Q1 2020 Earnings Call

Good day walks doesn't use Corp. Q1 fiscal 2020 conference call. Today's conference is being recorded media will be on a listen only basis, not just time I'd like to turn the conference over to Michael flooring. Please go ahead.

Thank you very much Eduardo Hello, everyone and welcome to news Corp. fiscal first quarter 2020 earnings call.

Sure our earnings press release about an hour ago and now posted on our website at news Corp. Dot com on the call today at Robert Thompson, Chief Executive and Susan New Cho Chief Financial Officer, well, then what some prepared remarks I'll be happy to take questions from the investment community. This call may include certain forward looking information with respect to new sports business and strategy.

Actual results could differ materially from what is sad news corp's Form 10-K , and Form 10-Q filings identify risks and uncertainties that could cause actual results to differ and cutting cautionary statements regarding forward looking information. Additionally, this call will include certain non-GAAP financial measurements, such as total segment EBITDA adjusted segment EBITDA and adjusted EBITDA.

The definitions and GAAP to non-GAAP reconciliations of such measures can be found in our earnings release with that I'll pass over to Robert Thompson for some opening comments.

Thanks, Mike.

In the first schools are a fiscal 2020 News Corps showed strong right. The Dow Jones in higher revenues at news, operator, I really don't call.

The company also face challenges from pronounced currency headwinds sluggish Australian economy in particular struggling a strike in property market, it's always difficult comparisons with prior year onetime revenue watch them in a non cash impairment charge in this quarter.

For the quarter.

The company reported total revenues of $2.34 billion, we total segment EBITDA of 221 million.

This represents a decline of 7% in revenues and city I said in profitability versus the prior year.

The revenue declined 3% was directly attributable to currency and 2% to a onetime cash payment last year by type of core in the UK.

Before getting into the find a de tells you the quarter by segment I want to address a significant development that bodes well for our future prospects.

There has been a fundamental change in the content landscape for well over a decade Newschool has led the international debate in seeking sand returns for our high quality content from the digital platforms clearly the dominant digital platforms are under intense and continuing regulatory scrutiny on issues such as privacy.

In the paid advertising market. So it has.

We need substantial development with Facebooks decision to pay a significant premium out premium journalism at the WSJ and beyond.

This does using begins to change the content equation.

And we expect a positive impact on financials at out using information services segment.

For the long term beginning this fiscal years.

The Facebook deal complements the agreement we reach with Apple in March when the Wall Street Journal be Kinda launch partner, that's Apple news, plus which expanded the reach of the journal and its journalism to new audiences, our brands and outcome.

Actually benefit from the marketing reach and proud west of a partner, which has nearly 199 million finds in the U.S. and 1.4 billion devices Barclays.

We expect this sectoral shift in the value of digital content. She has significant implications for investors and our bottom line.

And let us be quick.

These unprecedented changes into publishing industry would not have been achieved without the determination of route good unlock the Murdoch any unwavering support of the New School Board, which has taken a long term principled stand on the need to change the digital ecosystem.

Other publishers around the world should feel free to send US a commission so services rendered.

[noise] I know, it's another development worth highlighting is the ongoing simplification of new school.

As you are aware, we have put a news America marketing business under strategic review and job in discussions regarding a possible style of that business. We expect to update you would you cools consistent with that theme of simplification, we have our unruly attic business under strategic view and also.

I mean discussions about a potential side.

We have learned much from the very talented team at unruly and those lessons will inform our business for many many years to come.

With simplification being an ongoing process. The company will continue to review its structure with the aim of bringing extra focus to our key assets, allowing investors to have a far clearer view of their prospects.

Let me change the news information services segment in which Dow Jones had a strong quarter with increased revenues and greater profitability you're right. The.

Wall Street Journal subscriptions grew 8% and we have crossed the 70% threshold. So the number of digital only subscribers.

Tonight. We currently do not include readers a couple of news plus in that number. So it certainly does not fully capture the number of read is what now paying for access to the journal.

Advertising revenue at Dow Jones group troop present in the quarter led notably by strong digital outperformance that WSJ dot com, which grew 13% as compared to a decline that the New York times.

We also saw a stronger circulation revenue growth and increasing profitability as compared to the New York Times.

Just professional information business continued to struggle with the burgeoning risk and compliance sector in particular growing 25% your idea.

With many companies under intensifying regulatory scrutiny, it's imperative to minimize risk and maximize compliance remains a burgeoning source of business.

Overall, Oh professional information business represents a pronounced distinguishing advantage I couldn't meet your competitors and provides multiple opportunities for for us to up sell specialist content to companies professional investors and individual investors, who actively manage their full focused.

Aarons group continue to report strong traffic growth in Q1, we totally unique users up 27% year over year, driven by market watching Barron's online burn subscribers grew 7% to 587000, well Mockup watch Q1 revenue was its strongest quarterly revenue performance Yep.

[noise] into you Guy.

Digital subscribers at the times and Sunday times grew 19% to 312000.

Advertising in local currency was up to the first time since Q3, all financial year aging as digital growth more than offset modest print declines.

Digital advertising growth at the Sun accelerated from the prior quarter right and then it benefited from a growing audience and high yield with approximately 129 local monthly unique users in September 20 budgets. Meanwhile.

It was the October range, our results show that the reach of wireless is stations grew 21% year over year with a 26% increase in listening hours that propelled by Chris Evans. Joining then it worked Virgin radio experienced a 300% increase in reach and 500% jump in listening hours.

Meanwhile, Talksport had a 20% increase in digital listening. Thanks in part to the New Premier League rights, which drives Saturday listening up 120% year over year.

In Australia, the Hasz economic conditions that affected all of that businesses, including Harpercollins.

In media, we continue to execute on a digital strategy with the milestones, reaching more than 542000 digital subscribers, representing 23% year over year gross.

Stride and 65% described subscribers with digital.

Selling that subscription sensibility is indeed evolving and more people expected pay more for digital products.

Circulation revenue was also lifted by pellet copper price increases Metropolitan Masters [noise].

We took the bold step up sharply increasing the cover price of the New York Post in June and there has been a 12% year over year increase in circulation revenue advertising also raises similar right.

It is what I think that more than 70% of the post advertising revenues in the quarter where digital.

Turning to subscription video services total subscribers that Foxtel grew 6% year idea. Despite the difficult conditions in Australia. The latest number of paying subscribers as of November five reached 400 in 2000 total subscribers at 443000 and this is less.

The year after its launch.

With the rugby World Cup, ending last week I always now preparing for the seasonal shift to cricket and other summer sports in Australia.

Tayo customers continued to be highly engaged with 75% of subscribers using the product each and every week.

Okay.

Premiums streaming service and shows that I thought a large number of assignments are prepared to pay for content that had previously been presumes.

Given that we have already acquired the sports rights, it's another important opportunity to monetize those rights without undermining the coal broadcast offerings.

During this quarter Foxtel has continued to make significant enhancements to its product offering the company began rolling out a new user interface to more than 1.1 billion I Q3, and argue for set top boxes. Since the end of September Foxtel has also begun imagine shuttle refresh for movies and entertainment with a focus on.

New Fox Brad channels.

<unk> Foxtel NBC Universal announced yesterday, a long term deal that will provide a variety of programming. So foxtels broadcast on demand and streaming platforms, including Universal Studios movies, along with popular television series and other content.

With a simplification of the Foxtel product offering having been completed a new customer loyalty program called Foxtel for test has been launched we are all hopeful that these initiatives will help strengthen the product and reduce churn, which in the call Foxtel retail channel accounted for a majority of broadcast subscribe.

This excluding wholesale partnerships actually improved from 13.6%.

12.2%.

[noise] book publishing results were influenced by adding Btis comparison to the prior year, when we sold 42% year over year EBITDA growth in the first quarter fiscal 20 nines and thanks to the remarkable success of the retro haulage and mock Madsen books.

There are a number of important well works in the Hopper Collins pipeline, including I Cook book from read Drummonds, all through the pioneer woman series in the current quarter as well as the Andromeda evolution by Michael product release next Tuesday other books in the second half of the fiscal year include a cookbook from Joanna gains of.

My Magnolia series, five and in the UK work by the best selling Jordan's all that David Williams, We also expect to see benefits from the release of the film version of A.J. fins woman and the window.

Callens also announced it would be publishing back the kind of compelling memoir by Tiger Woods.

Turning now to digital real estate services.

Hey results with challenged due to soft listing volumes in Australia.

Average option clearance Reits have returned to levels seen seen before the market correction I sent in Melbourne, and Sydney and there has been some improvement in the month on month listing environment.

With evidence of a gradual market recovery, we do expect enhancements and revenue in the second half of this fiscal year.

Moving operator, a real to dotcom had a robust quota and we have reason to be optimistic I've. Its prospects. Thanks to signs of improving health in the U.S. housing market.

Existing home sales around the rise and there has been rapid audience growth. It really don't call whether it was an 18% year over year increase in traffic in the quarter [noise].

Based on the most recent comscore data realtor dot coms traffic is clearly gotten significantly faster than that nearest competitor.

In addition, we are pleased with the ongoing integration Devops city, a business that he's helping real to dot com become even more connected to consumers and two realtors, who are provided with high quality refined believes that we expect to minus ties in adjacent cities such as mortgages. We are not entering the house flipping just.

Dress Io business, but once off of vendors as many potential purchases as possible. The mall competition for a house the high the price for the seller.

Well, we have been in a period of reinvestment of moved due to the up city acquisition. We are seeing the benefits of that commitment with improving financials and that will accelerate in the second up.

So in U.S call as the year unfolds, the simplification of our structure will continue and we expect to see further benefits from the shift in the balance of power between crisis of content and the digital distributors investors in U.S cool should be the beneficiaries of that fundamental transformation.

Now, let's Sedrin side, we will turn to suit.

Thank you up it.

Turning to the financial Ski school 2020 Fist quarter total revenues were approximately $2.3 billion down 7% versus the prior year and title segment EBITDA was $221 million downstairs Shiite. The census is the prior year [noise].

The results were impacted by last year's onetime benefit related to the exit of the partnership some bits in the UK, coupled with continued currency headwinds in challenging price comparisons at Harpercollins.

On an adjusted basis, which excludes the impact of acquisitions and divestitures currency fluctuations and the other options disclosed in our release revenues fell 4% and total segment EBITDA decreased 30% [noise].

Net loss for the quarter was $211 million compared to net income of $128 million in the prior year, reflecting a $273 million of non cash impairment charges, primarily at news America marketing.

For the portion we reported a loss per share, especially nine cents as compared to earnings per share 17 cents in the prior year.

Adjusted earnings per share was four cents in the quarter says to 17 cents in the prior year.

Turning now to the individual operations segment in using information services revenues for the quarter, where I for $1.1 billion down approximately 8% just as the prior year currency had a $65 million, 3% nicotine intact.

Digital revenues, the Dow Jones, and the newspaper enough Ted's represented 38% at the combined revenues.

34% at the segment's revenues would teach it up from 73% in the prior year, which included the onetime payments.

Advertising revenues the segment were down 8% during the quarter versus the prior year with approximately $15 million a 3% you should negative currency fluctuations performance was stable versus the prior quarter right improvements at Dow Jones, a news UK absent currency impacts offset by declines at news America marketing and uses.

Yeah.

[noise] circulation and subscription revenues raise one since this is the prior year, despite a $16 million a 3% negative impact from foreign currency, Great was again led by Dow Jones.

Segment EBITDA for the quarter was $66 million down from $109 million with the decline due primarily to the absence, but the net benefit related to the exit of the partnerships or some bits in the UK last year.

We reclassified approximately $7 million a coffee in the first quarter fiscal 2019 from the other segment to the news and information sensors segment.

The mainly related to initiatives, including used by Q label programmatic S., it and some share technology services the directly benefit the news and information services segment as part of the ongoing efforts to leverage at global scale to low cost [noise].

Now talk through some segment highlights.

At Dow Jones can Cima circulation revenues in the first quarter remains very healthy growing 6% benefiting from 17% growth in digital only paid subscribers. The wall Street channel to approximately 1.9 million as well as subscription price increases digital paid subscribers accounted for 71% of the title subscribe as I said the Wall Street Journal.

65% last year.

We see a big opportunities scaled the Wall Street Journal based directly entry valuable said potty relationships as Robert mentioned as a result, we expect to see incremental revenues from these partnerships this year.

Total subscribers in the quarter for Dow Jones consumer products, which also includes Baron and financial news in the UK reached approximately three point Threemillion again, posting record levels of that digital only subscribers rose 20% versus the prior to almost 2.3 million subscribers.

We remain optimistic about professional information business, which accounted for 29% of Dow Jones revenues this quarter.

A key growth engine continues to be in risk and compliance, which accelerated its revenue gross to 25% in the quarter compared to the prior quarter [noise].

I gave her up sufficient favorable that professional information business grew a write off 8% this quarter.

The timing revenues at Dow Jones in the quarter Rose, 2% any improvement from the fiscal fourth quarter right led by digital growth with a relatively stable print performance digital advertising accounted for 42% social change at the time he could hit 37 last year.

We continue to dollars healthy revenue growth at Dow Jones with reinvestment, which he is leading to ongoing profit rice.

Elsewhere across our news portfolio advertising conditions were mixed.

You should trade advertising revenues for flash on reported basis and up 6% in local currency, representing the first year over year, increasing local currencies since the third quarter fiscal 2018.

Do you take shape notable growth in digital, particularly at the Sun, which is growing in both audience engagement.

The tossing conditions in Australia with more challenged notably in print advertising revenues down 13% on a reported basis down 8% in local currency.

Great helped mitigate print declines we've continued great nice extend a small medium business initiatives and at least dot com today you.

I'm circulation at digital paid subscribers again grew an impressive right digital subscribers rose, 19% at the time to the Sunday times and 22% it needs a straight you [noise].

Increase in digital subscribers alone we have a price increases you should try and use the strike helped mitigate print volume declines in currency headwinds.

Finally at News America, marketing revenues fell, 10% chip and by weakness in freestanding insert products given the ongoing digital migration, the partially offset by grace in in store product revenue, which accounted for roughly half of the ice room revenue.

Turning to the subscription video services segment revenues for the quarter with $514 million down 9%. This is $565 million in the prior year of which $34 million will fix the said was due to the negative impact from foreign currency.

Broadcast revenue trends were relatively similar to the prior quarter with the revenue decline driven by lower boycott subscriber base and changes to the broadcast subscribed the package mix. The revenue decline was partially offset by increased revenue contributions from kayak and Fox till now.

Importantly, as we look at a poor driver if the business TV subscription revenue, which includes like broad constant Archie Ti revenue, excluding the impact of currency revenue growth from I.T.T. products, well myself set broke off to quantify Porsche which will be key to the ability of the business.

Segment EBITDA in the quarter was $81 million down 28% with the primary which in addition to the revenue trends was also impacted by $16 million of costs related to domestic cricket rights, which we didnt, having the pricing and $14 million related to the noncash accelerated amortization assertion that entertaining entertainment programming costs as we.

Hi watch it last quarter.

We continue to expect approximately 30 to 35 million dollar impact from the accelerated amortization for the fleet with Grace impacting the first half of the.

Oh, the cost, notably in I'd hate to lower this quarter as the team is focused on rightsizing the cost base.

We continue to expect fleet capital expenditures to be approximately 20% to 20% lower than the prior year and for the cash flow generation to improve.

Turning to the <unk> folks tells closing paid subscriber base was approximately 3.1 million as of September fishing with volume growing 6% versus the prior year driven by the launch of K last November .

Oh that subscriber base over 2.3 million at the time to closing subscribers with broadcasting conventional subscribers and the remainder consisted of Caone Talkatone now [noise].

Hi, I paying subscribers grew to 364000 up from 331000 last quarter or 12% and social Foxtel subscribers advice.

Leading try list I raised 430000 subscribers.

We're seeing the custom activations and more pronounced around because it's the first quarter had less exclusive content, particularly following the <unk>, we have seen notably stronger ads with the stops at the rock the World Cup, which began in late September .

As if nothing but a fixed kinda paying subscribers increased to approximately 402000.

We continue to see that carry I subscribe is incremental to the subscriber base with very little cannibalization from the cool pool cost business.

Paying subscribers. So now were approximately 375000 down from 446000 last quarter. Following the conclusion of the game of Thrones, that's still up from the prior year and have seen an increase me a PE firms like the last quarter and the prior year. In addition, folks I will say planning and you entertainment product, which will leverage the chaos.

So if the commercial launch anticipated lifestyle in fiscal year.

In the first quarter broadcast Chen with full team went full percent. This is 12.9 to sit in the prior year.

But down from 14.7% in Q4, reflecting continued focus on should management in the <unk> told direct channel and higher penetration of the hockey full set top boxes.

As a reminder, low out to customers on expiring contracts from the past 12 to 24 month compounded by price rise is resulting in higher change versus the prior year.

Chen from platinum and sports teams remain materially lower than the type.

Broadcast ARPU grew 2% to about 78 straight and all those 10 month.

We expect to complete the refinancing at a significant portion of Fox Delta in the coming weeks, which will include a package its bank refinancing third party financing an additional shareholder funding.

Concept the refinancing news Corp has contributed an additional strange all of 200 million lighting.

And the new financing will extend maturities for at least three days and importantly, provide foxtel with ample liquidity and flexibility to execute on it strategy.

[noise] publishing Harpercollins faced an unusually difficult comparison to the prior year. She should success, it's Rachel solar Cisco wash will face and she Thomas' hate you gave and not meant.

A lot as a result revenues for the quarter fell 3% to $405 million and segment EBITDA fell to $49 million.

Notable releases this quarter include Daniel fill this new Gill and patches. The touch House Karen School, just left we dive demos inside out and middle to end the feed bubble digital revenues declined 5% and represented 20% 22% of consumer revenues also impacted by the year ago comparison.

[noise] that the digital real estate services segment revenues were down 7% to $272 million, which $10 million a 3% was due to the negative impact from foreign currency on an adjusted basis revenues declined 5%.

[noise] Ari I group revenues were down 14%.

Down 8% in local currency as high yield and improved product mix was more than offset by an over a 15% year over year decline in new listing volume during the quarter developer revenues were also down on the back of the 26% decline in New project development.

Revenue decline was also impacted by the extended duration of Premier old listings from 45 to 60 days, which increased the revenue just here over the period.

Please refer to our earnings release and they conference call that just conclude a traditional details and comments on the outlook.

We have revenues rose, 4% to $123 million. This if the price with real estate revenues growing 11%, which is an improvement from the fourth quarter right. The increasing real estate revenues, which represented 80% of total revenues was led by higher contribution from hopes sushi combined with an improvement in lead volume and audience they seem to come.

Checks at the U.S. housing market showing signs of improvement with existing home sales up low single digits in the course of compared to the prior year.

As I mentioned last quarter, we pick on life testing your performance based only model you know for doesn't docket stashing on beta fish to analyze the impact and scalability at the platform. The test also allows us to better control the consumer experience and the transaction.

Although it used to relatively early in the testing every single one of the core metrics has gone up materially leads meeting rights home values and close right the old trending in the right direction. We're very encouraged by the result, and have continued to allocate more leads to the up city model, which will allow greater opportunities to further extend into ancillary revenues.

On an audience, we saw an acceleration audience growth versus the fourth quarter growth right average monthly unique users it real to dot com, reaching out to 71 million rising 18%. This is the primary together with a nice pickup seems like page views and time spent.

Segment, EBITDA fell 22% $82 million speech ARIA revenue declines and investment at me she shops Cici adjusted segment EBITDA declined to just 2%.

[noise] other costs increased $47 million from $37 million. The majority of the increases related to higher equity comp due to the performance <unk> existing schemes and the stock appreciation since the grant dice as well as the phasing it sit and strategic initiatives.

Most importantly, we do not expect this increase to be reflective of the fleet.

I would now like to talk about some things in the upcoming calls huh.

Hi, news and information services advertising trends, thus far remains seem lunch the price course levels, although visibility remains limited we continue to seek cost efficiencies, particularly by the UK industry comparisons should ease now that we have moved past the some bits benefit and we expect to show improvements, particularly at our new spreads.

In subscription video services, we will anniversary the acquisition at the domestic cricket rights and cost trend should be more favorable we will say, let the price increase from upcycle last year.

The book publishing as Robert mentioned, we're excited about the recent launch of rate Truman's tiny women, the new frontier well they will continue to face difficult comparisons as the prior year included Joanna gain find body and strong Buckley styles.

Given the timing if the released should we expect performance will be more second half weighted.

At digital real estate services, we anticipate improvements at news as we left the up city acquisition, particularly in the second half.

As noted on their lease ARIA expects revenue growth to be skewed towards the second half of the fiscal year.

Please see the really some more detail with that let me hand, it over to steal crisis acuity <unk>.

[noise] that's of course, you like to ask a question. Please signal star one on your telephone keypad, if you're using a speakerphone. Please make sure immune function, it's turned off to like signal to return equipment.

I got press star wants to pose the question, we'll pause for just a moment told everyone an opportunity for questions.

Well take a first question from cane Haddon at Goldman Sachs. Please go ahead.

Good morning, I'm just.

Right and you've worked it doesn't need to be more color around quote scored during the quarter to drive that Gordon and then on some comments around the red and you quantum we should be expecting promote digital partnership diffuse sort of next year.

Two weeks ago through.

[noise] slipped I'll take the second to the question first time.

I spoke deal is a big deal it establishes a clear president of paying a premium for premium journalism.

And there a couple of other initiatives that.

When you click on a headline into Facebook news today you'd be talking to outside so the story is not hosted by Facebook and that means that we're able to sell advertising directly and well have a more lucrative flow Commission data are these were all essential preconditions for our sense, our agreement and we'll have a long term benefits.

On our accounts.

The fact is that there will be less provenance, if there's not a premium for promo premium for programs.

It's a frankly clear that the revenue Charlotte flow had shifted dramatically from the greatest to do distributors. So.

For us or come actually there are two things that a meaningful I'm absolutely essential firstly development, although subscription sensibility that has to be more of a propensity to pie thankfully Facebook understood that priority.

Secondly, the digital advertising market is dysfunctional.

Recycled I've been market is a virtual monopoly.

Being very public about our concerns on that segment, which is in dawn reform and is a thankfully now under close scrutiny by 50 U.S. attorneys general.

Ken just in relation to the cost we saw about a 4% increasing costs.

Yes, I set out China. So you should use that number is your proxy.

Thank you cant thanks.

There are we'll take our next question please.

[laughter] Southern your question, it's been et cetera.

Self but from the Q by pressing star to not thinking next question from Penn at JP Morgan. Please go ahead.

Good morning, guys. Thanks, taking my question you mentioned from your comments, you're bringing extra focus on your key assets and given the proposed to Nam how should we think about the company's overall strategy going forward are you looking to unlock the value of assets, you and monetization or could you be looking to beef up your existing business.

As with acquisition.

Eric's simplification is indeed, an ongoing process and it doesn't stop at news America marketing going on really the we're very cognizant of that the company trades at a discounted to some of the Pops and were seeking to rectify that situation and maximize value for all shareholders. So it's fair to say that the institution.

Religious specs and well continue apace.

Thank you Eric.

Eduardo we'll take our next question please.

Our next question comes from ads for like Whiskey at Credit Suisse. Please go ahead.

[noise] Hi, Robert how Susan I'm, just a couple from me related to SBS and just basically says and wanted to clarify your comments around the next quarter.

You said you'd like decreasing domestic cricket Rod So should we expect any increase in the cost of the cricket heading into Q2, and then just secondly, you commentary around the launch of an inch time and I only offering in asphalt, but do you expecting additional cost the sites that we that offering or do you think that you can.

Pretty effectively utilize your existing rod [laughter] and office straining product and then just related to that sorry to kind of carry on with base, but just your rationale far given that it feels like it is a pretty crowded space in streaming services in Australia.

[laughter].

I'll take maybe to assist you in Robert can take the financial if that's okay. So just in relation to cricket we would expect to say very very modest increases over the course with east of the bulk of ice coffee come through in Q1, but I think it's important to note. When we think about the cost base. The largest increase its come through is because of the noncash amortization in relation to license.

<unk> expenses, so over the full we absent these costs, we would expect a whole cost base to be relatively stable, but it is important to note that the team down in Australia, a continuing to focus on rightsizing the cost base on a continuing to look for opportunities as they make forward I mean relation to areas. We are looking to launch that towards the back.

Oh falls this particular fiscal year, we're not expecting to see significant incremental costs to your point, we do have a lot of the content coupled with an existing deals we will of coal type marketing costs as we scale up that product, but the actual incremental costs that we'd expect to see within the you're going to be minimal.

If I could just a supplement susan's comments.

It will obviously be based on the tie a distribution platforms I'm much of the engineering. There has already been done and I think when you speak of streaming Michel endpoint Tonight about Foxtel is the rapid rise of tires from nothing a year ago to 402000.

Paying customers now into another 443000 intelligent.

And this is not a service across six not it on a month, it's $25 among given the view of feedback and satisfaction. There's obviously some longer term elasticity in that process and when you see the sluggishness in new strain economy advertising in real estate, which has obviously had an impact on earnings the results are even more impressive [noise].

Thank you.

Joe a Eduardo we'll take our next question. Please.

Yes, well not thinking that's question from Craig Huber Research partners. Please go ahead.

[noise] so Craig.

Mr. He your line is open.

[noise] right when I said worst question from Fraser Mcleish, Tennessee.

[noise] Hi, Robert I'm, just interested in your comments upfront you were talking about getting has a clear view the assets and the ball you are you willing to just give us a little bit more insight into what you're meeting their assume you're talking about the wall Street journal and timing of that I mean, we now have to wait until the next financial year.

For that and that's my first question and then just secondly, just on move which you know the margins you got to do a little bit of workers. It's about can I, just don't report them, but look like but that sort of 10% level and that sort of been stubbornly at that level for a little while and you know is it structurally just a low margin.

Industry in the U.S., because it looks very low margins relative to similar businesses around the world or or do you think we can really see some margin improvement there over the next few years. Thanks.

On your first question, we really can't go into detail about walk simplifications means isn't in the longer term.

What it does made at the moment This news America marketing and.

Marketing it on really which a under strategic review.

<unk> as I said that strategic review does not stop but those two properties and we are very conscious.

[laughter].

To highlight the value of the company and provide more transparency for investors.

But short medium and long term.

We believe that really dot com is a tremendous property you could say that lead growth and audience is far superior to that.

Zillow at the moment, if you take the independent common school.

Figures from September .

You dig uses a real dot com rub, 70%, well Zillow group with only 2% and truly are actually shrunk shrank by 2% [noise].

And the divergence was even [noise].

All mounted on desktop with a 10% of grows it real true zeolite down about 12% year on year, where are the very early stage of the evolution of the digital real estate market.

In the United States, and we think as it evolves or those margins will surely incruse and trying to I think I'll I'll just add to that that part of the reason in the rationale for acquiring cici was to accelerate revenue growth going forward and provide an opportunity to match for margin expansion via ancillary revenues and different said.

And so we would expect to see for the balance at this year and I fully that revenue and EBITDA will continue to grow we did not business.

Thanks Frazier.

Eduardo we'll take our next question.

Right well now take enough cushion problem, Craig Huber Huber research partners once again.

Yes, Hi can you hear me this time.

Yes, let me take your I've no idea what happened there.

Let's have two questions, Mike, but housekeeping question.

Circulation revenue across.

Dow Jones, Australia in the UK with or without currency did you give that maybe I missed it but that's my first question and my second question. Robert You mentioned I think what people agree with you on this.

There's two large monopolies out there.

On the digital advertising front I'd like to hear from you. If you could just expand upon this what do you think the solution is on that front.

[noise] Craig just in relation to your housekeeping question say circulation at Dow Jones was up 6% in the UK flat fitting report should numbers down 5% and as a strike it was down 2% in local currency reported down [noise].

[noise] Craig obviously, the tick topography is evolving very quickly if you think back to even 12 months ago, the prospects of Facebook paying for content to carriage fee as we called inside Rupert.

It was the first to cite that as a day the prospect same remote it's now real.

And what were finding generally you now discussion with the digital platforms is that that they have indeed adopted.

Do you approached I realize that for various reasons that the Pos policies were unsustainable, but does that make clear to you. It's not just about paying a premium for premium journalism. It is also about sorting out what is an a pipe advertising market.

No doubt that the regulatory pressure in that area is finally going to increase.

By the consequences that Oh, I suspect be that.

That's where we're already seeing more advertisers I understand how dysfunctional that market is and seek association with high quality content and we will undoubtedly be a beneficiary of that given the excellent journalism, we have not only in this country, but around the world.

Thank you Craig a Eduardo we'll take our next question.

Once again, if you like to ask the question just please press star one or telephone keypad, when they'll just pause for just a moment.

[noise]. It appears there were no further questions at the sound like the turn the conference back to Michael floor and for any additional color frameworks.

Great. Thank you Eduardo and thank you for all participating we look forward to talking just have a great day.

Not for today's call. Thanks for your participation you may now disconnect.