JAMAICA’S biggest media entity, Radio Jamaica Limited — the parent company of Television Jamaica, The Gleaner and a host of radio stations and cable entities — will be consolidating its group structure, flattening its management structure and driving digital product growth in a bid to not only return to profitability, but remain relevant in a world that is seeing a significant shift in content consumption.

March 2022 was the last year that the Radio Jamaica, which operates under the marketing name RJRGleaner Group, recorded a consolidated net profit which was $341.69 million. Since then, media group has not reported a normalised net profit with the 2023 financial year (FY) reflecting a $250.34 million consolidated net profit that was influenced by a $444.20 million fair value gain on the purchase of 1834 Investments Limited.

RJRGleaner’s recently concluded March 2024 FY saw it recording a $528.75 million consolidated net loss which was influenced not only by flat revenues and higher operating expenses, but also a $112.96-million impairment provision on its trade receivables as per accounting provisions regarding delayed payments past a particular period.

The RJRGleaner Group has had to contend with digital advertising and non-traditional competitors creeping more into its advertising space which has been compounded by an economy impacted by high interest rates and elevated inflation. This also happens at a time when consumption preferences have also shifted dramatically as well.

As a result, several changes will be coming for the RJRGleaner Group in the coming months and years as it takes a digital first approach to business.

“We want to build and continue to build a modern, agile organisation with strong brands focused on fulfilling customer needs. We are building a digital first culture and embracing it with changes in the market, changes in behaviour. We intend to grow digital revenue by more than 30 per cent per year for the next three years,” said Anthony Smith, chief executive officer (CEO) of Radio Jamaica, at the company’s 76th annual general meeting (AGM) held on Wednesday at the Terra Nova Hotel.

As part of the company’s plan to cut down on its cost and complexity, the RJRGleaner Group will be executing a scheme of arrangement to reduce the number of companies in the overall group from 13 to three entities. Some of the company’s radio brands and other branded entities are held through different entities. Apart from Radio Jamaica, Television Jamaica Limited and The Gleaner Company (Media) Limited will likely be the other two surviving entities.

RJRGleaner will also be winding up the defined benefit pension scheme and will give the option to pensioners to join the defined contribution scheme.

Another cost-saving measure will be the flattening of the group management structure to create more agility in the group. The roles of deputy CEO – broadcast and content strategy, which was held by Dr Claire Clarke Grant, and chief people officer which was held by Tanya Smith-Anderson, were made redundant on October 1. The role of deputy CEO – print and digital strategy, which was formerly held by Smith, was also eliminated.

RJRGleaner recently onboarded Beverly Thompson as its head of digital business, while the company added a digital product manager in January as part of its initiative to drive digital revenue into the group. This will be done by leveraging digital assets in the group to create new revenue streams which will fall under the transformation office.

Some of the new revenue streams will also come from tapping the diaspora connections which will include a diaspora top-up and travel website. More details on these plans will be announced in the coming weeks.

The biggest new revenue stream will come from a partnership between RJRGleaner and National Commercial Bank Jamaica Limited (NCBJ) dubbed ‘NCB GO’ which was announced in Wednesday’s
Gleaner publication. This partnership will see NCB debit and credit cardholders earn loyalty rewards from participating merchants across the island while offering merchants the ability to access a fully managed, fully automated, ready-to-go rewards programme without the need to develop their own solution.

“NCB takes pride in announcing our strategic partnership with RJRGLEANER Group and Go Beyond Group, a landmark agreement that underscores our commitment to innovation and customer-centricity. We are continuing to invest in innovative solutions that enhance the experiences and benefits realised by both our merchants and customers,” stated Bruce Bowen, NCBJ CEO, in the release.

The technology for NCB GO was developed by Go Beyond Group LLC, which is a fintech in reward-based solutions that will license the underlying technology to Jamaica Holdings LLC, RJRGleaner’s 50 per cent associate, which operates the Gustazos deal platform.

Another avenue being pursued for revenue growth is to increase lease revenue at the Gleaner’s 7 North Street offices. Smith noted that Gleaner team members were moved from the third floor to the fifth floor as they seek to lease that floor of the building to tenants now. Consolidation of another floor is also a possibility that can be explored to bring in revenue from another floor.

These initiatives will be underpinned by a change in the culture and mindset to a one-family culture which will involve more leadership training and cohesiveness among staff. All of these changes will be measured and structured which will be supported through PWC. The company will also be moving to roll out out NextGen TV (digital TV), which will result in additional television channels and new revenue streams.

It will take some time to see the impact of these changes in the financials which still paint a tough operating market. While consolidated revenue fell seven per cent to $1.20 billion for the first quarter (April to June), Smith noted that the recently held 2024 Summer Olympics saw advertisers hold back on spending until the actual event to maximise their dollars and exposure.

With a compression in gross profit and relatively unchanged operating expenses, the group’s consolidated operating loss jumped by more than 400 per cent from $31.38 million to $169.87 million. After accounting for finance costs and taxes, RJRGleaner’s consolidated net loss moved up from $37.85 million to $167.48 million.

Total assets were $6.37 billion with fixed assets at $3.25 billion and receivables at $1.13 billion while cash ended the period at $239.68 million. Total liabilities and shareholder’s equity were $2.40 billion and $3.96 billion, respectively.

Radio Jamaica’s stock price closed Thursday at $1.12 which leaves the stock down 43 per cent year-to-date, making it amongst the worst-performing stocks on the Main Market in 2024 with a market capitalisation of $3.37 billion.

While Douglas Orane and Minna Israel were re-elected as directors of the board, Dr Lawrence Nicholson did not seek re-election automatically retired as a director at the end of the AGM. Dr David McBean was elected as a director by the shareholders.

Radio Jamaica also changed auditors from KPMG to Baker Tilly Lafayette Strachan who were confirmed as auditors by the company’s shareholders. Chairman Joseph M Matalon noted that the company’s external auditor option was put to tender with Baker Tilly winning the role. This is the latest company to change KPMG as its auditors with IronRock Insurance Company Limited to change from KPMG to PricewaterhouseCoopers at its December 3 AGM.