16th Aug 2005 07:05
Independent News & Media PLC16 August 2005 INDEPENDENT NEWS & MEDIA PLC APN NEWS & MEDIA LIMITED - RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2005 Net Profit After Tax Increases 17% to Record A$66.1 million ------------------------------------------------------------- APN News & Media Ltd ('APN'), in which Independent News & Media PLC ('INM') hasa 39.7% shareholding, today announced a record Net Profit After Tax of A$66.1million for the 6 months ended June 30 2005, up 17% on the prior year. Profit Before Tax increased 14% to A$109.4 million, on an increase in GroupRevenue of 10% to A$652 million, and an increase in EBIT, before New ProductInitiatives (NPIs), of 15% to $147.5 million. Basic earnings per share were 13.7cents, an increase of 15%. The Directors have declared a 10% increase in the interim dividend to 8.8 centsper share. APN Chief Executive Brendan Hopkins said: "We believe these are a high qualityset of numbers. Key to the result was the strong first half performance from ourNewspaper and Radio Divisions and an improved performance from Outdoor. "The results are after significant investment in a range of NPIs totaling over$7 million. It is pleasing to report that two of these initiatives, Canvas andTribe Outdoor, are now nearing profitability. The Herald on Sunday, TheAucklander and Buspak Hong Kong represent our principal initiatives in the firsthalf and are expected to continue in their investment phase for another 12 to 18months. "Early results for the second half are as anticipated with underlying growthrates moderating as trading is set against the strong 2004 second halfcomparisons. "The Board of APN continues to believe that, providing current tradingconditions continue, the objective of double digit profit growth for the year asa whole will be achieved." Divisional EBIT Results-----------------------APN Group EBIT (AUD million) June 30 2005 June 30 2004 * % GrowthPublishing 106.5 92.9 15%New Zealand National Publishing 52.7 46.4 14%Regional Newspapers 53.8 46.5 16%Radio 35.3 27.6 28%Outdoor 6.7 6.2 8%Print 2.9 3.9 (27%)Corporate (3.9) (2.1) (86%)Group EBIT (pre-NPI) 147.5 128.5 15%NPI (7.3) (1.6) -Group EBIT 140.2 126.9 10% NPI = New Product Initiatives* IFRS-adjusted New Zealand National Publishing (NZNP)--------------------------------------The NZNP Division was formed in 2004 to enable the Group to co-ordinate astrategy for the Auckland market as a whole, New Zealand's largest metropolitanmarket. The division includes the New Zealand Herald, The Aucklander (launched inOctober 2003), the Herald on Sunday (October 2004), and some of New Zealand'sbest read magazines. Readership penetration of APN products in the Auckland market has increased from56% in 2002 to 68% at June 2005 reflecting the success of the co-ordinatedstrategy. Excluding NPIs, principally the Herald on Sunday and The Aucklander, theDivision grew revenue by 9% and increased EBIT by 14%. Overall revenues,including NPIs, grew 12%. Each week The New Zealand Herald is read by 70% of Aucklanders aged 15+, a totalreadership of 1 million people. The Weekend Herald is New Zealand's best readnewspaper with a readership of 679,000. The launch of the Herald on Sunday in October 2004 extended The New ZealandHerald's franchise to seven days a week. In its first six months, circulationhas exceeded expectations, reaching 101,355 in its first audit, with readershipof 363,000. Readership of Sunday newspapers in Auckland overall has grown by 58%since the launch of the Herald on Sunday. 93% of Herald on Sunday subscriptionsare now fully paid. The Aucklander is New Zealand's largest circulating free weekly title and hasjust been expanded into seven zoned editions. The Aucklander has a readership of453,000 and has now attained advertising market leadership in the food sectorand is making good progress in the areas of retail and employment. The Listener and the New Zealand Woman's Weekly magazines both grew subscriptionlevels in the first half. Creme, New Zealand's fastest growing teen magazine wasacquired during the year.The Auckland market growth has moderated in recent weeks particularly inclassified lineage. In contrast, classified display, national and retailadvertising continues to show volume growth. Regional New Zealand continues toshow good growth across all advertising categories. The recent moderation in classified lineage follows on from three years ofstrong growth. The forthcoming election (September 17th) may also be acontributing factor affecting the Auckland market. Regional Newspapers--------------------The Company operates 23 regional daily newspapers and more than 100 non-dailytitles, which continued to trade well in the first half in both Australia andNew Zealand. Excluding NPIs, revenue increased by 8% and EBIT by 16%. The advertising pillars of employment and real estate recorded strong revenueincreases in both markets. Employment advertising revenues in particularperformed well, growing by 36% in Australia and 30% in New Zealand over theprior period. A strategy to introduce a unified employment section across APN'smain Australian titles - the "Recruitment Superhighway" - under the in-paperemployment banner, "Worksearch", has been well received by readers andadvertisers. New non-daily products were introduced in the high growth SunshineCoast and south-western Brisbane areas, leveraging existing infrastructure inMaroochydore and Ipswich. Circulation of Australian newspapers was up 0.2% in the audit survey for the sixmonths to June - the thirteenth consecutive quarterly circulation increase forthe Group. The group publishes the four fastest growing daily newspapers inAustralia (Mon to Sat Average): The Daily Examiner (3.4%), The Daily Mercury(3.1%), News Mail (2.9%) and the Gympie Times (2.2%) and now own seven out ofthe ten fastest growing newspapers in Australia. Circulation for New Zealand Regional Newspapers was also positive. APN publishesthe two fastest growing newspapers in New Zealand: Bay of Plenty Times (1.6%)and the Wanganui Chronicle (1.4%). Bay of Plenty Times has consistently been thefastest growing newspaper in New Zealand over the past three years. The A$35 million new printing facility announced last year on the Sunshine Coastat Yandina, is on target to be operational mid-2006. This facility will servicethe high growth South East Queensland market well into the next decade. Inconjunction with the press investment, a A$14 million pre-press system upgradeis being rolled out across all Australian regional centres. Whilst Auckland's rate of growth has moderated, we continue to enjoy goodrevenue increases in our regional newspapers in both Australia and New Zealand. Radio------The radio division continues to show good growth. In the six months to June,total revenues increased 14% and EBIT increased a very satisfactory 28%. In Australia, the Australian Radio Network (ARN) continued to reap the benefitof good ratings results in its target 25-54 demographic. Market share of agencyadvertising in the first half performed well and has increased by 56% since June2002. ARN's revenue increased by 14% to A$69.9 million and EBIT was up 30% toA$22.0 million. Combined with its ongoing market leading position in directadvertising, ARN is well placed to continue profit growth into the second half. The Radio Network (TRN) in New Zealand enjoyed good success with the launch ofthe new formats, Coast and Flava into the Auckland market last year, Coast isalready Number 3 and Flava Number 4. TRN continues its aggressive rollout of itseight formats throughout New Zealand. During the half the Company launchedClassic Hits into Central Otago and Coast into Taranaki and Manuatu. EasyListening I was re-branded as Viva in April and has relaunched in Auckland, Bayof Plenty, Hawkes Bay and Rotorua. TRN grew revenue by 13% to A$56.4 million andincreased EBIT by 24% to A$13.3 million. Outdoor--------The restructure of APN Outdoor continued to deliver improved results in thefirst half. Revenue, excluding NPIs, grew by 8% to A$106.2 million and EBIT grewby 8% to A$6.7 million. During the period the group expanded panel numbers and added concessions inAustralia including the prestigious Sydney Airports Corporation, Yarra trams andAdelaide buses. At the same time uneconomic sites and advertising contractscontinued to be renegotiated and rationalised. In New Zealand the street furniture build-out continues, with 3,000 panels nowinstalled nationally. APN Outdoor has been awarded the remaining two out ofthree transit contracts in Hong Kong. The acquisition of the remaining 50% of Look Outdoor in New Zealand wascompleted during the period. The Outdoor Division remains on track for the forecasted improvement in 2006. Print------Revenue in the Print & Specialist Publishing Division declined by 10% to A$44.8million and EBIT declined by 27% to A$2.9 million. The New Zealand print market is presently experiencing an excess of printingcapacity after virtually all participants added to their asset base during thebuoyant trading conditions of the last couple of years. This has resulted inshort-term pressure on margins. APN Print is moving to a full service model, which will mean internal APNactivity will represent an increasing proportion of the division's focus. Share Buy-Back---------------In relation to the on market share buy-back announced during the first half, todate the company has bought back 6 million shares for an aggregate price ofA$31.2 million. Mr. Hopkins said: "We are satisfied with the progress in thefirst two months of the buy-back. We have announced our intention to buy back upto 47 million shares in 12 months, so we are well underway with this importantcapital management initiative. The buy-back will be earnings per shareaccretive." International Financial Reporting Standards--------------------------------------------These results are reported under International Financial Reporting Standards("A-IFRS") for the first time. As part of the changes, comparative financialinformation has been restated in accordance with the transitional arrangementsgoverning the introduction of A-IFRS. The introduction of A-IFRS is expected to have a positive impact on futurereported results, principally relating to the removal of the requirement toamortise goodwill. Whilst the first time adoption of A-IFRS results in some changes to the Group'sbalance sheet it is important to appreciate that A-IFRS will not impact theGroup's cash flows or its capacity to pay dividends. Outlook--------Results for the early weeks of the second half are as expected with underlyinggrowth rates moderating as trading is set against strong second half 2004comparisons. The Board of APN continues to believe that, providing currentconditions continue, the objective of double-digit profit growth for the year asa whole will be achieved.The interim dividend of 8.8 cents per share will be franked as to 30% and ispayable on 27th September 2005. Registrable transfers received by the Company upto the close of business on 13th September 2005 will be registered beforeentitlements to dividends are determined. Books will close on 13th September2005. -- ENDS -- 16th August 2005 (Full details of APN's results (including information on the transition toInternational Financial Reporting Standards) can be found at www.apn.com.au/fileRep/rad815nt.pdf ). For further information:Gavin O'Reilly Donal BuggyChief Operating Officer Chief Financial OfficerIndependent News & Media PLC Independent News & Media PLCTel: +353 (0)1 466 3200 Tel: +353 (0)1 466 3200 Mark Kenny/Jonathan Neilan Pat WalshK Capital Source Murray ConsultantsTel: +353 (0)1 631 550 Tel: +353 (0)1 498 0300Email: [email protected] Richard Oldworth/Mark EdwardsBuchanan CommunicationsLondon+44 (0)207 466 5000 About APN----------APN News & Media Limited (ASX,NZX:APN) is the publisher of The New ZealandHerald and is the largest operator of regional newspapers, radio broadcastingand outdoor advertising in Australasia. APN has been listed on the AustralianStock Exchange since 1992, and on the New Zealand Exchange since June 2004. APN NEWS & MEDIA LIMITED PRELIMINARY PROFITS ANNOUNCEMENT --------------------------------- A$000 A$000 €000 €000 30 June 2005 30 June 2004 30 June 2005 30 June 2004 Turnover -ContinuingOperations 639,514 586,067 384,832 354,076 Operating Profit- ContinuingOperations 136,261 124,983 81,996 75,509- ExceptionalItems - (1,868) - (1,129) Profit fromContinuingOperations 136,261 123,115 81,996 74,380 Net Finance Charge (30,800) (30,998) (18,534) (18,728) Share of Profit ofAssociates 3,903 1,916 2,349 1,158 Profit on OrdinaryActivities beforeTaxation 109,364 94,033 65,811 56,810 Taxation (26,890) (23,492) (16,181) (14,193) Profit on OrdinaryActivities afterTaxation 82,474 70,541 49,630 42,617 Minority Interests (16,396) (14,110) (9,866) (8,525) Profit Attributableto Members of theParent Entity 66,078 56,431 39,764 34,092 Basic Earnings perShare (cents) 13.7 11.9 8.2 7.2 Diluted EarningsPer Share (cents) 13.2 11.9 7.9 7.2 Profit & Loss Accounts translated at Average RatesAverage Exchange Rate 2004 €1 = A$1.6552Average Exchange Rate 2005 €1 = A$1.6618 APN NEWS & MEDIA LIMITED GROUP BALANCE SHEET -------------------- A$000 A$000 €000 €000 30 June 31 Dec 30 June 31 Dec 2005 2004 2005 2004Current AssetsCash and CashEquivalents 212,429 108,292 133,822 61,917Receivables 237,052 244,836 149,334 139,986Inventories 26,441 23,813 16,657 13,615Tax Assets 16,318 15,094 10,280 8,630Other 30,309 33,413 19,091 19,104Total Current Assets 522,549 425,448 329,184 243,252 Non-Current AssetsReceivables 14,263 20,130 8,985 11,509Other FinancialAssets 29,531 22,392 18,603 12,803InvestmentsAccounted for Usingthe Equity Method 15,395 13,164 9,698 7,527Property, Plant andEquipment 279,833 284,733 176,284 162,798Intangible Assets 1,737,103 1,748,578 1,094,307 999,759Deferred Tax Assets 40,504 60,331 25,517 34,495Other - 9,273 - 5,301Total Non-CurrentAssets 2,116,629 2,158,601 1,333,394 1,234,192 Total Assets 2,639,178 2,584,049 1,662,578 1,477,444 Current LiabilitiesPayables 182,253 181,105 114,812 103,548Derivative FinancialInstruments 5,619 - 3,540 -Interest BearingLiabilities 82,845 23,284 52,189 13,313Current TaxProvisions 7,849 7,225 4,945 4,131Provisions 15,771 18,300 9,934 10,463Total CurrentLiabilities 294,337 229,914 185,420 131,455 Non-CurrentLiabilitiesInterest BearingLiabilities 885,428 874,684 557,785 500,106Deferred TaxLiabilities 209,843 217,009 132,193 124,075Provisions 2,260 2,216 1,424 1,267Total Non-CurrentLiabilities 1,097,531 1,093,909 691,402 625,448 Total Liabilities 1,391,868 1,323,823 876,822 756,903 Net Assets 1,247,310 1,260,226 785,756 720,541 EquityContributed Equity 960,017 965,165 604,773 551,838Reserves 32,221 34,705 20,298 19,843Retained Profits 4,372 9,810 2,754 5,609Total Parent EntityInterest 996,610 1,009,680 627,825 577,290Minority Interest 250,700 250,546 157,931 143,251 Total Equity 1,247,310 1,260,226 785,756 720,541 Balance Sheets translated at Closing RatesClosing Exchange Rate December 2004 €1 = A$1.7490Closing Exchange Rate June 2005 €1 = A$1.5874 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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