Postmedia announces Q1 loss; Paul Godfrey stepping down as CEO

Postmedia announced Thursday the appointment of Andrew MacLeod as President and Chief Executive Officer

Mario ToneguzziCanadian newspaper giant Postmedia announced Thursday the appointment of Andrew MacLeod as President and Chief Executive Officer, replacing Paul Godfrey as CEO of the media company.

“It is with tremendous confidence that I recommended to the Board of Directors that the timing is right for Andrew MacLeod to take on the Chief Executive Officer position at Postmedia continuing the succession plan that included his appointment to President and Chief Operating Officer in October, 2017,” said Paul Godfrey, Executive Chair, in a news release.

“Over the past fifteen months, since taking on the role of President, Andrew has championed a strategy that has delivered continued growth in new revenues and successful structural transformation that will continue to put Postmedia on a strong footing at a critical time for the industry.”

The company said Godfrey, as Executive Chair, will serve as a member of the senior management team and advisor to the President and CEO and continue to provide leadership for the Board of Directors.

In Alberta, Postmedia owns the Calgary Herald, Calgary Sun, Edmonton Journal, and Edmonton Sun.

Also on Thursday, Postmedia announced its financial results for its first quarter which ended November 30.

It said revenue for the quarter was $171.3 million as compared to $189 million in the same period in the prior year, a decrease of $17.7 million or 9.4 per cent.

“The revenue decline was primarily due to decreases in print advertising revenue of $14.0 million or 15.4 per cent and print circulation revenue of $4.6 million or 7.9 per cent. Digital revenue increased by $1.5 million or 4.7 per cent in the quarter with digital advertising revenue up 6.3 per cent,” said Postmedia in a news release.

“Net loss in the quarter ended November 30, 2018 was $1.4 million, as compared to net earnings of $5.8 million in the same period in the prior year. The change was primarily the result of a gain on disposal of operations in Q1 of Fiscal 2018, losses on derivative financial instruments and the disposal of property and equipment in Q1 of Fiscal 2019, partially offset by a decrease in restructuring expense.”

During the three months, Postmedia said implemented initiatives – including compensation expense reductions, real estate rationalization, production efficiencies and other transformation programs – which are expected to result in approximately $4 million of net annualized cost savings.

“The Company intends to continue to identify and undertake ongoing cost reduction initiatives in an effort to address revenue declination in the legacy print business,” it said.

“During the three months ended November 30, 2018 the Company made a mandatory debt repayment of $8.7 million bringing the total principal amount of first-lien notes outstanding to $125.6 million. Subsequent to the end of the quarter, the company sold the Ottawa Citizen facility. Net proceeds from the sale will be used as part of a redemption of $20.4 million first-lien notes at par in accordance with the terms and conditions of the amended and restated first-lien notes indenture. After this redemption the Company will have $105.3 million of first-lien debt outstanding – bringing the total repayments made, since October 2016, to $119.7 million.”


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