Annual Report to Shareholders 1997

1 - From the Chairman

J.B. Fairfax AM

It is with great pleasure that I am able to announce yet another year of record profits for Rural Press Limited. It makes the group one of an elite number of listed companies that have managed to produce unbroken increased profits over an extended period.

In this unfavourable and low inflation environment, the Rural Press result comes after a difficult second half year and with only limited prospects of an immediate economic recovery in regional Australia.

Even though we experienced a lift in the agricultural sector, trading conditions were particularly tough, none more so than in the regional towns and cities in which our newspapers, printing plants and radio stations operate.

Ongoing cutbacks in infrastructure services to, and the withdrawal of businesses from those communities, continues at a disturbing rate. For example, many of them are facing the loss of their only doctor in the town, thus depriving them of the basic support structures that their counterparts in the cities take for granted. It is a trend that, if allowed to go unchecked, undermines the fabric of country communities.

The coalition government came to power in such overwhelming numbers because Australians wanted leadership - a government to take the country on a path of steady progress. We are hopeful that this will be fulfilled.

The potential opportunities for Australia are vast, particularly in regional and rural Australia. We are good producers of food and fibre and the positioning of the Rural Press activities both in Australia and overseas, enables us to provide service to relevant communities, and to benefit from the injection of economic activity that flows from government and private initiatives.

Rural Press Limited, with its many publications and radio stations, sees its role as the voice of those communities through editorial and news contribution and also as the commercial marketplace through the medium of advertising. Our report to shareholders this year attempts to depict the involvement that our newspaper, broadcasting and printing operations have in their communities. A number of examples of the many ways in which we interact with and support various charitable, sporting and commercial organisations are illustrated.

The committed and stable management team at the helm of our geographically spread operations has again enabled us to improve our results. Their ability to assimilate our acquisitions into the Rural Press culture has been our strength over the years. Your board of Directors is grateful to the management and staff for their commendable performance under stagnant conditions.

During the year, we said farewell to Mr. Dan Austin OAM, the Managing Editor-in-Chief of the Regional Publishing division, who played an integral part in that division's expansion over the last ten years.

In 1990 the company "put its toe" in the American market, with a modest investment in agricultural publishing in the south east States. After eight years of persevering as a minor player in that market, in June we announced the acquisition of the Farm Progress group of agricultural publications. Rural Press Limited is now in a leading market position in the US, and one of the leading agricultural publishing companies world-wide.

We are confident that management will again assimilate this significant acquisition into the Rural Press stable, with benefits both here in Australia and in the United States.

It is pleasing to see the company expand and build in its core business and we will continue to pursue growth opportunities in Australia and overseas.

J.B. Fairfax AM,
Chairman of Directors