Citizen owner Caxton expects nearly 80% drop in earnings because of Covid-19

  • Media group Caxton expects the Covid-19 lockdown to weigh heavily on its earnings.
  • Headline earnings per share are expected to decline by some 80%.
  • Some of the busineess units which were closed had been struggling for years, but Covid-19 worsened the situation.

Caxton and CTP Publishers and Printers said Covid-19 has had an "unprecedented negative effect" on its financial results.

The media group on Thursday issued a trading statement after markets closed warning that headline earnings for the year could decrease more than 80%.

Earlier this year it decided to withdraw from magazine publishing as Covid-19 added pressures to the "already difficult trading conditions for magazine publishers", some of which had been in a "decline" for a number of years pre-Covid-19, it said. It closed 10 brands, including Bona, Country Life, People, Rooi Rose, Vrouekeur and Your Family, among others.

Other media houses were not spared, such as Associated Media Publishing - the local publisher of Cosmopolitan and Good Housekeeping - which permanently closed on 1 May; and Media24*, which announced the closure of five magazines and two newspapers.

Caxton said its expected results were due to the "difficult economic circumstances" experienced during the first half of the financial year, which were then intensified in the third quarter when the Covid-19 lockdown struck.

"All operating units were affected to varying degrees, ranging from a complete shutdown to, at best, curtailed operations.

"The demand for our products and services was severely impaired and in some of our major lines, the sale of the end-consumer products was totally prohibited," the statement read.

The group also had to incur impairments, it said.

Commenting on the closure of businesses, the group said that the closure and retrenchment costs have been provided for, and "further depressed earnings".

Caxton results will be released on or about 18 September.

* Fin24 is part of Media24.

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