APN News and Media lauds ‘zero exposure’ to print after posting big first half loss

APN News and Media, which has Kyle and Jackie O on its books, has reported a heavy first half loss but said it was now focused on operating in an environment free from traditional publishing.

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Factoring in costs associated with New Zealand Media Entertainment (NZME), which has been demerged from ARN, and Australian Regional Media (ARM), which is in the process of being sold to News Corp, APN’s statutory net loss plunged to $257m in the six month to June 30, from a first half profit in 2015 of $7.5m.

APN chief executive, Ciaran Davis, said all its key objectives – getting out of print – had been achieved since the turn of the year.

“With the successful sale of ARM, the company will have zero exposure to traditional publishing assets, and 100% exposure to growth media assets with good cash flow profiles,” he said.

Net profit after tax for its retained operations – Australian Radio Network, Adshel and Hong Kong Outdoor – hit $10m, up from $1.3m, with revenue down marginally to $129.1m.

Both NZME and ARM are listed as “discontinued operations” in APN’s financial results released this morning.

ARM, the sale of which will be voted on by shareholders next month, reported an EBITDA of $4.7m, down 42%, with revenue down 6% to $89m.

NZME’s EBITDA fell from $29.5m to $29.1m.

APN chairman, Peter Cosgrove, described it as a “solid result” with higher earnings achieved in a “competitive media market”.

“Most importantly we have moved a long way towards transforming APN into a radio and outdoor media company, which are both growth sectors in the media industry in Australia,” he said.

“We have also positioned APN well for the future by paying down a significant proportion of the company’s debt and we now have the right capital structure to pursue growth.”

australian-regional-media-APN-logoTurning to current trading, the media firm warned that the second half has started slowly, with soft conditions in July and August, while weaker radio ratings in surveys three and four were also flagged.

“However, ratings improvements in survey five are having a positive impact on sales conversion,” the company said.

Buying activity for Adshel remains “buoyant”, APN said, but its Hong Kong Outdoor business, operating in a “challenging market”, has struggled with total advertising spend falling 10% due to weak economic conditions.


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