Seventh largest Fairfax shareholder, Paul Xiradis, has backed Fairfax’s management and predicts a brighter future for media in Australia.
The businessman gave the ailing industry a vote of confidence, saying it is being “under appreciated by the market”.
Mr Xiradis’ company, boutique fund manager Ausbil Dexia, last week emerged on Fairfax’s share register with a 5.3 per cent stake, worth about $66 million at current prices. He already owns shares in Seven West Media and News Corporation and says he was looking at Fairfax shares for a long time.
“It’s a stock that we’ve looked at for some time, which we see some good long-term value in,” Mr Xiradis told The Australian.
“We think the media sector has been devalued and de-rated quite aggressively,” he said, adding that he expected a strong recovery in the advertising market. “There are some structural challenges, but some of it is cyclical and we see a pick-up occurring.”
Mr Xiradis believes with his expertise, he can help change some vital problems in the organisation.
“We think they’ve been slow in reacting in the past; I think they had the opportunity in years gone by to be well placed, but they stuffed it,” Mr Xiradis said.
Mr Xiradis says Fairfax must forget about the things it had failed to capitalise on in the past and move into new directions that will facilitate better revenue.
He has applauded recent moves by Fairfax to reduce its large debt, which last year almost exceeded its market capitalisation, to a more sustainable level.
“I think the balance sheet is in pretty good order, cash flow is very strong and they’re progressing effectively into the new digital world. I think the market is under-appreciating what their digital assets are really worth. They’re being valued on an old-style media valuation.”
Source: The Australian.