Berjaya Media Bhd
Continuing our focus on companies under the Berjaya Group, today we take a look at Berjaya Media (BJMedia), which owns theSun, Malaysia’s first and only free English newspaper with a daily circulation of 305,000 copies.

Launched since June 1993, theSun has been revamped several times and in 2002 was turned into to free newspaper. Brand building takes time and theSun struggled for a while, but has since built a strong brand, gaining traction among readers and advertisers.

BJMedia’s financials improved substantially in FY April 2014, with net profit of RM4.1 million compared with large losses in FY12-13. Revenue over the last two years have increased from RM50.9 million in FY12 to RM58.7 million in FY14.

The company had posted net losses of RM43.6 million in FY13 and RM35.2 million in FY12, but these were due to exceptional items as it wrote down the value of its assets, notably its publishing rights. Exceptional items totalled RM44.15 million in FY13 and RM35 million in FY12, meaning it was operationally marginally profitable in FY13 and broken even in FY12.

Its growth trend has continued over into FY15, with 1QFY15 registering net profit of RM1.2 million on revenue of RM15.7 million.

The stock is trading at 1.2 times book with a trailing 12-month P/E ratio of 27.5 times. Its price-to-book ratio is low for a media company with a recognisable brand, more so given its small market capitalisation of just RM117.5 million. In contrast, Star Publications trades at 1.6 times book with a 12-month trailing P/E ratio of 13 times — but its market capitalisation is 16 times higher at RM1.9 billion.

BJMedia had net cash of RM9.9 million as at 31 July 2014, or 4.2 sen per share. The company has not been paying dividends, but could afford to if its profitability continues to improve.

This article first appeared in The Edge Financial Daily, on November 5, 2014.