Novus said the contract, which starts on August 1, would contribute strongly to group volumes. It said Independent Media would continue with in-house production at its facilities.
The new deal comes amid a decline in the group’s print revenue. In the year to the end of March, Novus’s print revenue was down 8.8percent. The company experienced a fall in volume across all printing categories.
Novus previously said it had been unable to grow its market share of about 65percent, because the market was fiercely competitive. The group had announced a strategy to diversify its revenue away from print, given the declining revenue in the contracting print market.
Novus chief executive Neil Birch said yesterday the South African printing market had matured.
The company said in March this year that the re-negotiated contract with Media24 would have “a substantial adverse impact” on its earnings and headline earnings for the current financial year.
The new deal comes shortly after Novus lost a portion of Media24’s printing work. As a result, said Birch, the Independent Media contract would mitigate some of the reduction of the Media24 printing agreement in certain regions, “and will provide the opportunity to re-create a number of recently lost jobs in the printing division”.
Novus said the printing contract with Independent Media included 53 newspaper titles, made up of dailies, weeklies and monthlies, for a period of five years, with the exception of Isolezwe News, Pretoria News and The Post, which are for two years, with an option to renew.
Novus Holdings would also print Independent Media’s national magazine titles for five years, including Fast Company, African Independent, Personal Finance, House & Garden, GQ Style and Glamour.
“This contract is proof that the group is moving in the right direction, especially as we contemplate the impact of a shifting operating landscape on our business, and redefine how we respond to these challenges,” said Birch.
Novus shares on the JSE yesterday closed 0.61percent lower at R3.27.
- BUSINESS REPORT