27th Apr 2005 09:01
Independent News & Media PLC27 April 2005 INDEPENDENT NEWS & MEDIA PLC APN News & Media Limited - Confirms 2005 double-digit profit growth forecast The Chairman of APN News & Media Limited (APN), in which Independent News &Media PLC has a 39.7% shareholding, made the following address to shareholdersat the company's Annual General Meeting held on 27th April 2005. The economies of our key markets in both Australia and New Zealand continuedtheir robust growth in 2004. In this environment, APN prospered through itsstrategy of investing in its core businesses.Employment levels showed sustained improvement. Consumer spending was strong.These are the conditions in which efficient media companies prosper. Acombination of all these factors resulted in the market capitalisation of yourcompany growing by more than 31%. The success enjoyed by APN in the past 12 months was due to the ongoing strengthof our core portfolio of media assets. Thanks to operations situated within highgrowth markets in Australia and New Zealand, your Company has benefited greatlyfrom exposure to a range of different media sectors across varying economicconditions in a number of geographic locations. The real benefit for shareholders - where APN's growth is greater than that ofthe economies in which it operates - accrues when our balanced portfoliostructure is enhanced by creative yet prudent management. Over the past fewyears, APN has undertaken a strategy of organic expansion from our coreoperations. Utilising our daily newspaper and broadcasting base, we havelaunched new publications and radio stations into growing markets while at thesame time leveraging strong existing operations and infrastructures. This hasenabled your Company to expand into attractive markets and create viable newproducts while actively managing risk. 2004 saw the launch of the Herald on Sunday in Auckland, new regionalnon-dailies in Queensland, the Coast and Flava radio stations in New Zealand andTribe Outdoor in Australia. All of these new assets were created from existingcore brands and were immediately well accepted by the market and resulted insignificant added value for shareholders. The strength of APN's business lies in its outstanding trans-Tasmancapabilities. Four of APN's five operating divisions are run on a trans-Tasmanbasis. This allows management the latitude to achieve efficiencies throughbenchmarking operations and skill sharing across a number of business units. Italso brings balance to our returns. History has shown that the New Zealandmarket is less susceptible to volatile changes in economic growth andadvertising spending. Equally, regional Australia has a history of resilientlocal growth at times when metropolitan Australia faces challenges. WhenAustralia's cities do prosper, as they did in 2004, the ensuing uplift for mediabusinesses is even greater. APN, through its newspaper, radio, outdoor andcommercial print businesses, has exposure to all of these markets. The result for 2004 - a 24% increase in Net Profit After Tax to a record $128.3million - is testament to the value of APN's ongoing strategy of buildingorganically and maximising shareholder return. On June 21 2004, APN undertook a dual primary listing on the New ZealandExchange. This was an historic and important step for the future growth of yourCompany. The listing allowed New Zealand investors to trade in APN sharesthrough their local brokers, using local currency. APN derives more than halfits revenue and profits from its media businesses in New Zealand. It is goodcommercial sense to make it easier for New Zealand residents to invest in thefuture growth of some of that country's best and most recognisable media brands.APN now has two 'home' exchanges: in Australia and New Zealand. As a result ofthe New Zealand listing, APN entered the benchmark NZX50 stock index in October,and with full weighting from 1 January 2005, was ranked ninth in the index. During the year, your Company broadened the skills on the Board with theappointment of a new non-executive Director, Gavin O'Reilly. Gavin's experiencein international media will enhance the depth of knowledge available to theBoard in its deliberations. The final dividend of 14.0 cents per share brings the total payment for the yearto 22.0 cents per share, franked at 30%, an increase of 20% over the 2003payment. This is the 12th consecutive year of dividend growth for shareholders.As part of APN's ongoing commitment to efficient capital management, yourCompany today announces its intention to proceed with an on-market buyback of upto 10% of its ordinary shares, equating to approximately 47 million shares. These steps are being taken to optimise the company's use of capital andrecognises the near-term likelihood of the conversion of Convertible Notesissued in 2001. Goldman Sachs JBWere will act as sole broker for the buyback.The Company's Constitution provides for share buybacks; however, the existingoperative provision needs to be renewed. A General Meeting to deal with thismatter only will be organised for no later than 2 June 2005. At the same time,the Board has decided to discontinue the Dividend Reinvestment Plan. APN will fund the buyback using existing facilities. The buyback will beaccretive to earnings per share. Early results for 2005 are in line with expectations. At the 2004 resultsannouncement in February, we informed the market of our objective ofdouble-digit profit growth for this year after last year's record NPAT of $128million. Your Board remains of the view that should current trading conditionscontinue, net profit growth of at least 10% is achievable, resulting in a NetProfit after Tax of at least $141 million. It should be noted that this NPAT outcome is prior to the effect of changesunder IFRS, which will result in a net positive for APN, principally relating tothe removal of goodwill. On behalf of the Board, I would like to extend my appreciation to all of APN'smore than 5,000 employees across five countries. It is through the skills,professionalism and commitment of our workforce that your Company has yet againproduced a record result. Special congratulations go to Chief Executive BrendanHopkins and our senior management team for another year of outstandingleadership. Finally, on behalf of my fellow Board colleagues, I would like to convey to allof our shareholders our appreciation of your continuing support. Thank you. ENDS 27 April 2005 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Independent News & Media