident of the prospects of SPH...we have increased the dividend payout this year. As our recurring earnings increase, shareholders will be able to look forward to increased returns.'

He said some long-term investments 'may take a couple of years before they produce results...We have to be patient but that is the right direction for the future of SPH.

'And I believe that eventually the stock market will recognise the value in our shares and that stock holders will find that it is worthwhile to hold on to their SPH shares for the longer term.'

The meeting got off to a solemn start as Dr Tan invited shareholders to observe a minute's silence as a sign of respect for the late Mr Lim Kim San, who contributed significantly to SPH as executive chairman and later as senior adviser.

Shareholders later gave the green light for a performance share plan which replaces the current stock option plan. The award of shares to staff will be based on performance, with some 'stretched targets' - a term referring to targets that are difficult to attain.

Key senior management will be assessed on delivering long-term shareholder value, with 'significantly stretched targets'.

Before the meeting wrapped up, one shareholder, Mr Tan, caused much laughter when he told the board: 'I hope that you didn't set the targets too high. It will be very demoralising for staff.'

SPH shares rose four cents to $4.38 yesterday.

» Chairman's speech