Australia's APN First-Half Profit Up on Advertising Gains
Australian radio and newspaper group APN News and Media reported a 5% rise in first-half earnings, meeting market expectations, as cost controls and a pick-up in outdoor advertising overcame a subdued New Zealand market.
Shares in APN, whose stockholders in May rejected a A$3 billion (US$2.5 billion) takeover offer, eased on the result which analysts said was solid but disappointed in some areas, including Australian radio earnings.
APN, which owns newspapers in Australia and New Zealand and a string of radio stations, said net profit for the six months to June 30 was A$73.2 million ($61.5 million), compared to A$70 million year ago.
Analysts had expected earnings of A$72.63 million, according to the mean of three forecasts on Reuters Estimates.
"It is a reasonable result given the challenging conditions evident in New Zealand and increasingly in the domestic radio industry," BT Financial portfolio manager Jack Chemed said. "It looks like the headline numbers are in line but the tax expense was lower than the market was expecting so it is a bit light on the pre-tax line."
APN, which earns 60% of profits in the second half, tipped full-year earnings to rise 5%-10 percent, in line with market expectations.
Key APN shareholders rejected a bid from a consortium led by its biggest stakeholder Ireland's Independent News and Media and private equity firms in May. It was Independent's fourth tilt at the firm.
Chief Executive Brendan Hopkins declined to speculate on Independent's intentions but said APN had not received any bid approaches. "No more conversations, no more approaches," he told reporters on a conference call.
He said APN had access to capital for growth opportunities. "If an opportunity comes up which is an appropriate price we have plenty of firepower. APN has a track record of not overpaying for assets," he said, but declined to say what areas APN would look at.
Strength in Queensland state's economy helped its Australian publishing arm perform well but trading conditions inn the New Zealand newspaper market were subdued in the first half, it said.
Outdoor advertising posted a jump in earnings as expected after winning new contracts and costs rose a modest 2% despite increases in newsprint prices.