17th Nov 2005 09:48
Independent News & Media PLC17 November 2005 INDEPENDENT NEWS & MEDIA PLC APN NEWS & MEDIA LIMITED UPDATES TRADING TRENDS APN News & Media Ltd ("APN"), in which Independent News & Media PLC ("INM") hasa 39.7% shareholding, today issued the following updated trading statement.APN reported its 2005 interim result to the market on August 16, 2005. Sincethen, trading across the group has remained in line with previous guidance, withcontinued positive growth rates moderating as trading is set against strong 2004second half comparisons. APN is hosting investors in Sydney on November 18 and is issuing this statementin advance. Copies of the presentation to be used at the briefing will be postedon the APN website, www.apn.com.au Highlights of Quarter 3 trading by Division are as follows: Regional Newspapers In Australia and New Zealand we operate in regional markets that are the fastestgrowing markets in their respective countries. To the end of Quarter 3, thesemarkets have again delivered excellent growth on top of the 24% growth achievedin the 2004 full year. In Australia, advertising in the key categories of employment, real estate andretail remained strong across the 14 daily newspapers and 60+ community titles.Advertising growth in Quarter 3 was buoyant, driven by good volume improvementsover the same period in 2004. Product improvement across a range of markets,including increased use of gloss and enhanced formats for products such as TheQueensland Times, The Toowoomba Chronicle and the Sunshine Coast Daily,contributed to this performance. Circulations for the Australian dailynewspapers were in line with last year after cover price rises in many of ourmarkets, delivering thirteen consecutive quarters of positive circulation gainsto June 2005 for the division. In New Zealand, advertising revenue in the nine daily newspaper titles and 30+community titles remained strong with respect to the same period last year withemployment and real estate the stand-out categories. The year-on-year increaseswere predominately yield driven. Our ongoing masthead development has seenenhanced formats introduced for Hawkes Bay Today and The Wanganui Chronicle. The press centre development at Yandina on the Sunshine Coast remains on trackto be operational in the second half of next year. New Zealand National Publishing New Zealand National Publishing, incorporating The New Zealand Herald, Herald onSunday, The Aucklander and New Zealand Magazines, continues to perform well insofter economic conditions. While Quarter 3 advertising volumes in The NewZealand Herald were lower, primarily in employment which reached record levelsin the same period in 2004, yield continued to show strong growth, particularlyin agency revenues. Overall revenues and EBIT remain ahead of last year,excluding new product initiatives, and are expected to continue to do so for thefull year. Overall, circulation market share increased in the Auckland market inthe year to September in both revenues and volumes, driven by the strongperformance from The Herald on Sunday. Overall volumes were up 4% and revenuesup 5% on the prior corresponding period. The cover price of the Monday-Fridaywas increased by ten cents to $1.30 with effect from September 5 and The Heraldon Sunday by twenty cents to $2.00 with effect from September 4. TheMonday-Saturday New Zealand Herald remains the country's biggest daily, sellingmore than twice as many as its nearest rival. The Herald on Sunday is now the best-read Sunday newspaper in Auckland and hassettled at a circulation of 91,076 copies for the September audit period, aheadof expectations. Support from advertisers reached its highest point so far inOctober. The Herald on Sunday is now well established and, as expected, thelevel of ongoing investment required for this new product initiative ismoderating as we move into 2006. The Aucklander continues to perform in linewith expectations. The portfolio of APN's Auckland-based products: The NewZealand Herald, the Herald on Sunday and The Aucklander have increasedreadership penetration of the Auckland market from 56% to 68% over the last twoand a half years. Both the New Zealand Women's Weekly and The Listener are trading aboveexpectations. Radio In Australia, the continued focus on the 25-54 demographic and sustained strongsurvey results have delivered outstanding overall market share gains for theAustralian Radio Network (ARN). This increase in market share, driven by ratingsin the agency market and a continued strong performance in the directadvertising market, has produced continued growth in advertising revenue inQuarter 3. Although growth in the overall Australian radio advertising markethas moderated, ARN has achieved revenue growth rates significantly in excess ofthe market. The most recent survey confirms that ARN operates the number one FMradio stations in Sydney, Melbourne and Adelaide and that Classic Hits has thenumber one FM rating breakfast show in Sydney. EBIT for Quarter 3 has grownstrongly over a buoyant Quarter 3 in 2004. Margins have also increased on theprevious strong performance. In New Zealand, The Radio Network (TRN) leads the market in survey ratings in2005, confirming its position as the number one radio group in New Zealand. Inthe strategically important Auckland market TRN is clear market leader and hasstrengthened its lead in its overall audience share. The Easy Listening I formatwas rebranded Viva and has continued the rollout of its new and existing radiostreams throughout the country, launching eight new stations. In a slowingadvertising quarter for the radio industry in New Zealand, TRN has increased itsQuarter 3 revenue share and delivered good EBIT growth. Outdoor This has been an active year to date for the Outdoor division. In Australia,consolidation initiatives have delivered improved cost management and revenueperformance which together have underpinned strong earnings improvement inQuarter 3. The successful bids for the prized Sydney Airports Corporation andother key contracts, together with the expiration of certain uneconomiccontracts in the last quarter of this year, will ensure that this earningsmomentum strengthens in 2006. The acquisition of the remaining 50% of Look Outdoor in New Zealand in the firsthalf, and the Adshel street furniture build out, consolidated APN Outdoor'sleading position in the New Zealand market. Our business in the vibrant Hong Kong market is developing with improvedprofitability forecast for 2006 as a result of contracts won during this year. The new industry-wide audience measurement initiative is expected to beoperational in 2006. A research company to lead the initiative will be appointedby the end of this year. This important industry development along with otherAPN Outdoor marketing initiatives will provide improved performance andaccelerate the momentum of the Outdoor division into 2006. For the quarter,divisional revenues were 14% ahead and on a year to date basis EBIT has improved16% compared with the same period in 2004. APN Print & Group Services The New Zealand print market experienced an excess of printing capacityfollowing investment in new assets by all market participants over the lastcouple of years. This has resulted in pressure on margins for all operators inthis market. As announced at the half year, this division is moving to a full service modelby taking responsibility for the printing activities of the Group's publicationsincluding those produced at the Ellerslie and Yandina sites. Specialistmanagement to co-ordinate a group wide "best practice" approach to the criticalareas of human resources, capital expenditure, work practices and technicalplanning have been appointed. As a result, internal activity will represent anincreasing proportion of the division's focus and it is intended that thedivision will no longer be reported separately in 2006. In terms of trading, results continue to trend slightly lower than last year,with a $1.4 million reduction in earnings for Quarter 3. Digital Media The Company continues to develop its online capabilities with the recent launchof the search4 portal brand in New Zealand. The search4jobs website launched inSeptember resulted from the merger of APN's regional newspaper, TRN's netcheckand The New Zealand Herald 's employment sites. We are today announcing that an in principle agreement has been reached withClear Channel Communications to move to 100% ownership of netcheck, Auckland'ssecond largest employment website. www.nzherald.co.nz remains the number one news website in New Zealand with 1million unique users. A subscription payment model for premium content wasintroduced in Quarter 3 with encouraging early results. Our regional newspaper websites attract over 175,000 unique visitors per monthacross Australia and New Zealand and this continues to grow. Each regionalnewspaper has its own local news website which enables closer engagement withthe local communities we serve. The Company envisages continued digitalopportunities for these local sites in the future. Our radio stations operate well supported and highly visited websites which actas a key component in their interaction with listeners and are ideally suited tothe generation of future revenue streams. It is intended that the existing digital products will be consolidated into aseparate division in the New Year. We are committed to monetising our strongdigital attributes and will report on the progress of existing and newinitiatives at the 2005 full year results presentation. Capital Management As previously foreshadowed the Company has been active in capital managementduring the period. In June we announced the Company's intention to buy-back up to 47 million sharesover a 12 month period in anticipation of conversion of convertible notes. Todate the Company has bought back 23.4 million shares for an aggregate price of$117 million. We expect the buy-back to remain earnings per share accretive. As expected, in October 16.8 million convertible notes were converted intoordinary shares following the receipt of conversion notices from noteholders. Todate, 18.8 million convertible notes have been converted into ordinary shares,leaving convertible notes on issue with a face value of $175.7 million. Outlook The Board of APN continues to believe that, providing current trading conditionscontinue, the Company remains on target to achieve a full year result in linewith previous guidance. An increase of between 13-15% on the 2004 IFRS full yearnet profit after tax of A$129.4 million is expected to be achieved. ENDS 17th November 2005 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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