APN set to buy out ARN, announces profit despite business write-downs
APN News and Media has confirmed it is set to buy out US partner Clear Channel from its 50 per cent share in the Australian Radio Network for $246.5m, giving it full ownership of the network.
The news comes as the media firm, which owns a number of regional newspapers and an interest in outdoor company Adshel moved back into the black with a net profit of $2.6m after writing down the value of some of its assets, while the company also announced a $132m capital raising to finance the radio deal, in its full year results to December 31.
Before the write downs, which included cutting the value of APN Outdoor, which it sold its remaining stake in in January, by $23.6m, and BrandsExclusive which it divested last week for $2m by $24.5m, profits stood at $59.5m, the company’s best result since 2007.
CEO Michael Miller said: “This was a very satisfying result, which saw APN return to growth and has positioned the company for further improvement. The acquisition of our Australian and New Zealand radio businesses is part of our efforts to streamline APN’s operating structure. We have reduced the number of part-owned businesses from seven to two.
“We now receive the full benefit from businesses that remain central to our growth ambitions.”
However, the company has warned it has been a “challenging start to the year” for 2014, citing “softer agency conditions” and said publishing revenue declines have been consistent with the second half of 2013.
The acquisition of ARN will give the group full ownership of dozens of radio stations across the country, including the new Kiis brand in Sydney which is home to Kyle Sandilands and Jackie ‘O’ Henderson, MixFM and Classic FM brands in Sydney, Perth, Melbourne, Adelaide and Brisbane, and seven brands in New Zealand.
Chief Executive Officer of APN, Michael Miller said: “This transforms APN. The majority of our earnings are now in businesses which have been consistently growing and have considerable further upside. It also gives us flexibility to pursue new revenue generating opportunities across our portfolio of businesses.
“We believe that radio will continue to grow as a medium and that ARN will continue to capture a greater share of the market. ARN has one of the best management teams in the business and with no management changes planned there won’t be any disruption to day-to-day operations.”
Under the agreement the company has also secured a ten-year licence agreement with Clear Channel for the iHeartRadio streaming brand in Australia and New Zealand, and parts of Asia.
APN has also slashed costs in recent months, following the axing of former CEO Brett Chenoweth last year after foreign investors showed discontent with the company’s trajectory.
Adshel reported five per cent growth with revenues of $149m and earnings before interest, tax, depreciation and amortisation of $40m.
However, regional media in Australia dropped by 13 per cent to $217m, with an EBITDA of $29.7m, down 23 per cent on 2012’s full year results.
I didn’t know APN News & Media still existed….
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