APN FY 2011 Results

APN NEWS & MEDIA LIMITED - RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2011

Ticker: (Bloomberg) INM.ID/ INM.LN and (Reuters) INME.I/ INME.L

Second half recovery

·; Net Profit after Tax before exceptionals of $78m

·; Reported Net Loss after Tax of $45m following H1 impairment charge

·; Outdoor delivers strong growth - EBIT up 31%

·; Radio grows market share in Australia and New Zealand

·; Publishing costs reduced by $25m annualised

·; Final dividend of 5 cents per share, of which 1.5 cents is franked

·; Major Outdoor initiative announced

Dublin/London - 23rd February 2012: APN News & Media Ltd ['APN'], in which Independent News & Media PLC ['INM'] has a 30.4% shareholding released its result for the 12 months ended 31 December 2011. Revenue was up 1% to $1,072m, Earnings Before Interest and Tax (EBIT) was down 17% to $171m and Net Profit After Tax (NPAT) before exceptional items was down 24% to $78m, in line with guidance.

Taking into account the non-cash impairment charge of $159m announced in August 2011, costs associated with restructuring and other charges, the Company reported a Net Loss After Tax of $45m.

2011 Full Year Result

* before exceptional items based on segment reporting

APN Chief Executive Officer Brett Chenoweth said: "Over the past year, I made a number of commitments to the market about the performance of the business and our immediate goals. I am pleased to report that we have delivered on those commitments.

"We met our guidance for net profit before exceptional items and for EBIT.

"In challenging market conditions, including the impact of natural disasters, we grew revenue by 3% in local currency terms. This emphasises the resilience of our assets and the product innovations that we have introduced. Trading in the second half showed a marked improvement on the first six months, notwithstanding a weak NZD/AUD exchange rate.

"We promised a cost reduction program in publishing to deliver annualised savings of $15m and we have achieved savings of more than $25m on an annualised basis. And there will be more to come. More broadly, major advances have been made in operational efficiencies and cost management across the entire group. These will be fundamental to APN's ongoing success.

"We committed to rejuvenate our publishing business model. The New Zealand Herald titles have delivered market leading circulation and readership growth. We have appointed new management teams, removed costs through centralisation of services and have adopted an integrated multimedia approach. Importantly, APN's publishing assets remain highly cash generative.

"We announced plans to rationalise our printing operations and have gone from eleven plants to eight.

"We undertook a strategic review of our outdoor division and today we announce a joint venture with Quadrant Private Equity to capitalise on the strong growth prospects in this sector (see separate release). APN Outdoor produced an enviable result. The business continues to outperform the market across all of the major outdoor categories. Local currency revenue grew 13%, and local currency EBIT was up 33%.

"We set a goal to improve our radio ratings and market share. We finished 2011 with our best 25-54 audience ratings in three years in Australia and the top-rating network in New Zealand, growing advertising market share in both countries.

"Finally, we committed to invest in new digital revenue streams. We have strengthened our portfolio, and our interests in GrabOne, CC Media and others are performing strongly, with excellent growth prospects.

"The 2011 financial year was one of the most challenging this Company has faced. However, through our targeted program of cost management, product development and changing how we conduct our businesses, we are now in a stronger position to take the next steps in the Company's development."

* Includes businesses acquired during the year

Australian Regional Media

APN appointed Warren Bright as CEO of Australian Regional Media and strengthened the management team of the division.

The division's greatest exposure is to the Queensland market, which was severely affected by widespread flooding and cyclone Yasi, as well as a significant downturn in the tourism industry. Growth in the resources sector produced good outcomes in service centres such as Mackay and Gladstone. However, other regions felt the same effects of low consumer confidence and restrained levels of commerce that were experienced elsewhere in Australia. This had a significant net impact on the division's overall result.

Sustainable cost reduction was achieved across the division following a detailed review of all business operations, with a particular focus on improving productivity and efficiency in the commercial and editorial operations. Costs in 2011 were flat and comparable costs are expected to fall 3% in 2012.

The rollout of a centralised advertising services bureau in Brisbane has been completed. The vast majority of creative work and prepress for each of the regional operations is now undertaken at this specially designed facility. Overall production headcount is down 24%, with annual savings of $1.5m. Productivity per team member improved by more than 30%.

Also, the editorial production of each of the daily and non-daily newspapers has been centralised at the Centro Sub-Editing facility on the Sunshine Coast.

In two centres, Tweed Heads and Coffs Harbour, APN has adopted a digital first strategy, with the emphasis on reporting breaking news online and on mobile sites, supported by print publications twice a week. Since the conversion at the start of 2012, cost savings have exceeded revenue foregone by nearly 30%.

With a strengthened organisational structure, focus will continue on cost management, product development and improved productivity.

New Zealand Media

APN News & Media's portfolio of publishing brands in New Zealand leads the market in online, newspapers and magazines.

The division has a weekly brand audience of 2.6m people, with the country's best selling daily newspaper (The New Zealand Herald), award winning news site (nzherald.co.nz), highly read national magazines (The New Zealand Woman's Weekly, The Listener) and popular regional titles.

The New Zealand Herald strengthened its market position, building circulation, readership and online penetration. In the 12 months to December 2011, circulation was up for both The New Zealand Herald and The Herald on Sunday. The Herald portfolio has achieved the strongest circulation performance of any daily newspaper in Australia or New Zealand. This very positive result was driven by 3.4% growth in The New Zealand Herald subscriber base to almost 60% of baseline sales. The Herald on Sunday remains the most read Sunday newspaper in its target market.

The digital audience continues to grow. The Herald's apps for tablets and smart phones attracted 179,171 visitors in December 2011 and more than 7m page views. The nzherald.co.nz website reached 62% of the total online audience in New Zealand during 2011, with high levels of engagement.

Further efficiency gains were achieved with the completion of the centralised booking and production of advertising in Auckland. Staffing in media services has reduced by 35% in the past three years.

New Zealand Media will continue to develop its multimedia products, leveraging the strength of The New Zealand Herald brand across the portfolio. An ongoing review will focus on extending cost disciplines.

Radio

The Australian Radio Network (ARN) and The Radio Network (TRN) in New Zealand produced strong results and built advertising market share on the back of excellent audience ratings.

The radio industry performed well in Australia and New Zealand in 2011. APN outperformed in both markets through improved programming that is now attracting proven on-air talent.

In Australia, ARN's markets grew 0.9% over the prior year. At the same time, ARN increased revenue and EBIT by 5%, gaining market share in both direct and agency advertising. This growth was particularly strong in the last quarter and has continued into 2012.

The strong support from advertisers followed good gains in audience ratings for the two core brands: Mix and Classic Hits. ARN's goal is to be the number one network among 25-54 year olds in all of its markets. The network ended the year with its highest share of the 25-54 audience since 2008, up 4.6% to a 18.1% share.

The growing penetration of digital radio across Australia also offered new commercial opportunities. ARN's smart phone apps were downloaded 690,000 times, increasing the networks' broadcasting reach through this new channel. The network also launched its first in-store digital radio station in partnership with a major client. ARN continues to explore new product innovation opportunities.

In 2012, the network will focus on increasing market share, as well as improving yield and expanding margins.

In New Zealand, the radio market as a whole returned solid growth in challenging economic conditions, and TRN revenues outgrew the market. The business achieved 4% revenue growth in local currency terms.

Again, a strong performance in agency advertising was achieved on the back of consistently good audience ratings results. TRN's market-leading NewstalkZB network maintained its number one 10+ national audience position. For the first time, NewstalkZB was number one in each of the country's three major cities at the same time: Auckland, Wellington and Christchurch. In the commercial capital of Auckland, TRN broadcasts four of the top five stations.

TRN networks maintained their leadership in the 10+ audience, with three of the top five networks. It also achieved two of the top three 25-54 networks.

During the year, NewstalkZB moved from the AM band to FM in six major markets, including Auckland, Wellington, Christchurch and Hawkes Bay. The transition was immediately successful, growing the audience and strengthening its reach to a younger demographic.

TRN made significant investments in digital platforms and capabilities. The network relaunched its eight websites, with improved interactivity and greater social media connections. The number of unique browsers increased 25% and online revenue grew 38%. TRN also released smart phone apps for its leading brands: NewstalkZB, Classic Hits, ZM and Hauraki. The rapid adoption of this new channel to market lays the foundation for good future digital growth.

TRN's immediate imperative is to build on its current momentum with improved ratings and market share, as well as grow digital revenues.

Outdoor

In Australia, APN Outdoor grew market share across all major formats, building on its position as market leader in billboards, posters, street furniture and transit.

Since 2002, the Australian out-of-home industry as a whole has grown 91%. APN has been a driving force behind that growth, taking part in industry consolidation as well as being a key supporter of the development of the MOVE audience measurement system.

The division renewed key contracts, including Brisbane transit and the Perth airport external contract, as well as winning the tender for the airport's internal signage. In Melbourne, Adshel secured the Yarra Trams street furniture contract and is now the leading street furniture supplier in Australia and New Zealand.

Advances in digital technology continue to be introduced. Brisbane's first digital billboard is due to be installed in the first quarter of 2012, with significant interest being generated among clients. Also, APN Outdoor rolled out sponsored Wi-Fi on Melbourne trams as part of clients' promotional campaigns targeting commuters, as well as the launch of virtual supermarkets in Sydney and Melbourne train stations.

Adshel expanded its interactive Create initiative, where consumers use their mobile devices to access additional information about an advertiser's product through digitally-enabled street furniture panels.

In New Zealand, the division returned solid results, with the Rugby World Cup providing good promotional opportunities for clients.

Following the 2011 acquisition of the OGGI outdoor business, APN is the leading billboard operator in New Zealand, growing market share across the year. More than 100 new sites were successfully integrated into the division's inventory, predominantly in the commercial capital of Auckland.

In Hong Kong, APN is the leading billboard provider in the market and the sole contractor for buses on Hong Kong Island. A strong outcome from the banking, finance and telco sectors helped deliver good advertising growth, up 21% in local currency terms, with solid forward bookings into 2012. The web-bus initiative has been a stand out in that market. The Indonesian market also produced good revenue growth, up 12% in local currency.

Digital

APN has invested to increase greatly its digital capabilities. The Company built significant digital revenue and earnings momentum during FY11.

APN's new digital team is implementing a digital strategy with a dual approach to:

·; Expand digital capabilities in existing assets, particularly mobile, video, social, ad product and data analytics

·; Continue to build a portfolio of high growth new digital ventures, including GrabOne and CC Media

In 2011, APN increased its investment in GrabOne and took controlling equity positions in Catalogue Central Media and Jimungo. The Company exited Eventfinder (New Zealand) and Finda (Australia) as they were inconsistent with ongoing strategy; however, APN continues to use the digital platform developed for Finda to underpin its regional websites, including GrabOne.

APN joined digital incubator Pollenizer to explore new opportunities alongside APN assets, including a seed investment in the social media recommendations venture Friendorse.

GrabOne remains New Zealand's leading online daily deal site with approximately 70% market share. In 2011, GrabOne sold more than 2.1m coupons valued at $51m. It expanded rapidly from a deal per day in Auckland, to more than 100 deals per day in three countries and 23 regions. GrabOne created seven verticals, (e.g. escapes, home and gardens), and launched GrabOne Instant. APN plans to build on GrabOne's strong foundations by growing into additional small-to-medium business digital marketing services and additional geographies in Australia.

CC Media is Australia's leading online retail performance network. Its INC digital distribution network reaches around 6m unique viewers per month and for the 2011 Christmas period CC Media delivered more than 2.2m digital catalogue engagements for retailers.

Digital achievements across APN's divisions reflect the new momentum created by the digital team and reaffirm our strategy of applying group leadership to emerging areas of expertise. Examples include the launch of 27 regional mobile sites and rapid growth in video audience (up 66%) and video advertising (up 100%) on The New Zealand Herald's sites.

This is also contributing to a substantial increase in digital revenue and earnings momentum. For example, our GrabOne business more than doubled its revenues between H1 and H2. Both GrabOne New Zealand and CC Media are now profitable.

Cash Flow

Cash flow conversion was again very strong, demonstrating the high cash generative nature of our portfolio. The ratio of EBITDA to operating cash flow exceeded 100%.

Dividend

The Board has declared a final dividend of 5 cents per share, of which 1.5 cents is franked, payable on 30 March 2012 (record date of 8 March 2012). The Dividend Reinvestment Plan remains in place with a 2.5% discount.

Market Update

The advertising market in Australia and New Zealand remains mixed.

Across our publishing divisions we are seeing the benefit of the $25m of annualised cost savings implemented in 2011.

We continue to enjoy resilient performances from our Australian outdoor and radio businesses. However, New Zealand remains behind prior year comparisons that preceded the impact of the Christchurch earthquake.

We will provide a further update to trading at the Annual General Meeting in May.

-- ENDS -

For further information, please contact:

Gavin O'Reilly Chief Executive Officer +353 1 466 3200

Donal Buggy Chief Financial Officer +353 1 466 3200

Karl Brophy Director Corporate Affairs and Content Development +353 1 466 3200

APN NEWS & MEDIA LIMITED

PRELIMINARY PROFITS ANNOUNCEMENT

Income Statements translated at Average Rates

Average Exchange Rate 2010 €1 = A$1.4432

Average Exchange Rate 2011 €1 = A$1.3483