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APN reveals healthy $75m profit after radio growth

Kyle and Jackie O from KIIS 106.5... two of the stars of APN's radio network.
Kyle and Jackie O from KIIS 106.5... two of the stars of APN's radio network.

APN News and Media has announced a healthy increase in its profit after strong earnings growth and market share gains in its Australian radio operations.

The company released its results for the 12 months ending 31 December 2014.

Net profit after tax (NPAT) before exceptional items was $75m, up 27 per cent on the prior corresponding period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations and before exceptional items was up one per cent to $164.1m, with revenue from continuing operations up three per cent to $843.2m.

APN chairman Peter Cosgrove said: "This is an encouraging result for APN, and a continuation of the progress made during the first half of 2014."

"Just over 60 per cent of APN's proportionate earnings are now in growth media compared to 40 per cent 12 months ago. It is also pleasing to see the growth in shareholder value commensurate with the positive performance of the business, something we have been working hard to achieve."

In September, APN, the publisher of this website, completed the refinancing of its debt facilities a year ahead of their expiry.

The new facility expires in 2018.

Cash generated from operating activities was $65m in line with the target of $60-70m.

A portion of this was used to complete the refinancing of the company's debt facilities and to purchase further radio licences in New Zealand.

Continuing APN's commitment to reducing debt, and improving the balance sheet, a dividend will not be paid at this time.

Trading Update

APN has had a positive start to 2015. While the first weeks of the year are generally not a long term indicator, January trading was similar to trends observed towards the end of 2014.

Revenue is ahead of prior year in New Zealand, while the Australian Radio Network (ARN) continues to perform well.

Moderation of revenue decline continues in Australian Regional Media (ARM).

Overall, revenue is ahead of last year on a constant currency basis.

While costs are up, in line with our strategy of investing for growth, EBITDA is slightly ahead of the same point in 2014.

2014 Full year results: Profit increases 27%

Net profit after tax before exceptional items up 27% to $75.2m

  • EBITDA from continuing operations and before exceptional items up 1% to $164.1m
  • Statutory net profit after tax of $11.5m compared to profit of $2.6m in 2013
  • Strong earnings growth and market share gains in Australian radio
  • Fifth consecutive year of revenue growth at Adshel
  • Launch of NZME. through integration of APN NZ Publishing, The Radio Network and
  • GrabOne in New Zealand

In February 2014, APN completed the acquisition of the remaining 50 per cent of ARN and The Radio Network (TRN) from its US joint venture partner Clear Channel Communications Inc (Clear Channel).

The acquisition delivered improved cash flows which continue to strengthen the company's balance sheet.

In July, APN acquired, also from Clear Channel, the remaining 50 per cent of its Hong Kong Outdoor businesses - Buspak and Cody.

In September, APN announced the launch of NZME, integrating the operations of the market-leading New Zealand businesses - APN NZ Publishing, The Radio Network and GrabOne.

In December, APN announced the acquisition of Perth radio station 96FM, completing the group's five capital city offering and making ARN the number one metropolitan radio group in Australia by audience.

Michael Miller
Michael Miller

APN chief executive officer Michael Miller said: "This year's result has continued APN's positive momentum and reflects strong market performances in what have been increasingly competitive conditions.

"During 2014, our focus was on delivering enhanced earnings through investing in our growth assets of radio and outdoor, identifying synergies, generating cash flow and managing costs across all APN businesses. We also continued with the integration of our businesses and diversification of our revenue streams, with a particular focus on digital revenues.

"The full acquisition of ARN, TRN and our Hong Kong Outdoor businesses, as well as our acquisition of 96FM, reflect our confidence in outdoor and radio as growth mediums and our belief in the leadership of our business units to further maximise these now wholly owned companies.

"This approach has proved fruitful with these businesses recording strong revenue and EBITDA growth year on year.

"Under the leadership of Ciaran Davis, ARN has significantly increased its market share, and now has the largest audience of any metropolitan radio group in the country.

"Adshel has begun to realise the revenue opportunities of its Sydney Train digital screens contract which was fully deployed during the past year.

"The street furniture and digital out of home categories experienced revenue increases in 2014 which positions Adshel well for future growth.

"Through the formation of NZME, we have identified significant new revenue and cost saving opportunities. We are encouraged by the progress NZME's newly installed management team, led by Jane Hastings, has made and are confident in its ability to accelerate the benefits from this integration process.

"Our regional publishing business, Australian Regional Media (ARM), has benefited from a deliberate focus on revenue diversification, stronger local positioning and cost management. Revenue declines have reduced and we expect EBITDA declines to further moderate this year.

"Over the past 12 months, we have strengthened our balance sheet and continue to focus on improving cash flows, repaying debt, and investing for growth."

APN 2014 RESULTS MARKET ANNOUNCEMENT

Topics:  apn news and media business media newspapers peter cosgrove radio


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