By The Canadian Press
The outgoing CEO of Torstar says his replacement will have to review how much more money to invest in Star Touch, the Toronto Star's tablet edition that was intended to capture more readers when it launched a year and a half ago.
David Holland offered some parting advice during Torstar's quarterly earnings conference call Wednesday, two days before he retires.
The company has funnelled about $25 million into the digital venture since September 2015, with plans to invest between $2 million and $4 million more this year.
"My successor will obviously reflect hard on this," Holland said. The company expects to name his successor shortly.
Torstar (TSX:TS.B) launched Star Touch in an attempt to reinvigorate digital engagement at a time when Canada's newspapers have been struggling due to plunging advertising revenues.
It's one of few Canadian media companies to bet on a tablet edition. It was based on the La Presse tablet app, which has been successful for the Montreal-based, French-language newspaper.
Holland said the media industry takes a lot of criticism for not changing enough in an era of digital transformation, and while Star Touch readership failed to meet management expectations, he has no regrets.
"At least I can say we tried on this one."
Torstar continues to work hard to get the economics of the tablet edition under control, he said, and will see if it can make further progress on reducing costs.
Last year, the company laid off several temporary staff working on the tablet, saying they increased efficiency and required fewer people going forward.
Torstar reported $1.1 million in net income or one cent per share in the final three months of 2016. It was the second consecutive quarterly profit recorded in 2016 by the company, which ended the year with a 12-month net loss of $74.84 million.
In 2015, Torstar had a fourth-quarter net loss of $234.5 million or $2.91 per share, and a full-year loss of $404.84 million.
Torstar's revenue fell to $685.1 million in 2016, including $188.4 million in the fourth quarter, compared with $786.6 million in 2015, including $213.7 million in the fourth quarter of that year.
On an adjusted basis, Torstar earned 16 cent cents per share in the fourth quarter of 2016 — double the analyst estimate of eight cents per share compiled by Thomson Reuters.
This story is republished with the permission of The Canadian Press.