APN net profit up 77% on back of strong radio performance
APN News & Media's net profit after tax is up 77% to $22.6 million following the company's acquisition of the remaining 50% of Australian Radio Network (ARN) and The Radio Network (TRN) in February.
Revenue from continuing operations was up 3% to $405.9m (down 4% on a constant currency basis).
Earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations and before exceptional items up 1% to $70.7m.
APN says the results are reflective of the solid performances of several of its businesses in relatively weak advertising markets.
In particular, its Australian radio network ARN delivered strong revenue growth in Q2 following significant audience gains, which were largely attributable to major investments in the KIIS 1065 station and the Classic Hits Pure Gold network.
TRN also produced a strong revenue result and held share, with direct revenue a key driver.
Adshel saw an improvement in bookings over the last four weeks of the period, following completion of phase one of the deployment of its Sydney Trains digital assets.
APN's publishing divisions have both seen revenue declines continue to moderate, largely as a result of improving trends in local retail revenues.
SMI data indicates that the total agency advertising market in Australia was down 1% in H1, while in New Zealand the total agency market was down more than 7%.
Following cost savings of more than $40m achieved in FY2013, APN's publishing businesses are on track to deliver the previously flagged cost savings of $20m in FY2014.
As reported in March, APN raised $132m via an entitlement offer, which was strongly supported by shareholders. This was used to partly fund the acquisition of ARN and TRN from Clear Channel.
As a part 2 of that transaction, APN secured an exclusive ten year arrangement to operate and broadcast the
iHeartRadio digital platform in Australia and New Zealand.
APN concluded several asset sales during the period and in July announced the acquisition of the remaining 50% of the Hong Kong Outdoor businesses, Buspak and Cody, from Clear Channel for $14m.
In May, APN announced the appointment of Jane Hastings to the newly created role of Chief Executive Officer of APN New Zealand, with responsibility for the company's New Zealand publishing, radio and
Ms Hastings recently announced an integrated group management structure and has led a number of initiatives to drive improvements across the businesses.
APN today announced that is has successfully refinanced its debt facilities with a syndicate of domestic and international banks.
The new facility of $630m was scaled back after being over-subscribed.
APN's next significant debt maturity does not arise until January 2018.
"Through both the results and the refinancing, Michael Miller and his team have delivered a good outcome for our shareholders and positioned us well for the future."
The Board has decided not to pay an interim dividend.
APN Chief Executive Officer, Michael Miller said: "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."
"APN's New Zealand businesses continue to undergo significant and positive change under the leadership of Jane Hastings.
"The establishment of integrated sales offering APN Collaborative Media Solutions is one of the many ways in which our New Zealand businesses are working closely together to offer the best solutions to our clients and make the most of our assets.
"Radio continues to grow as a medium in both countries. TRN held revenue share in a strong market and for the first time ever, ARN is the leading FM network in Australia.
"These results are ahead of our three expectations, affirming that our decision to back these businesses, and radio as a segment, was the right one.
"iHeartRadio has been well-received, with over 650,000 app downloads and 480,000 registered users across Australia and New Zealand.
"Exclusive live events hosted in both countries have helped to grow user registrations and expand the platform to new audiences. There are more of these to come in the second half.
"Adshel's EBITDA was down on the prior year due to the investment and rent associated with its key Sydney Trains contract. However, this has resulted in good digital revenue growth; with strong advertising spending towards the end of the half."
2014 Interim results for APN
- Statutory net profit after tax up 77% to $22.6m
- Revenue from continuing operations up 3% to $405.9m; down 4% on a constant currency basis
- EBITDA from continuing operations and before exceptional items up 1% to $70.7m; down 6% on a constant currency basis
- ARN Australia's #1 FM radio network, with increased audience and revenue share; TRN held revenue share in a strong market
- On track to deliver full year publishing cost savings of $20m
- Acquisition of the remaining 50% of radio businesses and Hong Kong Outdoor; several asset sales
- Refinanced until 2018; new debt facilities of $630m over-subscribed