APN News & Media saw its profits drop by 7% year on year according to its full-year results, with the company signalling it will sell off its struggling Australian Regional Media arm.
ARM posted a revenue decline of 7%, down from $202.1m to $188.5m. The division’s local display ad revenues was the only part of the business to post growth, up 1% year-on-year from $86.2m to $87.1m.
Audience revenues were down 4% and national revenues were down 13%.
ARM consists of 12 daily newspapers including The Gladstone Observer and Gympie Times, more than 60 community and non-weekly publications and 30 regional news websites.
However while print subscribers are dwindling ARM has seen its digital audience grow, with the total online audience up by 22% with the company’s launch of a metered paywall seeing a conversion of trial subscribers to regular of 86%.
APN chief executive Ciaran Davis said in a statement that despite some “tough headwinds” the business had delivered “positive results”.
He flagged a $40m reduction in costs for the division in the last three years, but admitted its move to a digital strategy would “require further investment, particularly in fast-tracking the digitsation and monetisation of its loyal and local audiences”.
“APN has been a long term supporter of regional publishing in Australia however, our future investments must remain focused on growth assets and opportunities,” he said.
“We have therefore commenced a process to divest ARM. New ownership should give ARM the flexibility to invest where required, to continue to providing quality news and content to its audience, without having to compete for APN’s capital.”
Davis told investors the company is “talking to a number of parties” for the purchase of ARM however declined to provide any guidance around pricing on the sale of ARM.
“There is an initial amount of interest from a number of parties,” he said.
Overall, the media group, which has print, outdoor and radio assets including the Australian Radio Network which boasts the Kiis radio stations, posted a net profit after tax of $70.2m for the six months ended December 2015, down from $75.2 on the year prior.
Meanwhile, its revenue was up 1% from $843.2m to $850m while its EBITDA was also up 1% from $164.1 to $166.2m.
APN’s Hong Kong Outdoor business saw its revenue plummet by 27%, dropping from $49.9m at the end of 2014 to $37.9m at the end of last year. The outdoor business saw revenues across its Buzplay and Bus body dip, with the company admitting the Buzplay contract is loss making.
Meanwhile, APN’s Australian outdoor business Adshell posted an 8% growth in revenue up from $147.2m to $159.5m, with EBTIDA also up 4% from $37m to $38.3m. Costs for the business were also up 10% from $110.2m to $121.2m.
The group’s ARN Group, which includes iHeartRadio and content agency Emotive, grew its revenue by 22%, up from $180.8m at the end of 2014 to $221.1m. ARN posted an EBITDA of $82.8m, an increase of 25% from $66.5m.
Costs for the company grew by 21% from $114.4m to $138.3m, with $15m of the $24m increase attributable to the purchase of 96FM in Perth from Fairfax Radio Network, investment in Emotive and digital activities, while $9m was due to the cost of sales and talent.
NZME’s total revenues were down 3%, thanks to a 16% decline in the NZME GrabOne business while NZME Radio was down 5% and NZME Publishing was down 1%.