SPH to grow beyond print and Singapore: chairman - Dec 06, 2006 (BT)

BackDec 06, 2006

The Straits Times / The Business Times News On SPH

SPH to grow beyond print and Singapore: chairman

It will focus on core media business but will seize property opportunities.

By Teh Hooi Ling
Dec 06, 2006
The Business Times


The group will pursue a new strategy that goes 'beyond Singapore and 'beyond print', he told shareholders at the company's annual general meeting yesterday. This will require substantial investments in new media. But the returns on these investments will not come overnight - they will take a couple of years at least.

As SPH develops and reshapes its media interests, it will keep an eye on the property market, following its experience with the Paragon shopping centre in Orchard Road. This is carried in the latest accounts at $1.1 billion, but fair value is about $1.5 billion. Paragon is yielding double-digit returns on SPH's equity investment. And given Paragon's strong fundamentals, SPH is committed to holding on to it for the foreseeable future, Dr Tan said.

The group is also developing an upmarket condominium on its Times Industrial Building (TIB) site in the Thomson Road area opposite Mount Pleasant Road - a move that is expected to yield a higher return than simply selling the land. The project is expected to be launched early next year.

'As a company, when there are good opportunities - for example, with the TIB land - then I think it will be foolish for SPH to not exploit them,' Dr Tan said.

'Both Paragon and the Times Industrial Building projects have enabled SPH to acquire the necessary knowledge in developing commercial and residential properties. Based on this experience, we will closely monitor developments in the property markets with a view to taking a more active role should opportunities arise.'

But property is the icing on the SPH cake - which is, and will remain, media operations. There is no intention to turn SPH from a media to a property development company, Dr Tan assured investors.

'SPH will primarily be a media company,' he said. 'That's our core business and we intend to concentrate our attention and resources on building our media business - newspapers, magazines, online media.' SPH's long-term future lies in digital and interactive media, Dr Tan stressed.

'We have set out a vision to grow SPH beyond print and beyond Singapore and have embarked on new initiatives to position the company as a premier multimedia provider of content and services in the region.'

SPH has already launched online recruitment advertising and an interactive website called 'Stomp', among other things. On the cards are new online services such as classifieds, search and directories. It will also identify new Internet applications to invest in. And it will continue to deliver its media content through mobile devices.

On the magazine front, SPH is aggressively replicating its portfolio of publications in the region. It already has a presence in Malaysia and Thailand and is seeking to grow its foothold in China, Hong Kong and Indonesia.

At the same time, the group is stepping up its offerings in the outdoor advertising sector in Singapore, having acquired MediaBoxOffice last year. It will look for more prime locations for static billboards and introduce new outdoor technology and innovations. In China, it is looking for other acquisitions and partnerships following its purchase of a 35 per cent stake in Tom Outdoor Media Group.

Dr Tan said that in the interim, while SPH's new media initiatives are growing, newspapers will remain the group's main profit generator. As such, management will continue to work in improving content, growing newspapers circulation and widening readership.

For the coming new year, however, print advertising is not expected to grow as strongly as before, as the newspaper industry grapples with the impact of new media trends, he said.

Still, he expressed confidence in SPH's prospects. 'We have a good foundation, we have excellent staff, our newspapers continue to be the premier provider of information in Singapore and I would expect that to continue for many years,' he said.

'We are also launching new on-line media, new products - for example, My Paper - and developing new revenue streams. All of these will put SPH in a very strong position to continue to deliver excellent returns to shareholders. We have also increased our dividend payout this year. And as our recurring earnings increase, shareholders will be able to look forward to increasing returns on their investments in SPH.

'Some of the long-term investments, particularly the on-line media may take us a couple of years before we 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 stock owners will find it worthwhile to hold on to SPH shares.'

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