Media communications network STW has reported a loss of $52.6 million in its full-year results, with its underlying net profit after tax falling 13 per cent to $39.6 million from 2014.
The underlying net revenue for the company was up two per cent to $416 million.
The results come as the communications network gears itself up to merge with other mammoth network WPP, where WPP will take a 61 per cent controlling stake.
The yearly figures this morning says the one-off costs for the strategic review – which STW says has been completed – were $10.4 million.
The merger with WPP was announced late last year, following STW CEO Michael Connaghan’s expression of disappointment that the half-yearly results saw net profit drop 22.5 per cent.
Of the full year results, Connaghan said: “In 2015, STW delivered underlying net revenue of $416.0 million, up 1.6 per cent on the prior period, at a respectable operating margin of 18.5 per cent that translated to underlying net profit after tax of $39.6 million, down 13 per cent (2014: $45.6 million). There is no doubt that 2015 was a challenging year for the company with flat revenues and a decline in
underlying earnings.
“We have, however delivered to our guidance provided in August 2015.
“After a disappointing finish to 2014, the company undertook a strategic and structural review during the course of 2015 and made tough decisions to restructure the business. We have implemented a number of initiatives designed to drive deeper engagement with each of our businesses, coupled with stronger financial and management oversight. The changes are designed to allow STW to meet the challenges faced in the current trading environment and to position STW for future growth. As a result we enter 2016 with a clear strategy and path to return to sustainable growth
“As already revealed in the 2015 first half results, STW incurred a number of one-off costs leading to a reported a loss of $52.6 million for the year ended 31 December 2015. This loss is a result of non-cash impairment charges of $81.8 million, and costs related to the strategic review and other one-off costs of $10.4 million. These costs are non-recurring and the restructuring costs relating to the strategic review have largely been incurred in the year.”
While not revealing what’s in store for 2016, due to the merger with WPP, the report notes STW separately is expected to deliver a mid to high single digit increase in net profit.
