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Financial
Highlights Statement
of the Audit Committee
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Financial
Highlights Statement
of the Audit Committee
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Report to Shareholders 1999 has been a successful year for Post Publishing. Increased revenue has reflected the gradual recovery and returning confidence of the Thai economy. In particular, the market niche of the Bangkok Post has seen automobile, communications, travel and computer companies actively promoting their products, through its columns. These revenues, coupled with the cost reductions and business refocus in key areas, have led to significant reductions in our cost base, and consequently a much improved profit position.
Three factors dominated our thinking through the year. The sixth cycle birthday of His Majesty the King, with its accompanying celebrations, was the major event of the year. The realistic assessment of the implications and opportunities of the Internet, were a continual focus. The much publicised concerns over Y2K, its effect and potential for disruption in all aspects of our lives, demanded management time and ingenuity.
Within the domestic operations of the business, the programmes commenced in 1998, for the implementation of new editorial, and advertising systems were successfully completed, on schedule in the second half of the year.
The magazine division, largely consolidated within the joint venture, saw strong growth. The rationalisation process was completed at the end of the year, with Thailand Tatler reverting to its licensor. The magazines published within the joint venture, ELLE, CLEO, ELLE DECOR and BMW saw strong growth. Advertising revenue increased, and circulation increased strongly, for ELLE and CLEO.
Bangkok Post digested the many changes associated with the introduction of the new editorial and advertising systems, in the first half of the year. The focus in the second half has been very strongly on the paper itself. Independent market research was commissioned, keeping us abreast of the expectations of our readers, and providing focus for the continued evolution of the product.
Circulation of Bangkok Post has held well through the economic turbulence of the last three years. Where we have seen recovery in the advertising market, many of our readers as individuals are still badly affected by the economic situation. For a small number, the regular purchase of a newspaper is not their first priority. However, independent research shows our overall readership to be as strong as ever, with each paper having many subsequent readers sharing the one copy. As individual economic situations improve, we are confident that this will translate to additional subscribers and sales.
The book-publishing arm has had a successful year. Although this is a relatively small area of operation in commercial terms, it enjoys a prestigious position through its association with the Bangkok Post. Highlight of the year was the book "The Royal Palace of Phnom Penh' which added to a growing list of educational, general interest and quality coffee table books. Expanded international marketing, both through the Internet and at international book fairs, is building future potential.
The commercial printing arm, Allied Printers, has made considerable strides this year, strong management focus and operational training have paid dividends. While it has successfully expanded its regional customer base, it is the domestic market that is the key to its viability. We believe it is now much better placed to take advantage of the recovery in the broader domestic economy as it returns.
Much excitement and speculation surrounds the Internet, and its potential effect on the traditional newspaper business. One is reminded of the famous caution: It's tough to make predictions, especially about the future." A new study of consumer perceptions finds that each of the major media, newspapers, television, radio and the Internet, plays a different role in people's lives, and therefore requires a different approach. The study looked at consumers' relationship to each medium. Respondents said they used the Internet for escape and mental stimulation, as well as to obtain specific information on travel, business and health issues. They read newspapers for in-depth news, financial and sports information and movie reviews; magazines for information on fashion, recipes and health issues; watched television for entertainment or to spend time with family; and consider radio a background medium.
The Internet may actually be the print media's greatest ally. A report, which charts the Internet's impact on the entire half-trilliondollar communications industry, says by 2003 Americans will spend just under 10 hours a day consuming various forms of media almost half an hour than in 1998. The Internet, while accounting for just 5.4% of the total, is projected to stimulate media use and spending across all categories. Print media advertising is forecast to grow as a result.
Much of the hype
surrounding Internet is based on the American model, which is far removed
from the realities of Thailand. The relatively small number of Internet
Post Publishing's strategy is the development of a comprehensive site, covering all aspects of life and business in Thailand. Building on the strength of the Bangkok Post brand name, and the present website, bangkokpost.net, with its predominance of overseas visitors, it will further develop as a window on Thailand and the region. It will form links with other sites that are compatible with our image and standards. Increasingly as technology allows, it will be an even more active site, offering constantly fresh material to its users. The development of E-commerce for our own products and services, for the development of educational services, and for travel, are the natural extensions of this approach.
As the opportunities offer themselves, we would see the development of business to business services. By creative growth, through linked services and possibly through acquisition, we would seek to build complementary business services. Again built on the quality brand image of Bangkok Post, the aim being that this would become a largely paid-for access site, with comprehensive value-added information.
The difficult economic situation from which we are emerging, has strengthened the relationship between the company and its staff,everyone recognising a common goal. We are pleased to report that as the year progressed we were able to reinstate the salary and benefits cuts accepted by middle and senior staff. At year-end we were able to reward staff with salary increased as appropriate. We would like to thank all staff for their continued support, and look forward to the opportunities ahead. We anticipate with confidence the challenges of 2000 and the new millennium.
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©
The Post Publishing Public Co., Ltd.2000 |