Publishing declines, Radio increases at APN

7% profit increase for ARN. TRN’s New Zealand profit down by 11%. 

In the face of recent board turmoil, APN cancelled its face to face results briefing today and instead relied on its stock market release to tell investors the latest results for the twelve months ending 31 December 2012.

Revenue was down 13% to $929m and Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) was down 25% to $156m. Net Profit After Tax (NPAT) before exceptional items was $54m. In a move that will anger investors, no final dividend was issued.

Radio

Australian Radio Network (ARN) had a very successful year increasing market share by 7%. While the Australian radio market was down 1%, ARN revenue was up 5% to $140m and EBITDA up 7% to $51m. As at January 2013, ARN has exceeded market revenue growth for 19 consecutive months.

In 2012, ARN achieved the highest ratings for its target audience, aged 25-54, in five years.
In 2013 to date, ARN has maintained its strong revenue growth. Mix has just launched a new breakfast show in Sydney and new drive shows in Sydney and Melbourne. ARN and The Radio Network (TRN) will launch leading digital platform iHeartRadio in Q2.

In New Zealand the radio market was flat. TRN’s revenue was $87m, down 2% and EBITDA was $15m, down 12%. The results reflect, in part, closing the Easy Mix network, investment in digital content and capabilities as well as marketing. Newstalk ZB remains #1 station nationally and Coast moved to #1 music station nationally.

New TRN CEO Jane Hastings started in September and is driving a program of change to rebuild TRN. A restructure of the management team and sales team is already complete. 2013 has had a strong start to the year with revenue and bookings more than 10% ahead of this time last year. Content, sales strategy and iHeartRadio are all high priorities for the year ahead.

apnsegmentresults2012_751

The company’s overall revenue decline comes from deconsolidation of APN Outdoor following the formation of the joint venture with Quadrant Private Equity.

Revenue from continuing operations was up 2% to $857m and EBITDA from continuing operations was down 14%. As advised in the Company’s trading update in December 2012, NPAT was diluted by $8m by the joint venture.

APN today announced a non-cash impairment charge of $151m, associated with APN’s publishing assets in Australia and New Zealand. This impairment is in addition to the $485m announced in August 2012. Taking these factors into account, the Company reported a Net Loss After Tax of $456m.

The Company reduced its debt by $180m during 2012. This was achieved through asset sales, the formation of the APN Outdoor joint venture and a focus on cash management. Reducing APN’s debt levels is an ongoing objective.

APN will reduce debt by a further $40-$50m in 2013. This will be delivered by organic earnings including the cost reduction program in publishing, as well as small asset and property sales.
The Board has decided not to pay a final dividend for 2012.

New APN Chairman Peter Cosgrove said:

cosgrove1_88“The structural changes to media together with the weak advertising markets have impacted the results. Work has been done to reposition the business and we are seeing encouraging improvements. We have also been disciplined in reducing costs while investing in growth where appropriate.

“Australian Radio Network, Adshel and GrabOne all delivered good performances in 2012, with strong increases in revenue, earnings and market share. These results have been achieved in a difficult environment.

“Our publishing divisions are pushing through extensive change agendas which have been well received by our audiences and are gaining traction with advertisers. Cost reduction programs delivered $25m in savings in 2012 with another $25m reduction expected this year.”

Key indicators:

  • Net debt reduced by $180m
  • Net Profit After Tax before exceptional items of $54m in line with guidance
  • Weak markets offset publishing improvements. Cost initiatives delivered $25m of savings in 2012 with another $25m reduction expected in 2013
  • Australian Radio Network outperforms with market share up 7%
  • Adshel EBITDA up 29% with strong gains in market share
  • GrabOne doubles revenue, increases EBITDA by 7 times and leads market with 75% share
  • Non-cash impairment drives post exceptional loss of $456m