14th Aug 2007 07:00
Independent News & Media PLC14 August 2007 APN NEWS & MEDIA LIMITED - RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 APN Interim Profit up 5% to $73.2 million Second Half growth set to accelerate APN News & Media Ltd ('APN'), in which Independent News & Media PLC ('INM') hasa 38.3% shareholding, today announced a record interim Net Profit After Tax andbefore non-recurring items (NRI) of A$73.2 million for the six months ended June30 2007, up 5% on the prior year. H1 Results pre NRI $A million GrowthRevenue and other income* 633.7 +2%EBITDA** 160.4 +3%EBIT** 142.4 +3%NPAT 73.2 +5%Earnings Per Share 15.4c +4% *Excludes finance income and businesses disposed/closed in the prior year. **Excludes businesses disposed/closed in the prior year. The Directors have today declared an unfranked interim dividend of 10.5 centsper share, up 8% on the prior year. APN Chief Executive Brendan Hopkins said: "This is a solid outcome for the firsthalf of the year. While trading conditions in New Zealand were subdued,Australian Publishing continued to perform well, due in part to the ongoingstrength of the Queensland economy. The Outdoor division recorded a verypleasing 33% increase in EBIT, demonstrating the value of our market leadingbrands. "The second half of the year is traditionally our busiest trading period and weare well placed to profit from changes that have been made to our business modeland the ongoing growth of our portfolio of assets across a broad range ofeconomies and geographies. "Cost management has been a priority across the Group, with cost growth in localcurrency being limited to just 2% despite significant increases in newsprintprices. "The period saw significant investment in two areas of our business. First, APNcontinues to invest in its Online Division, building new assets and formingstrategic joint ventures that expand our offering to advertisers and toaudiences. Secondly, the Company has almost completed the process of redefiningits business model, requiring investment in new business systems, facilities andtraining that transforms the way we operate in our markets. "The new business model has initially focused on the Company's Publishingdivisions but will broaden its scope to bring subsequent benefits to Radio,Outdoor and Online. Already there has been a significant reduction in staffingrequirements and an improvement in production efficiencies. The gains from thenew business model have already been seen in July trading and will continuethroughout the second half, with full benefits to be seen in 2008/09." Divisional EBIT results All of the Company's divisions recorded EBIT growth in the first six months ofthe year. +----------------------------------+---------------+---------------+-----------+|APN Group EBIT pre NRI (AUD |June 30 2007 |June 30 2006 |Reported ||million) | | | |+----------------------------------+---------------+---------------+-----------+| | | |Growth % |+----------------------------------+---------------+---------------+-----------+|Publishing | 107.7 | 104.9 | 3% |+----------------------------------+---------------+---------------+-----------+|Regional Publishing | 59.5 | 56.9 | 5% |+----------------------------------+---------------+---------------+-----------+|New Zealand National Publishing | 48.2 | 48.0 | 1% |+----------------------------------+---------------+---------------+-----------+|Radio | 36.5 | 35.9 | 2% |+----------------------------------+---------------+---------------+-----------+|Outdoor | 9.2 | 6.9 | 33% |+----------------------------------+---------------+---------------+-----------+|Corporate & Other | (4.8) | (5.1) | (7%)|+----------------------------------+---------------+---------------+-----------+|Group EBIT pre New Product | 148.6 | 142.6 | ||Initiatives (NPI) | | | |+----------------------------------+---------------+---------------+-----------+| | | | 4% |+----------------------------------+---------------+---------------+-----------+|NPI | (6.2) | (3.7) | |+----------------------------------+---------------+---------------+-----------+|Online | (4.9) | (1.8) | |+----------------------------------+---------------+---------------+-----------+|Other | (1.3) | (1.9) | |+----------------------------------+---------------+---------------+-----------+|Group Trading | 142.4 | 138.9 | 3% |+----------------------------------+---------------+---------------+-----------+|Businesses disposed/closed | - | 1.4 | |+----------------------------------+---------------+---------------+-----------+| Total | 142.4 | 140.3 | 2% |+----------------------------------+---------------+---------------+-----------+ Regional Publishing APN publishes 23 regional daily newspapers and more than 100 non-daily andcommunity titles across high growth markets in Australia and New Zealand. TheRegional Publishing division recorded EBIT growth of 5%, on top of good growthin the previous corresponding period. In Australia, the continuing strongresource sector and superior growth in tourism provided robust tradingconditions in our local markets. Revenue was up double-digit, led by stronggrowth in retail advertising and an outstanding result in national advertising. Unemployment in Queensland continues at 30-year lows, which is again reflectedin double-digit growth for employment advertising. The extension of ouradvertising offering to clients, including online packages and job exhibitions,has also been well received. The division continues to make strategic acquisitions and, as announced at theCompany's Annual General Meeting, completed the acquisition of ToowoombaNewspapers, bringing The Chronicle in Toowoomba and a number of importantnon-daily and community titles fully into the company's portfolio of assets. New publishing products continue to be developed, taking advantage of the glosscolour capacity now available from the new press centre at Yandina. Inparticular, gloss colour property sections are now produced for nine newspapers,delivering double-digit growth in real estate advertising. More than 20different publications and colour sections are now printed at Yandina as readersand advertisers continue to benefit from the Group's investment in world-leadingprinting technology. Trading conditions in regional New Zealand were subdued; however, new productdevelopments continue to be well received by advertisers and readers. New glosscolour property sections across a number of titles helped grow real estateadvertising. Similar to Australia, unemployment in New Zealand is atgenerational lows, and double-digit growth in employment advertising wasachieved. New Zealand National Publishing (NZNP) NZNP comprises The New Zealand Herald, Herald on Sunday, The Aucklander and NewZealand Magazines. The division leads the major Auckland market, with 8 out of10 Aucklanders reading at least one APN title each week. Trading conditions remain challenging; however, growth in revenue and EBITcontinues to be positive. Costs were flat despite a 6% increase in the cost ofnewsprint, showing the early benefits of the business restructuring programme. The New Zealand Herald has the highest readership of any daily newspaper in thecountry and undertook a number of strategic new product developments in thefirst half, including new Metro Pages, Green Pages and The Business. The Herald on Sunday, which launched in October 2004, has now moved intoprofitability. It is the most read Sunday newspaper in Auckland and continues tomake good gains in advertising market share. Combined with the Weekend Herald -the biggest selling newspaper in New Zealand - the publications reach 86% ofweekend readers in Auckland. A number of new sections were launched in the firsthalf, maintaining readership and advertising momentum. The New Zealand Woman's Weekly continues to be the best read weekly magazine inthe country, growing circulation by 1.5% in the first half, leading the women'smagazine category. Similarly, the Listener grew its circulation in the currentaffairs category, and Creme magazine recorded an exceptional 22% increase incirculation in the 12 months to June 2007. Online APN continues to invest in its Online Division, developing products that extendexisting APN brands, as well as identifying joint venture partners forstandalone internet opportunities. The nzherald.co.nz website grew advertisingrevenue in the first half by 75% on the previous corresponding period. The sitenow generates more than 7 million page impressions from 500,000 unique browserseach week. It is the third most visited website in New Zealand and the mostpopular news site, receiving the best news website award in the Qantas MediaAwards. The investment phase continues for the 'Search 4' classifieds brand, which isbeing extended for cars, jobs, property and general classifieds across NewZealand and Australia. Search4jobs is a strong second in the New Zealand onlineemployment market, where audience growth flattened in the last quarter.Search4cars and Search4stuff are both building good audience numbers inQueensland, while the Worksearch jobs site has provided an important complementto our newspaper employment sections across northern NSW and Queensland. The Sunshine Coast Daily's website was relaunched as thedaily.com.au and hasbeen well received by the local community, with other site relaunches beingplanned. The New Zealand joint venture classified site sellmefree continues tobuild volumes and is increasing market share. The joint venture finda hassuccessfully consolidated and transformed APN's existing UBD businesses, withthe online directory including more than 270,000 listings, now the largestonline directory in New Zealand. Radio The Radio Division comprises the Australian Radio Network (ARN) and The RadioNetwork (TRN) in New Zealand, which together reach almost 6 million listenerseach week - the largest radio audience in Australasia. Overall, EBIT grew 2% to$36.5 million. In Australia, the network's two music streams of Classic Hits andMix continued to focus on their core demographic of 25-54. The Classic Hitsnetwork in particular continues to show good returns, increasing share of agencyadvertising in key markets, and Mix has increased its cumulative 10+ audienceacross the 2007 surveys to date. Tight cost management helped deliver a 3%increase in EBIT for ARN. In New Zealand, EBIT moderated as costs rose,reflecting new licences and sales related costs. TRN remains the market leaderin New Zealand radio, with the number 1 stations in Auckland and Christchurchand number 2 in Wellington. TRN has a combined 45% share of all audiences aged10+, well ahead of its nearest competitor. Outdoor APN Outdoor operates the market leading brands in each of the main outdooradvertising categories in Australia and New Zealand. The division produced avery strong 33% increase in EBIT to A$9.2 million, building on the acquisitionof a number of major new contracts, including Christchurch Airport and VicRoads. Adshel was also successful in retaining the Melbourne Street Furniturecontract, the largest contract of its type in Australia. Buspak introduced new formats which have been well supported by advertisers. Newdigital panels were also introduced in Australia and are due for rollout in NewZealand. In Asia, operations continued to grow. In Hong Kong, the Company'stransit business benefited from a renewed focus on new product development andnew revenue streams. The success achieved in the first half of 2007 across theOutdoor division is expected to continue in the second half. Capital management At the recent AGM the Company announced it would continue the share buy-backprogram commenced in 2005. By the end of last year, 55 million shares had beenbought back. During the period the balance of the 63 million convertible notes issued in 2001as part of the acquisition funding for Wilson and Horton were converted orredeemed. The buy-back has, and will continue to help ensure that the Company'scapital is efficiently managed to enhance returns to shareholders. The Company is in a sound financial position, with access to capital forworthwhile growth opportunities. Outlook The Company continues to believe that second half growth will be in line withexpectations outlined at the recent Annual General Meeting. Growth in Net Profit After Tax of between 5% and 10% is likely for the year. ENDS. Tuesday, 14th August 2007 For further information, please contact: Gavin O'Reilly Chief Operating Officer +353 1 466 3200Donal Buggy Chief Financial Officer +353 1 466 3200 +------------------------------------------------------------------------------+|Media |+-------------------------+------------------------+---------------------------+|Pat Walsh |Rory Godson |Paul Keary |+-------------------------+------------------------+---------------------------+|Murray Consultants |Powerscourt Media |Financial Dynamics (New ||(Dublin) |(London) |York) |+-------------------------+------------------------+---------------------------+|Tel: +353 1 498 0300 |Tel: +44 207 236 5619 |Tel: +1 212 850 5600 |+-------------------------+------------------------+---------------------------+|Investors and Analysts |+------------------------------------------------------------------------------+|Mark Kenny/ Jonathan Neilan |+------------------------------------------------------------------------------+|K Capital Source (Dublin) |+------------------------------------------------------------------------------+|Tel: +353 1 631 5500 |+------------------------------------------------------------------------------+|Email: [email protected] |+------------------------------------------------------------------------------+ +------------------------------------------------------------------------------+|About APN |+------------------------------------------------------------------------------+|APN News & Media Limited ASX, NZX:APN is the largest media company in New ||Zealand, where it owns The New Zealand Herald, the country's largest ||newspaper. APN is the largest radio and outdoor advertising operator in ||Australasia as well as Australia's leading regional publisher. APN is a leader||in online in both New Zealand and in Queensland and has been listed on the ||Australian Stock Exchange since 1992, and on the New Zealand Stock Exchange ||since June 2004. |+------------------------------------------------------------------------------+| |+------------------------------------------------------------------------------+ APN NEWS & MEDIA LIMITED INTERIM PROFITS ANNOUNCEMENT A$000 A$000 €000 €000 30 June 2007 30 June 2006 30 June 2007 30 June 2006 Revenue 601,331 606,053 365,617 365,996 ========= ========= ========= ========= OperatingProfit- Continuing 139,995 137,738 85,119 83,180Operations- Exceptional (2,207) 4,234 (1,342) 2,557Items --------- ----------------- --------- ---------- Profit from 137,788 141,972 83,777 85,737ContinuingOperations Net Finance (30,713) (32,569) (18,674) (19,668)Charge Share of 2,426 2,523 1,475 1,524Profit of ------- ----------- ------- ----------Associates Profit on 109,501 111,926 66,578 67,593OrdinaryActivitiesbeforeTaxation Taxation (17,671) (24,403) (10,744) (14,737) ---------- ---------- ---------- ---------- Profit on 91,830 87,523 55,834 52,856OrdinaryActivitiesafterTaxation Minority (19,352) (15,397) (11,766) (9,298)Interests ---------- ---------- ---------- --------- ProfitAttributable === === === ===to Members ofthe ParentEntity 72,478 72,126 44,068 43,558 ======== ======== ======== ======== Basic 15.2 15.3 9.2 9.2Earnings per ====== ====== ===== =====Share (cents) Diluted 14.9 14.7 9.1 8.9Earnings Per ====== ====== ===== =====Share (cents) Profit & Loss Accounts translated at Average Rates Average Exchange Rate 2006 €1 = A$1.6559 Average Exchange Rate 2007 €1 = A$1.6447 APN NEWS & MEDIA LIMITED GROUP BALANCE SHEET A$000 A$000 €000 €000 30 June 31 December 30 June 31 December 2006 2006 2007 2007 Current AssetsCash and Cash 69,349 70,681 43,547 42,248EquivalentsReceivables 225,219 223,702 141,425 133,713Inventories 22,051 21,939 13,847 13,114Tax Assets 34,896 24,861 21,913 14,860Other 25,036 28,120 15,721 16,807 -------- ---------- -------- ----------Total Current Assets 376,551 369,303 236,453 220,742 --------- --------- --------- --------- Non-Current AssetsReceivables 10,304 7,174 6,470 4,288Other Financial Assets 30,946 22,696 19,432 13,566Investments Accounted forUsing the Equity Method 24,408 25,703 15,327 15,363Property, Plant and 301,930 292,605 189,595 174,898EquipmentIntangible Assets 1,852,878 1,740,614 1,163,503 1,040,415Deferred Tax Assets 35,905 36,471 22,546 21,799 -------- -------- -------- --------Total Non-Current Assets 2,256,371 2,125,263 1,416,873 1,270,329 ----------- ----------- ----------- ----------- --- --- --- ---Total Assets 2,632,922 2,494,566 1,653,326 1,491,071 ----------- ----------- ----------- ----------- --- --- --- ---Current LiabilitiesPayables 161,219 197,295 101,236 117,929Derivative Financial 3,037 3,418 1,907 2,043InstrumentsInterest Bearing 94,446 89,414 59,307 53,445LiabilitiesCurrent Tax Provisions 13,822 5,299 8,679 3,167Provisions 13,161 14,108 8,264 8,433 -------- ---------- ------- -----------Total Current 285,685 309,534 179,393 185,017Liabilities --------- --------- --------- --------- Non-Current LiabilitiesPayables 5,420 5,558 3,403 3,322Interest Bearing 810,336 801,593 508,845 479,135LiabilitiesDeferred Tax Liabilities 205,897 203,380 129,292 121,566Provisions 2,152 2,159 1,351 1,290 ------- ----------- ------- -----------Total Non-Current 1,023,805 1,012,690 642,891 605,313Liabilities ----------- ----------- --------- --------- --- ---Total Liabilities 1,309,490 1,322,224 822,284 790,330 ----------- ----------- --------- --------- --- ---Net Assets 1,323,432 1,172,342 831,042 700,741 ----------- ----------- --------- --------- --- ---Equity --- ---Contributed Equity 972,358 817,579 610,586 488,690Other Reserves 39,439 25,497 24,766 15,239Retained Profits 59,151 86,559 37,143 51,739 -------- ------------- -------- ----------Total Parent Entity 1,070,948 929,635 672,495 555,668InterestMinority Interests 252,484 242,707 158,547 145,073 --------- ------------ --------- --------- --- --- --- ---Total Equity 1,323,432 1,172,342 831,042 700,741 ----------- ----------- --------- --------- Balance Sheets translated at Closing RatesClosing Exchange Rate December 2006 €1 = A$1.6730Closing Exchange Rate June 2007 €1 = A$1.5925 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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