Glacier’s adjusted(1) consolidated revenue was $52.8 million for the period, down $0.3 million or 0.5%. Adjusted consolidated EBITDA was $4.5 million for the period, down $1.9 million or 30.1% from the prior year.
The Company continues to make progress in its key growth areas in business information and digital media. Print revenue continued to decline as expected. The efforts to generate sufficient revenue growth from the high value business segments is working as demonstrated by the overall revenue performance. These businesses typically have higher margins and higher valuations than print revenue businesses once sufficient scale is achieved or sufficient growth opportunity is evident, so the Company can achieve higher value with lower consolidated revenue going forward. However, continued investment in product development as well as softness in print media community advertising are still constraining EBITDA growth.
Efforts are being made to improve profitability going forward through the acceleration of revenue growth from the investments being made, timing of additional investments in relation to incremental revenue being generated, and a variety of cost reduction and rationalization initiatives being pursued primarily in the newspaper operations.
Sale of Fundata Interest
Subsequent to quarter-end, the Company’s interest in Fundata was sold for $55.0 million. $45.0 million of the purchase price was paid at closing and $10.0 million is payable over four years through a vendor take-back.
Acquisition of Castanet
Subsequent to quarter-end the Company acquired the assets of Castanet Media. Castanet is the leading source of local media and related information in the Okanagan region of British Columbia, with over 35 million monthly page views. Castanet also operates a small radio station that is integrated with the Castanet operations. The purchase price was $22.0 million for the Castanet assets and $2.0 million for the shares of the company that owns the radio station.
The net proceeds from the sale of the Fundata interest and the acquisition of Castanet have been used to decrease debt levels.
The reduced debt levels will 1) allow continued development of growth areas with lower financial risk and 2) provide financial flexibility for future strategic acquisition opportunities, particularly in the business information areas the Company operates.
Highlights and Operational Overview
The environmental, property and financial group grew 6.1% in adjusted revenue for the period. Adjusted EBITDA for the segment was down 2.4% for the period as a result of the operating investments made in key growth areas, particularly REW and ERIS.
The commodities group’s total adjusted revenue grew 3.5% for the period. Adjusted EBITDA for the period fell by $1.2 million or 26.0% due to the continued softness of the energy and mining markets, and the ongoing operational investments.
Conditions in the agricultural market have softened amid uncertainty from trade disputes and the consolidation of major crop input companies. These adverse conditions weighed on first quarter performance. The Company did, however, continue to invest in and see solid growth in key agricultural information operations such as outdoor shows and online listings which resulted in improved performance, particularly for both Ag in Motion and AgDealer.
The energy group remains stable for the period after the substantial restructurings enacted over the last two years. The energy information group is now focused on 1) data, analytics and intelligence products and 2) digital media. These products continued to experience stable results as compared to the same period in the prior year despite continuing soft market conditions.
The Company’s mining operations, the Northern Miner and Infomine grew in both revenues and profitability despite operating in choppy market conditions. Having purchased the remaining interest in Infomine in 2018, the Company operationally merged its mining operations in the fourth quarter of 2018. This will continue to result in cost efficiencies and new revenue opportunities throughout the rest of 2019.
Community media print advertising revenues declined as anticipated, while digital revenues grew substantially. Overall adjusted revenue declined 4.0% compared to the same period in the prior year.
The Company is investing in the digital business by hiring and training to broaden our skills and experience base in line with market needs and opportunities, as well as product and services development.
The Company has determined not to proceed with its previously approved 10 to 1 consolidation. It is instead seeking regulatory and shareholder approval at the upcoming June 25, 2019 Annual and Special General Meeting of shareholders for a share consolidation on a 5 to 1 basis. The 5:1 ratio was deemed more appropriate than the 10:1 ratio to achieve a better balance of the likelihood of a higher share price and marketability while maintaining a greater number of shares outstanding and greater liquidity. The 5:1 ratio was deemed sufficient given consideration to the recent Fundata and Castanet transactions and the progress being made in the Company’s transformation and growth initiatives.
The Company continues to find meaningful growth opportunities in each of its sectors with which to increase value, and is achieving market traction in each one. Having said this, the Company has and will continue to make significant investments in good sectors.
Management will focus on making progress in its growth areas, improving profitability and reducing debt further in order to maintain financial flexibility and be in a position to exploit opportunities should they arise.
(1) Adjusted revenue and EBITDA reflects the inclusion of the Company’s proportionate share of revenues, expenses and profits from its joint ventures. For a reconciliation of adjusted results to results in accordance with International Financial Reporting Standards (“IFRS”), refer to the “Reconciliation of IFRS to Adjusted Results” as presented in the Company’s management discussion analysis.