Besides paying off debt, Torstar Corp. says it hasn’t decided what do with the proceeds from the recent $455-million sale of romance book publisher Harlequin.
“I think we’re going to step back and take our time. I don’t think there’s anything (obvious investments) that’s right in front of us,” Torstar chief financial officer Lorenzo DeMarchi said Wednesday in a quarterly conference call with analysts.
“We’re going to take some time to reflect on what should the Torstar of the future look like… We want to be thoughtful on how we move forward. And that it fits within our broader game plan.”
In May, after nearly four decades of ownership, Torstar announced it would sell Harlequin Enterprises Inc. to global media company News Corp., which will make it a division of HarperCollins Publishers. The all-cash deal was expected to close by the end of the week.
DeMarchi said it’s unlikely the proceeds will be used to increase shareholder dividends.
“My bias is to see us employ the capital back into the business,” DeMarchi said.
Torstar, the owner of the Toronto Star newspaper and other publications, reported Wednesday a slightly higher profit in its latest quarter but falling print advertising revenues.
The media company said Wednesday it had a profit of $19.7 million, up from $18.1 million a year ago, but revenue was lower due to a drop in print ads.
The profit amounted to 25 cents per share in the three-month period ended June 30, compared with 23 cents per share in the second quarter of 2013.
Consolidated operating revenue fell seven per cent to $225.6 million from $243.6 million a year earlier.
John Cruickshank, publisher of the Toronto Star and president of Star Media Group (pictured), said the company expects ad sales to continue to fall for the rest of the year due to reduced advertising by the auto sector.
“The auto revenues has been softening probably for the last 12 months or so,” Cruickshank told analysts during a conference call following the release of the results.
Cruickshank said it’s not fair to compare the impact of the weak auto sector with the financial sector, which has also generally been pulling back print ads for the last few quarters.
“Every one of these categories are distinct and of course they’re very much influenced by how they’re doing… and how they’re introducing new products. I don’t want to say that this is a trend like the other,” he said.
Excluding Harlequin, Torstar reported a profit from continuing operations of $18.1 million, or 23 cents per share, up from $12.6 million, or 16 cents per share, in the second quarter of 2013.