APN profits up 77%, despite print

APN is riding high with a 77 per cent jump in net profit for its half year results, boosted largely by radio acquisitions and no thanks to declining performance in print.

The company, which reports by calendar year, saw net profit jump 77 per cent to $22.6m from $12.8m at the same time last year.

It attributes the improvements to its acquisition of the Australian Radio Network (ARN) and The Radio Network (TRN), which it says are bringing in strong revenues.

Michael Miller, CEO of APN, says, “Although advertising markets remain challenging, APN’s second quarter performed better than the first.

“This gives us great confidence in our strategy of investing in talent, brands, digital infrastructure and a more integrated approach.”

ARN in particular showed strong growth in the second quarter and gained market share to become Australia’s top FM network – largely attributable to investments in popular stations like KIIS 1065 now featuring Kyle Sandilands and Jackie O.

The company spent $246.5m in February to buy up the last 50 per cent of the radio networks from American company ClearChannel, which still owns half of Adshel.

Revenue remained flat at $405.9m, up three per cent but down four per cent on a constant currency basis. EBITA was similarly up one per cent but down six per cent on constant currency.

The print side of the business saw revenues fall for both Australian Regional Media (ARM) and outdoor division Adshel, though the company says they should achieve better results by the end of 2014.

ARM revenue fell eight per cent to $99m, with EBITDA dropping 17 per cent to $10.5m in ‘tough overall agency market conditions,’ though local performance was ‘resilient,’ assisted by real estate.

Despite the dropping revenues, ARM increased its readership by eight per cent, growing its digital platforms by 34 per cent largely through mobile. The company says bundling its print and digital products has helped to leverage its large audience.

APN says it will continue to develop its mobile and video inventory this year.

Outdoor media division Adshel bucked the wider OOH trend with revenues falling by five per cent to $66.5m, and EBITDA down 19 per cent to $13.5m.

The company says early rental payments for its Sydney Trains contract are partly to blame, and also points to ‘underperformance’ by its NSW sales team in the first half of the year.

It says consistent improvements in bookings since the launch of the network have generated positive momentum for the second half of 2014.

In the coming months Adshel says it will complete phase two of its Sydney Trains roll-out, progress development projects in areas like Marrickville, Ashfield and Canada Bay, launch trials of new out-of-home technologies and move to the next stage of its sales programme.

Miller says, “Much of the positive revenue momentum that we have seen towards the end of the half and in more recent months is due to investments that we have made across APN’s businesses. This gives us confidence that we are on the right track.

“With our strengthened balance sheet we have the flexibility to pursue further growth opportunities, which gives me great confidence in APN’s future.”

GO TO MORE AUSTRALIA NEWS