22nd Feb 2005 07:02
Independent News & Media PLC22 February 2005 INDEPENDENT NEWS & MEDIA PLC APN NEWS & MEDIA LIMITED - RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004 Trans-Tasman growth markets drive APN 2004 Profit up 26% to a record A$130.2m, including new product investments APN News & Media Limited (APN), in which Independent News & Media PLC has a39.7% shareholding, today announced a record net profit for the 12 months ended31 December 2004 of A$130.2 million, representing a 26% increase on the prioryear, excluding non-recurring items (NRIs). Earnings per share were 26.9 cents, up 17% from 22.9 cents in 2003. TheDirectors have declared a final dividend of 14.0 cents, increasing the full yeardividend by 20.2% to 22.0 cents per share, franked at 30%. Group revenue before NRIs increased 12% to A$1,283 million and EBIT before NRIsincreased 19% to A$282 million. Net Profit After Tax before NRIs increased by26% to A$130.2 million, and after NRIs by 24% to an as-reported A$128.3 million. After allowing for the cost impact of new product initiatives and increasesassociated with other revenue gains, underlying cost growth was 3%. There were a number of significant new product initiatives during the year,building on APN's core media assets, including: • The Herald on Sunday in Auckland, • A number of new regional non-daily newspapers into high growth markets in south east Queensland, including western Brisbane and the southern Gold Coast, • Two major new radio formats in New Zealand, Coast and Flava, • Tribe Outdoor, a new community-targeted poster network; and • The ongoing development of the Aucklander. The reported EBIT of A$282 million is after expensing A$6.8 million in relationto these initiatives. APN continues to benefit from operating in the strongest markets in Australasia.Queensland and the northern half of the North Island of New Zealand once againrecorded strong economic conditions, producing above national average growthrates and near record employment levels. APN Chief Executive Brendan Hopkins said: "These are a very satisfactory set ofresults and demonstrate the continued strength of our core media businesseswithin their high growth markets and more than achieve our stated annualobjective of double digit earnings growth. "New product initiatives dominated the year. In particular, the Herald on Sundaywas launched in Auckland, and continues to perform ahead of expectations.Circulation is over 100,000, with 80% of all sales now fully paid following theinitial free subscription offer. "In addition, new format launches in Radio in New Zealand and new launches inRegional Newspaper operations in Australia underline APN's ability to continueto generate new revenue streams from our broad geographic spread of businesses. "We were pleased with the performances of Radio and Outdoor in the second half.Australian Radio in particular recorded strong revenue and market shareimprovements principally from advertising agencies, in line with our strategicobjective, and ended the year the clear leader in the targeted 25-54 demographicin Sydney and Melbourne. "Each Division performed well and each showed a meaningful improvement over theprior year. We look forward with confidence to the year ahead and retain ourobjective of double digit earnings growth for our overall business." Divisional SummariesAPN Group EBIT (AUD million) FY2004 FY2003 % var.Publishing 203.1 169.4 20% New Zealand National Publishing 102.9 88.8 16% Regional Newspapers 100.2 80.6 24%Radio 67.5 56.2 20%Outdoor 21.6 19.0 14%Print & Specialist 9.9 7.6 31%Corporate (13.6) (15.1) (10%)New Product Initiatives (6.8) - -EBIT before Non-recurring Items 281.7 237.1 19%Non-recurring Items (1.9) 0.6Group EBIT 279.8 237.7 18% New Zealand National PublishingThe New Zealand National Publishing Division includes The New Zealand Herald,the Herald on Sunday, The Aucklander and New Zealand Magazines. The Division increased overall revenue by 11% and EBIT by 16% on a comparablebasis. The New Zealand Herald remains by far the largest circulating daily newspaper inthe country. Each week more than 1 million New Zealanders read the Herald. Theongoing focus on advertising yields continues to underpin revenue gains. In2004, advertising volume in the Herald increased 1.7% while yield increased by7.2%. The Herald grew its subscriber base to more than 97,000 - over 47% of the totalcirculation of 208,000 - with 60% of subscribers signed to deals of six monthsor more. This committed subscriber base was a major factor in the successfullaunch of the Herald on Sunday. The existing relationship with Heraldsubscribers and the Herald's positive reputation with advertisers enabled theHerald on Sunday to launch with an average weekly circulation of more than100,000 copies, of which 50,000 are regular subscribers. Work on doubling the colour capacity at the Ellerslie print centre press is welladvanced, with a press reconfiguration underway to allow for 96 broadsheet pagesof back-to-back colour. The project is due for completion at the end of 2005. The Aucklander continued to make good progress, with a strong improvement inrevenue over the previous year. The Aucklander was also able to take advantageof the Herald's world-class distribution system and develop its own total marketcoverage delivery profile that this type of free weekly publication demands. New Zealand Magazines redesigned the New Zealand Woman's Weekly and The NZListener, consolidating their market positions. The New Zealand Woman's Weeklyremains the most read weekly magazine in the country, and had another recordyear. The New Zealand economy remained buoyant throughout 2004. The unemployment ratefor New Zealand in the December Quarter 2004 was 3.6% - the lowest level sincethe national job survey began in March 1986. The unemployment rate in Aucklandwas 3.3%, with strong levels of job advertising across the year. The propertymarket was also resilient: consents for 31,423 new dwelling units were issued inNew Zealand in the year ended December 2004, up 5 per cent from the prior yearand the largest total for a December year since 1974. Overall, business conditions in New Zealand remain positive and we look forwardto another successful year. Regional NewspapersRegional newspapers in Australia and New Zealand continued to perform ahead ofexpectation in the second half, underpinned by buoyant real estate andemployment advertising markets. Advertising yields strengthened in 2004,increasing in Australia by 9.7% and in New Zealand by 5.1% over the previousyear. Overall, divisional revenues were up 9% and underlying EBIT increased 24%to A$100 million. Overall circulation revenue increased 4% to A$61 million, with particularly goodcirculation volume gains in Australia. Audit Bureau of Circulation figures forthe six months to December 2004 show that APN publishes the five fastest growingnewspapers in Australia. In New Zealand, APN published the four fastest growingregional daily newspapers in the audit period to March 2004. The continuing strength of APN's local economies produced very good growth inemployment, real estate and motoring advertising. In Australia, employmentadvertising grew 39% and real estate advertising 27%. In New Zealand, employmentadvertising was up 30% and real estate advertising was up 23%. The A$35 million Yandina press centre on Queensland's Sunshine Coast is wellunderway. This new state of the art MAN Roland 'Regioman' press provides forback-to-back colour, including heat-set colour capability. The increasedpagination and enhanced colour availability will allow the production of a rangeof new publications targeted to high-growth advertising categories such as realestate and retail. The Queensland economy continues to outperform the rest of Australia. In the 12months to September 2004, Queensland Gross State Product grew 3.7%, comparedwith 3.1% for the rest of the country. Queensland has now exceeded economicgrowth in the rest of Australia for 16 of the past 18 financial years, averaging4.6% compared with 3.2% for the rest of Australia. In terms of jobs, Queenslandrecorded its lowest unemployment rate in at least 26 years in December 2004, at4.7%. This compares with the national rate of 5.1%. In the 12 months to June2004, Queensland again recorded the highest annual population growth rate inAustralia, at 2.1%. Whilst it would be unlikely that recently achieved advertising growth ratescontinue, it is pleasing to report that advertising revenues continue to recordsolid increases on the equivalent period in 2004 in both Australia and NewZealand. RadioBoth Australian and New Zealand radio operations performed well, growing revenueby 14% to A$243 million, and EBIT by 20% to A$67.5 million before the effect ofthe new radio licences in New Zealand. Strong audience survey results in bothmarkets led to increased share of agency advertising, as well as continued gainsin direct advertising. In Australia, the Australian Radio Network (ARN) improved audience and revenuemarket share throughout the year. The final survey of 2004 saw strong gains inthe commercially important 25-54 year-old demographic, where ARN is now themarket leader in Sydney and Melbourne. ARN increased revenue by 20% and EBIT by22% in 2004, as well as improving operating margin to 31.5%. We continue toincrease support for our brands and advertising budgets have been strengthenedagain for 2005. In New Zealand, APN's radio assets - operated through The Radio Network (TRN) -lead the market in audience share. More than 53% of New Zealanders aged 10 andabove listen to a TRN station each week. In the key markets of Auckland,Wellington and Christchurch, TRN holds leading ratings positions. Two newformats were launched in 2004 - Flava and Coast - which had debut audienceshares in Auckland that were well ahead of expectations. TRN commissioned 14 newstations throughout the year in the rollout of its eight networks across thecountry, taking the total number of stations at the end of 2004 to 111. TRNincreased underlying revenue by 8% and EBIT by 18% in 2004, and improvedoperating margin to 22.5%. OutdoorThe benefits from the restructure of APN Outdoor gained momentum, with anincrease in revenue by 22% to A$227 million and underlying EBIT up 14% to A$21.6million. In Australia, operations were consolidated from 17 locations down to seven and anew sales structure implemented. New transit contract wins in Adelaide andMelbourne late in the year, both on advantageous terms, reinforced nationalsales networks for APN's Buspak business. Buspak also secured important busadvertising contracts in New Zealand and in Hong Kong. In New Zealand, the rollout of the Adshel street furniture network continued,with more than 2800 illuminated panels now installed nationally. Late in 2004, 2000 high visibility sites from the Australian Posters networkwere re-launched under the Tribe brand, opening new revenue opportunities forthe Group. APN Outdoor has joined a Joint Industry Committee to oversee the introduction ofan audience measurement system for the Outdoor Advertising industry, which isexpected to be introduced early in 2006. Trading in the first Quarter has been positive and forward bookings for theDivision across Australia, New Zealand and Asia are encouraging. Print and Specialist PublishingThe Print and Specialist Publishing Division produced a strong result, liftingrevenue by 6% and EBIT by 31%. Gains from the restructure undertaken over thepast 18 months are now showing progress, in particular in commercial printing,where operational and sales efficiencies are producing good results. Additionalprinting capacity was introduced in the last quarter with the installation of a32-page press in Manukau, which has opened new revenue opportunities as well asreduced costs. OutlookThe Board of APN is pleased with trading at present in both Australia and NewZealand, which remains in line with expectations and ahead of the same periodlast year. Given a continuation of current trading conditions, the consensusfull year profit estimates currently in the market appear likely to be met. The final dividend of 14.0 cents per share is payable on 18 April 2005.Registrable transfers received by the Company up to the close of business on 7April 2005 will be registered before entitlements to dividends are determined.Books will close on 7 April 2005. Shareholders wishing to participate in theDividend Reinvestment Plan who have not already lodged their election must do soon or before 7 April 2005 in order to participate. Note: Unless otherwise stated, all dollar amounts are in Australian dollars. -- ENDS -- 22 February 2005 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 Pat WalshMurray ConsultantsTel: +353 (0)1 498 0300 About APNAPN News & Media Limited is the publisher of The New Zealand Herald and is thelargest operator of regional newspapers, radio broadcasting and outdooradvertising in Australasia. APN has been listed on the Australian Stock Exchangesince 1992, and on the New Zealand Exchange since June 2004. APN NEWS & MEDIA LIMITED PRELIMINARY PROFITS ANNOUNCEMENT A$000 A$000 €000 €000 31 December 31 December 31 December 31 December 2004 2003 2004 2003 Turnover - ContinuingOperations 1,262,386 1,117,451 747,107 642,693 Operating Profit- ContinuingOperations 281,660 237,108 166,692 136,371- Exceptional Items (1,868) 557 (1,105) 320 Profit on OrdinaryActivities 279,792 237,665 165,587 136,691 Net Interest Charge (62,478) (66,712) (36,976) (38,369) Profit on OrdinaryActivities beforeTaxation 217,314 170,953 128,611 98,322 Taxation (57,634) (39,532) (34,109) (22,737) Profit on OrdinaryActivities afterTaxation 159,680 131,421 94,502 75,585 Minority Interests (31,411) (27,872) (18,590) (16,030) Profit for theFinancial Year 128,269 103,549 75,912 59,555 Earnings per Share(cents) 26.9 22.9 15.9 13.2 Profit & Loss Accounts translated at Average RatesAverage Exchange Rate 2003 €1 = A$1.7387Average Exchange Rate 2004 €1 = A$1.6897 APN NEWS & MEDIA LIMITED GROUP BALANCE SHEET A$000 A$000 €000 €000 31 December 31 December 31 December 31 December 2004 2003 2004 2003Fixed AssetsIntangible Assets 1,961,295 1,901,659 1,121,381 1,132,412Tangible Assets 296,586 286,047 169,575 170,337Financial Assets 66,796 74,462 38,191 44,341 2,324,677 2,262,168 1,329,147 1,347,090 Current AssetsStocks 24,296 25,800 13,891 15,364Debtors 334,750 287,971 191,395 171,483Cash at bank and inhand 108,292 160,475 61,917 95,560 467,338 474,246 267,203 282,407Creditors - amountsfalling due within oneyear (227,626) (244,427) (130,146) (145,553) Net Current Assets 239,712 229,819 137,057 136,854 2,564,389 2,491,987 1,466,204 1,483,944 Creditors - amountsfalling due after morethan one year 865,410 915,993 494,803 545,461Provisions forLiabilities andCharges 24,389 19,418 13,945 11,563 889,799 935,411 508,748 557,024 Capital and ReservesShare Capital 963,565 926,630 550,923 551,795Capital Reserves 224,381 189,167 128,291 112,646Profit & Loss Account 212,191 170,538 121,322 101,554 Equity Shareholders'Funds 1,400,137 1,286,335 800,536 765,995 Minority Interests inSubsidiaries 274,453 270,241 156,920 160,925 2,564,389 2,491,987 1,466,204 1,483,944 Balance Sheets translated at closing ratesClosing Exchange Rate 2003 €1 = A$1.6793Closing Exchange Rate 2004 €1 = A$1.7490 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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