APN full-year profit climbs 1.2% on NZ publishing

APN full-year profit climbs 1.2% on NZ publishing, outdoor advertising

Feb. 25 (BusinessDesk) – APN News & Media Ltd., publisher of the New Zealand Herald newspaper, reported a 1.2% increase in full-year profit, led by its NZ Media arm and growth in earnings from outdoor advertising.

Profit rose to A$93.8 million in 2010, from A$92.6 million a year earlier, the Sydney-based company said in a statement. Sales rose 2.8% to A$1.06 billion.

The media company sold bonds, re-negotiated its bank facilities and outsourced some printing work last year after emerging from what chairman Gavin O’Reilly called an “unbelievably tough” 2009, when the global financial crisis precipitated a drop in advertising. At the same time, it refreshed the ranks of its board and management, installing Brett Chenoweth as chief executive and increasing the number of independent directors. APN is 31.6% owned by U.K. publisher Independent News & Media Plc, which abandoned plans to sell its holding in 2009.

The company’s NZ Media unit, which includes the Herald, NZ Women’s Weekly and Listener, reported a 7.3% increase in earnings before interest and tax to A$71.3 million, even as sales fell 0.4%.

The earnings gain at NZ Media reflected “another strong performance on costs,” the company said. “The Herald ended the year with gains in circulation and delivering 7-year highs in readership.”

Australian Regional Media, APN’s second-biggest unit by sales with a suite of newspapers across Australia, posted a more-tepid 0.8% growth in EBIT to A$60 million as sales rose 5.8%. The company noted “some recovery” in classified advertising, while costs rose on an online advertising venture with Fairfax Media and investment in online products, it said.

Earnings fell 1.6% to A$42.9 million at its Australian Radio Network arm as sales rose 3.5%. The Radio Network (NZ), which includes Newstalk ZB and Classic Hits, reported a 4.6% drop in EBIT to $12.8 million as sales rose 1.1%.

APN said its radio businesses in both countries increased market share. Outdoor advertising recorded a 79% surge in earnings to A$28.9 million as sales climbed 3.8%.

The shares fell 2.9% to A$1.66 and have declined 27% in the past 12 months. The stock is rated a ‘hold’ based on the consensus of 13 recommendations compiled by Reuters.

The company is trading at 10.9 times earnings per share.

Rival Fairfax, which trades at a P/E of 12.4, yesterday reported a 16% gain in first-half profit to A$172 million as sales climbed 3% to A$1.3 billion. Fairfax cited growth in advertising sales, especially for real estate.

(BusinessDesk)

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