Testing times ahead for Packer's CMH

James Packer's Consolidated Media Holdings Ltd has posted a huge first half profit slump but says it's well positioned for a testing second half as it moves away from traditional media.

Consolidated Media's reported $391.54 million net profit for the six months to December 31, which included a one-off non cash gain of $346.5 million, was down 93.5 per cent from $6.04 billion in the prior first half.

However, comparisons are distorted because the prior first half included a one-off gain of $5.088 billion.

Chairman John Alexander said on Friday the company was well positioned for a testing second half for its 25 per cent interest in pay TV operator Foxtel, 50 per cent in Fox Sports owner Premier Media Group (PMG), and 26.7 per cent in online jobs business SEEK.

"Despite the tougher economic environment, the first half equity contributions and cash distributions from our investments in Foxtel, PMG and SEEK are solid as we continue to focus our attention on growth investments and away from traditional media," Mr Alexander said.

"We are no longer exposed to the traditional media cycle."

Consolidated Media reported the $346.5 million accounting gain after all its interest dropped below one per cent in PBL Media - owner of ACP Magazines and Channel Nine - the broadcasting network that laid the foundations of James' father, Kerry Packer.

Excluding PBL Media, net profit from Foxtel, PMG and SEEK - increased five per cent in the first half of 2008/09.

Mr Alexander says subscription revenue growth - the main revenue driver of the pay television investments - increased by 11 per cent at PMG and 18 per cent at Foxtel - and is expected to continue.

"Pay television is relatively sheltered from the advertising cycle, with advertising revenues comprising less than five per cent and 13 per cent of the total revenue of Foxtel and PMG respectively," he said.

The company has $79 million in cash and no bank debt.

Fox Sports will face a challenge in the second half with the impending launch by the Ten Network of a sport multi-channel, ONE.

Consolidated Media says Fox Sports is taking a "sober view" of what to acquire and has already passed on some sporting events, such as swimming.

It will also face production costs related to key sporting events in the second half including the South African cricket tour, 20-20 World Cup and a some Socceroos internationals.

Mr Alexander says SEEK is expected to face a challenging second half but business fundamentals remain strong.

Consolidated Media declared an interim dividend of 10.5 cents, in line with the previous first half.

Its shares were unchanged at $2.00.