APN, the ARN’s parent company, reports strong growth and profit in its half year financial results.
APN News and Media has today released its financial results for the six months ending June 30 2013. Revenue was up 5% to $426.5 milllion and Earnings Before Interest Tax, Depreciation and Amortisation (EBITDA) before exceptionsl items was down 4% to $65 million. Net Profit After Tax (NPAT) before exceptional items was up $1 million to to $16.2 million.
During the half, the comapny has reduced net debt by $17 million and is on track to deliver on its commitment to reduce debt by $40 to $50 million by the end of 2013. Cost savings across APN’s publishing divisions are ahead of plan with teh original target of $25 million already secured.
The Company is now expecting to achieve publishing savings in excess of $35 million for the full year. In addition, the Company has reduced corporate costs by $3 million during the half through the disbanding of the Business Development Office and other efficiencies. Consistent with APN’s debt reduction strategy, the Board has decided not to pay an interim dividend.
APN Board and management renewal continued during the first half of the year, with Anne Templeman-Jones appointed as a non-executive Director in June and Michael Miller commencing as Chief Executive Officer in June.
Michael Miller said: “Despite a mixed advertising market, APN has delivered an acceptable result in difficult circumstances. The first six months of 2013 was a challenging period for APN. On the plans we have, I am confident that the team can deliver a better second half result. I am particularly pleased that the publishing business is well ahead of its plan on reducing costs, with a new targeted figure of $35m for the full year, having already secured $25m.
Our focus on the balance sheet requires some tough decisions and as such we have started to explore possible divestment options for brands Exclusive. This is a good business, however our aspirations here cannot be met without making further investment commitments. Whilst APN will consider merge and sale options we also reserve the right to retain the business if it is the best outcome for shareholders. Stabilising the revenues across the publishing divisions is my principal focus. I am a big believer that these businesses do have long-term and sustainable business models.
There is no silver bullet but we are on the right track and are preparing to launch digital subscriptions for our flagship newspaper, The New Zealand Herald, next year. Radio has had a stellar half, increasing market share in both Australia and New Zealand and the recent launch of iHeartRadio in both these markets will provide new and larger audiences.
Adshel’s outperformance continued in the first half, whilst APN Outdoor has had a difficult six months due to increased rental costs and a new competitive landscape. GrabOne remains a market success story on every measure; we have 80% of the group buying market in New Zealand and a terrific platform to build on, including new product launches.”
Radio:
The Australian Radio Network (ARN) continued to outperform the market in half one (H1), with revenue growth of 7% compared to market growth of 3%. EBITDA was up 14% to $27.0m. ARN gained market share in H1 and recently achieved its best 10+ audience in nine years, with a total of 3.7 million listeners and its best 25-54 audience in seven years.
ARN remains the number one 25-54 network in Adelaide and the number two 25-54 network in Sydney, Melbourne and Brisbane. Sydney’s Mix 106.5 breakfast and drive shows, which were both launched earlier in the year, continue to rise in the ratings. ARN’s digital investments are driving strong uplifts in both traffic and revenue.
In New Zealand, both the market and The Radio Network (TRN) delivered strong growth, up 7% and 8% respectively (on a local currency basis). EBITDA was $8.7m, up 27% (on a local currency basis). TRN gained market share in every month during the half. Newstalk ZB remains the number one 10+ share radio and talk station nationally and Coast remains the number one 10+ share music station nationally.
TRN CEO Jane Hastings’ program of change is ongoing and delivering good results. Radio Hauraki has increased listeners in its key 25-44 demographic following its relaunch in early 2013 and TRN is continuing to focus on growing its younger audience. The securing of new key talent, including Rachel Smalley, Carl Fletcher and Vaughan Smith is a significant win in this regard. Further, investment in the business’ digital capabilities is driving strong traffic and revenue growth, with the latter being up 73%.
ARN and TRN launched the international digital music platform iHeartRadio earlier this month, which will broaden the demographic appeal of both businesses and offer advertisers another way to connect with their expanded audiences.
View the APN’s full results release here.
View the results presentation here.