October 28, 2020
Chairman, Mr. Joseph Matalon, stated that, “the Company experienced a large volume of advertisement cancellation, as a result of the ongoing pandemic, which greatly impacted the Company’s revenue.” Notwithstanding, RJR is working vigorously to recuperate from this impact; as such, the Company is strongly monitoring its’ strategic projects which has been beneficial thus far and rebranded Radio Jamaica Limited to Radio Jamaica 94FM. Additionally, TVJ launched ‘Television Jamaica International’ with the intention to grow revenue in the hard currency markets. Mr. Matalon noted, “the service is already in the Caymans Island and plans are in place to reach the rest of the Caribbean.”
RJR reported a 2% increase in revenue, at the end of the financial year to $5.59 billion (2019: $5.48 billion). Total expenses increased 6% to $3.01 billion (2019: $2.84 billion). However, pretax profit changed significantly from a loss of $24.25 million booked at the end of 2019 to a profit of $39.47 million due to the 10% increase in gross profit to $3 billion (2019: $2.74 billion).
The financial year 2020/2021 started with uncertainty caused by the COVID-19 pandemic and as such affected the Company’s operations. Management noted that the following:
- Broadcast
- Shutdown of sporting activities, impacting Hitz 92FM, and TVJ Sports Network.
- Shutdown of entertainment events have negatively impacted the entertainment centered stations of Fame FM and RETV.
- Curtailment of gathering of people wiped out outside Broadcast revenues for all radio stations but especially Radio Jamaica 94FM and Power 106FM.
- Print
- The stay at home orders of the government and private sector workers in April and May, curfews, quarantine of communities, all slashed newspaper circulation (sales) revenues.
- The general decline in business and the cutback in advertising negatively impacted advertising revenues for the print- dual revenue streams were hardest hit.
- The lockdown of New York City curtailed printing and publication of the US and Canadian Gleaner and Star newspapers since March.
Mr. Gary Allen, Chief Executive Officer, noted “by May it was all clear and the depth of losses was enormous, and the downturn would be lengthy.” Thus, the Company immediately suspended the projects and programmes that were impacted which affected over 30 contract workers. This led to 93 workers being laid off for 120 days. Also, in the Print sector, Mr. Gary Allen stated, “the decline was so steep that we managed publication sizes and distribution to save on newsprint and ink cost; some publications were suspended; other projects and activities also halted.” Notably, in order to bring down the expenses within the Group, salaries were cut by 20% and 50% with directors taking the heaviest cut.
Also, in response to the COVID-19 impact, TVJ in collaboration with the Ministry of Education started several learning programmes to help children meet the challenges as well as to satisfy entertainment purposes, in which TVJ partnered with Fame FM’s and RETV’s YouTube channel and launched a Fame party series. Also, TVJ collaborated with the Ministry of Health and launched an exercise programme to help the elderly and children get fit.
Christopher Barnes, Chief Operating Officer, discussed the Company’s strategic and business views, objectives and key results. As it relates to the future of the Group, he noted:
- “We are more customer focus and with the introduction of a modern Customer Relationship Management System we will scientifically be enabled to be even better.
- We have introduced leading business collaborative management tools into our operations to support greater management efficiency.
- We have adopted a more focused strategic management approach through the adoption of the Objectives and Key Results (OKRS) methodology.
- We have been preparing to take full advantage of benefits of Digital Switch Over (DSO) and urge the government to set us on a path to implement, because we have opportunities that are to the benefit of Jamaica, especially our children marginalized by the impact of COVID-19;
- TVJ International is now earning foreign exchange revenues and will be expanded;
- 1spot media is revolutionizing access to Jamaican information in the most profitable way in Jamaica, and by Jamaicans EVERYWHERE in the World;
- We have invested in additional High Definition Television equipment to make our strong TV services, even stronger, and TV continues to invest into more outstanding local content;
- We have fully integrated all our radio services to generate greater competitiveness, efficiency and financial benefits;
- We have re-organized our print and online business and made digital content development and sale integral components along with sponsored and subscription content options;
- We have developed new data analytics capabilities and have started to use these to our competitive advantage and eventually as a service offering;
- We have instituted a new and modern integrated enterprise system in print between editorial, production and sales that will drive greater efficiency;
- We have invested in two ecommerce start-up businesses with good prospects and our diversification into similar ventures is progressing well.”
Analyst Certification –The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure –The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.