15th Aug 2006 07:00
Independent News & Media PLC15 August 2006 APN NEWS & MEDIA LIMITED - RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006 Record APN Interim Profit up 9% with Earnings Per Share up 12% and Dividend Per Share up 10% APN News & Media Ltd ('APN'), in which Independent News & Media PLC ('INM') hasa 41.8% shareholding, today announced a record Interim Net Profit After Tax andafter NRIs of A$72.1 million for the 6 months ended June 30 2006, up 9% on theprior year. Basic Earnings Per Share were 15.3 cents, an increase of 12%. $A million Growth Currency adjustedTrading Revenue from continuing 638.5 +3%operationsEBIT pre NRI 142.7 +6% As ReportedNPAT post NRI 72.1 +9%Earnings Per Share - Basic 15.3c +12%Dividend Per Share 9.7c +10% The Directors have today declared a 10% increase in the Interim Dividend to 9.7cents per share. Excluding the impact of the buyback on interest expense, profit after tax forthe half year would have increased by 15%. APN Chief Executive Brendan Hopkins said: "We are pleased with this result andwe remain confident of delivering another record result for the full year. Inparticular, Queensland continues to show good growth and our Outdoor business isconfirming our previous forecasts of strong growth now that we have seen the endof a number of uneconomic contracts. "We continue to invest in New Product Initiatives and this period sawsignificant investment in our Online Division where we have attracted a highquality team that has already launched a number of new initiatives. Inparticular search4jobs in only its third month is already New Zealand's secondlargest online job site. "Whilst the New Zealand economy has contracted in the second quarter inparticular - with its currency having depreciated by 14% against the Australiandollar - in local currency terms our businesses recorded satisfactory growth inprofitability during the first half. "The Company's capital management programme has also delivered significantreturns to shareholders. To date the buyback has been accretive to Earnings PerShare whilst maintaining an appropriate level of gearing in the Company. TheCompany expects a significant number of convertible note holders to elect toconvert at the next opportunity, namely October 2006. In anticipation of thisoccurring we recently advised that the buyback would be extended from theoriginal 47 million shares to a total of up to 65 million shares." Divisional EBIT results After NRIs, EBIT grew 9% on a constant currency basis with all divisionsrecording growth. +---------------------------------+---------+----------+---------+----------+|APN Group EBIT | June 30| June 30| Reported| Constant||(AUD million) | 2006| 2005| Growth %| currency|| | | | | Growth %|+---------------------------------+---------+----------+---------+----------+|Publishing | 104.9| 102.9| 2%| 6%|+---------------------------------+---------+----------+---------+----------+|Regional Publishing | 56.9| 53.8| 6%| 8%|+---------------------------------+---------+----------+---------+----------+|New Zealand National Publishing | 48.0| 49.1| (2%)| 4%|+---------------------------------+---------+----------+---------+----------+|Radio | 35.9| 35.3| 2%| 4%|+---------------------------------+---------+----------+---------+----------+|Outdoor | 9.8| 6.6| 49%| 50%|+---------------------------------+---------+----------+---------+----------+|Corporate & Other | (3.7)| (1.9)| 98%| 95%|+---------------------------------+---------+----------+---------+----------+|Group EBIT(pre NRI & NPI) | 146.9| 142.9| 3%| 7%|+---------------------------------+---------+----------+---------+----------+|NPI (New Product Initiatives) | (4.2)| (2.7)| | |+---------------------------------+---------+----------+---------+----------+|Online | (1.8)| (0.1)| | |+---------------------------------+---------+----------+---------+----------+|Other | (2.4)| (2.6)| | |+---------------------------------+---------+----------+---------+----------+|Group Trading (pre NRI) | 142.7| 140.2| 2%| 6%|+---------------------------------+---------+----------+---------+----------+|Non-Recurring Items (NRI) | 4.2| | | |+---------------------------------+---------+----------+---------+----------+|Total | 146.9| 140.2| 5%| 9%|+---------------------------------+---------+----------+---------+----------+ Regional Publishing APN publishes 23 regional daily newspapers and more than 100 non-dailypublications across high growth markets in Australia and New Zealand. TheRegional division again performed well, growing EBIT by 6% on the back of strongcomparable growth in the prior year. Adjusting for currency, EBIT growth was 8%. Unemployment continues at near record lows across most of APN's regional marketsin Australia. The launch of the combined Worksearch print and online productshas provided advertisers with enhanced opportunities to reach jobseekers acrossQueensland and northern New South Wales and was instrumental in achieving the18% increase in employment advertising in the first half. Continued population growth associated with the ongoing resources andconstruction boom in Queensland has supported growth in Real Estate advertising,particularly in Toowoomba, Mackay and Rockhampton. The category grew 13% in thefirst half, on the back of double digit increases in each of the prior threeyears. Similarly, in New Zealand the regional property market remains buoyant, withReal Estate advertising up 17 per cent. The launch of an upgraded weeklyproperty supplement in Hawke's Bay Today has been well supported by estateagents and is averaging 120 tabloid pages each Friday. Circulation revenue grew in both countries, up 4% in Australia and 3% in NewZealand, with more co-ordinated marketing campaigns delivering circulation gainsfor key titles. A number of small but strategically important titles were acquired, includingStyle magazine in Brisbane and the Beenleigh Reporter in the corridor betweenBrisbane and the Gold Coast. The acquisitions are well placed to benefit fromthe ongoing growth that is being experienced in South East Queensland. Several daily titles were relaunched, including the Sunshine Coast Daily, theToowoomba Chronicle and the Northern Advocate in Whangarei. Together with thedevelopment of new supplements that take advantage of additional colourcapacity, and the use of shared pages across regions, the Division has bothgrown revenue and contained costs. The new printing centre at Yandina on the Sunshine Coast is in the final stagesof completion and is due to commence operations in October 2006. This will addsignificant colour capacity to the business as well as provide heatset printingcapability to produce a broader range of products across the region. Inaddition, a new replacement print centre in Bundaberg will be operational byyear end to complement the Yandina centre, specialising in smaller print runproducts. New Zealand National Publishing (NZNP) NZNP comprises The New Zealand Herald, the Herald on Sunday, The Aucklander, NewZealand Magazines and commercial printing. The division has a co-ordinatedstrategy to increase market share in Auckland, New Zealand's largestmetropolitan market. The combined portfolio of titles has achieved strongpenetration into Auckland, with eight out of every 10 Aucklanders aged 15+reading a copy of an APN daily, weekly or magazine title each week. The New Zealand publishing business has built its home subscriber database to170,000 homes, which we expect to continue to driver the growth plans for thedivision. A total of 102,000 unique subscribers to The New Zealand Herald andthe Herald on Sunday are based within the commercial hub of Auckland. The New Zealand Herald retained its position as New Zealand's most read dailynewspaper, with 547,000 readers on a typical day, reaching six out of 10Aucklanders every week. Circulation revenue was up 7% for the first half of2006. The Herald on Sunday, which was launched in October 2004, is now the most readSunday newspaper in Auckland and the northern region of New Zealand. Thisextension of the Herald franchise to seven days a week has been well received byreaders and advertisers and provides an excellent platform for launching furthernew added value products. The Herald on Sunday is on track to achieve forecastprofitability in 2007. A number of new supplements were launched in the first half, including TheBusiness, a weekly stitched and trimmed quality business publication inserted inthe Monday edition of The New Zealand Herald. The Business is now the highestcirculating weekly business publication in New Zealand and was been wellreceived by advertisers and readers. NZNP grew advertising volume share in five of the six traditional advertisingpillars (Retail, Agency, Automotive, Employment and General Classified), whileshare in Real Estate remained stable. The Aucklander and the Herald on Sundaymore than doubled their share of classified volumes through the launch of SundayXtra and Affordable Homes, driven by the APN portfolio sales strategy. Thisportfolio volume strategy has impacted negatively on yield however, it ispleasing to report that significant volume market share gains have beenachieved. New Zealand Magazine titles The Listener, Creme and the New Zealand Woman'sWeekly remain the leading titles in their respective categories, with Creme andthe New Zealand Woman's Weekly both growing readership and circulation in themost recent audit period. Online APN established an Online division at the beginning of the year and a highquality team has been appointed to oversee the organic growth of its existinginternet assets and pursue expansion opportunities across the group. Already, the nzherald.co.nz website is the most visited news website in NewZealand and the third most popular domestic site in the market. In July, a newrecord was set for visitors (1.56 million) and for page impressions (26.57million). Display advertising revenue generated from the site grew 60% year onyear and revenue records have been exceeded each month this year. Demand forinventory is high, which has allowed for packaging across a number of sites,increasing overall yields. The online jobs site search4jobs.co.nz was relaunched in May and has quicklybecome the number 2 jobs site in the market in both traffic and job volumes. Thepopularity of the site with recruiters and jobseekers is expected to growfurther as new functionality is added. In Australia, Worksearch has continued toexpand and is already the largest regional employment website in Australia. As our online content, classifieds, directories and mapping assets aredeveloped, we are well placed to integrate these offerings in our markets. We anticipate rapid organic growth from our Online division in the balance ofthe year and 2007. Radio The Radio Division consolidated earnings after several periods of strongperformance, with EBIT up 2% for the half, and up 4% when adjusting for changesin currency. In Australia, the Australian Radio Network (ARN) built on the success of itsperformance in the commercially important 25-54 demographic, growing its shareof agency advertising revenue by 15% over the same period last year. In amoderating market, ARN successfully retained its existing clients, as well asrecruiting new clients who were not traditionally heavy users of radio. Thenetwork's two music streams of Classic Hits and Mix grew share in the 25-54demographic for the combined Sydney, Melbourne, Brisbane and Adelaide markets by9% over the past three surveys. In New Zealand, The Radio Network (TRN) continued to lead the industry, growingmarket share across the country. TRN operates the top 3 stations in the majorAuckland market, achieving total audience share of 49.9% for the first survey ofthe year. TRN also operates the number 1 stations in both Wellington andChristchurch. TRN's total audience share across New Zealand was up 1% to 46%.The group achieved a total 50% audience share in five of the 13 surveyedmarkets. Outdoor The Outdoor division produced a very pleasing increase in EBIT of 49% to $9.8million, reflecting the ongoing benefit of restructure work undertaken inprevious periods. The division secured a number of major contracts, including Railcorp in NewSouth Wales, Sydney buses, Sydney Airport and Perth Rail. All of the contractsare performing ahead of tender expectations. The successful tenders have enhanced the quality of the division's asset base ineach of the key industry formats. The Outdoor industry grew 12% in the firsthalf of 2006 and APN brands continue to be market share leaders in all of themajor Outdoor advertising formats in Australia. Street Furniture business Adshelgrew its market share in a format that itself grew advertising revenue by 29% inthe first half. In August, the Outdoor Media Association (OMA) announced the selection of aconsortium of Australian and international research companies as preferredcandidate to develop a new audience measurement system for the Australianmarket. The measurement system will cover all the major formats and provide astandard metric for advertisers to assess Outdoor's effectiveness. APN welcomesthis advance and will work closely with the industry association during thedevelopment process. Costs Costs in all trading divisions were well contained with Regional Publishingbeing the only division to record growth above inflation, reflective of itsstrong revenue performance. The expiry of uneconomic contracts and inventoryrationalisation meant that Outdoor costs increased less than 1%, despite newcontract wins. NZNP achieved a reduction of nearly 5% year on year, reflectingthe benefits of last year's restructure. Overall, costs on a constant currencybasis grew 2.3% pre-NPIs. Share Buyback To date 48.7 million shares have been bought back and cancelled at a total costof A$243 million. The Company expects a significant number of the 44.5 million convertible notesremaining to convert at the next opportunity, namely October 2006. Shareholders should be mindful that the buyback and in particular, the recentlyannounced extension means that there is likely to be fewer shares on issue atyear end than previously anticipated. In these circumstances we believe EarningsPer Share is the most appropriate way in which to reiterate our guidance forgrowth. Outlook The Board of APN News & Media continues to believe that, providing satisfactorytrading conditions continue, growth in overall profitability will be in linewith previous guidance. Following the recently announced extension of theCompany's share buyback, this means growth in Earnings Per Share is expected tobe between 5% and 10% for the full year. 15th August 2006 -- ENDS -- 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 5500 Tel: +353 (0)1 498 0300Email: [email protected] Rory GodsonPowerscourt MediaTel: +44 207 236 5619 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 2006 30 June 2005 30 June 2006 30 June 2005 Revenue 606,053 604,621 365,996 363,835 Operating Profit- Continuing Operations 137,738 136,262 83,180 81,997- Exceptional Items 4,234 - 2,557 - Profit from Continuing Operations 141,972 136,262 85,737 81,997 Net Finance Charge (33,713) (30,801) (20,359) (18,535) Share of Profit of Associates 5,012 3,903 3,027 2,349 Profit on Ordinary Activities 113,271 109,364 68,405 65,811before Taxation Taxation (25,748) (26,890) (15,549) (16,181) Profit on Ordinary Activities after Taxation 87,523 82,474 52,856 49,630 Minority Interests (15,397) (16,396) (9,298) (9,866) Profit Attributable to Members ofthe Parent Entity 72,126 66,078 43,558 39,764 Basic Earnings per Share (cents) 15.3 13.7 9.2 8.2 Diluted Earnings Per Share (cents) 14.7 13.2 8.9 7.9 Profit & Loss Accounts translated at Average Rates Average Exchange Rate 2005 €1 = A$1.6618 Average Exchange Rate 2006 €1 = A$1.6559 APN NEWS & MEDIA LIMITED GROUP BALANCE SHEET A$000 A$000 €000 €000 30 June 31 December 30 June 31 December 2006 2005 2006 2005 Current AssetsCash and Cash Equivalents 98,916 68,934 57,429 42,737Receivables 216,843 235,909 125,896 146,255Inventories 24,706 30,193 14,344 18,719Tax Assets 23,850 26,532 13,847 16,449Other 50,811 25,144 29,500 15,587Total Current Assets 415,126 386,712 241,016 239,747 Non-Current AssetsReceivables 11,089 8,047 6,438 4,989Other Financial Assets 17,381 17,296 10,091 10,723Investments Accounted for Usingthe Equity Method 23,734 21,014 13,780 13,028Property, Plant and Equipment 267,656 288,937 155,397 179,130Intangible Assets 1,643,149 1,784,717 953,988 1,106,458Deferred Tax Assets 39,129 33,377 22,718 20,692Total Non-Current Assets 2,002,138 2,153,388 1,162,412 1,335,020 Total Assets 2,417,264 2,540,100 1,403,428 1,574,767 Current LiabilitiesPayables 191,747 198,828 111,325 123,265Derivative Financial Instruments 1,127 4,280 654 2,653Interest Bearing Liabilities 101,012 87,232 58,646 54,081Current Tax Provisions 4,205 4,371 2,441 2,710Provisions 10,624 12,220 6,168 7,576Total Current Liabilities 308,715 306,931 179,234 190,285 Non-Current LiabilitiesInterest Bearing Liabilities 805,685 752,356 467,769 466,433Deferred Tax Liabilities 186,141 214,188 108,071 132,789Provisions 2,423 2,320 1,407 1,438Total Non-Current Liabilities 994,249 968,864 577,247 600,660 Total Liabilities 1,302,964 1,275,795 756,481 790,945 Net Assets 1,114,300 1,264,305 646,947 783,822 EquityContributed Equity 843,731 918,155 489,858 569,222Other Reserves (18,023) 42,647 (10,464) 26,439Retained Profits 50,511 51,201 29,326 31,743Total Parent Entity Interest 876,219 1,012,003 508,720 627,404Minority Interests 238,081 252,302 138,227 156,418 Total Equity 1,114,300 1,264,305 646,947 783,822 Balance Sheets translated at Closing Rates Closing Exchange Rate December 2005 €1 = A$1.6130 Closing Exchange Rate June 2006 €1 = A$1.7224 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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