Family business roundup: News Corp and Hermes see sales rise
It's been a mixed week for family businesses across the world, with News Corporation and Hermes posting strong results, while ArcelorMittal has seen its profits fall.
New York-based News Corp, the media conglomerate which is 40% controlled by Rupert Murdoch and his sons, said profits jumped 65% during its second quarter to 31 December, increasing to $1.06 billion (€800 million) from $642 million during the same period the previous year.
The group reported sales of $8.98 billion for the quarter, up from $8.71 last year. The growth, which was led by the film entertainment and cable programming divisions, represents a 2% increase on the second quarter of the last fiscal year.
But the company also said the phone-hacking scandal in the UK had cost more than expected and warned it couldn't predict if costs would escalate – it incurred $195 million in costs since the illegal activities of the now defunct British newspaper News of the World were revealed last summer. These were linked to legal fees, settlement costs and the closing of the paper.
In fiscal 2011, News Corp’s revenues rose 2% to $33.4 billion.
In Europe, Hermes, the French luxury group famous for its Birkin and Kelly bags, posted an 18.3% rise in sales during 2011 to €2.84 billion, boosted by increasing demand in the Americas and Asia excluding Japan. Operating margin exceeded 30%, compared to 27.8% last year.
On 8 February, Dunelm Group, the British homewares retailer controlled by the Adderley family, also reported a rise in revenue – it increased 8.8% in the 26 weeks to 31 December 2011, to £299.9 million (€357.9 million) from £275.7 million in the same period last year.
Results at the privately owned company, which started as a market stall selling readymade curtains, were buoyed by the opening of 10 new stores during the six-month period.
In a statement, chief executive Nick Wharton said the company is focused on its growth strategy but remains “cautious about the impact of the UK consumer environment" on its trading.
In contrast to the strong results at News Corp, Hermes and Dunelm Group, ArcelorMittal, which is controlled by India’s Mittal family, posted its lowest quarterly profit in two years. Profits for the three months to the end of December fell to $1.71 billion from $1.85 billion during the same period in 2010.
However, revenues at the Luxembourg-based company, the world’s biggest steelmaker, rose by 8.5% during the quarter to $22.45 billion. The group said it remained optimistic about the first six months of 2012.
