APN News & Media's Ciaran Davis has flagged more integration and cost-cutting - and put Australian regional print assets on the block - to hold the line in an Australasian market the media company's chief calls "quite soft and challenging".
Davis said annual results revealed yesterday, with a A$10.2 million ($10.9 million) loss on flat revenue, showed moves to merge its New Zealand subsidiaries at NZME were working. NZME publishes the New Zealand Herald and owns The Radio Network.
Davis said he visited Auckland the day of the Trans-Pacific Partnership signing and was impressed with the results of last year's integration of radio and print operations.
"I saw first-hand what an integrated newsroom can deliver. Reporters were able to get out into the street and then into the ZB newsroom to report live, joined by expert analysis which fed into the next day's paper," the chief executive said.
The results showed revenue for APN's New Zealand assets for the year to December 31, 2015, fell 2 per cent to A$402.4 million, with publishing revenues up slightly at A$274.6 million, radio revenues down A$5.1 million to A$111.7 million and online coupon firm GrabOne down A$2.9 million to A$16.1 million.
The financial results came on the same day readership figures showed NZME's Herald on Sunday - with 303,000 readers - had for the first time overtaken Fairfax's Sunday Star-Times.
Davis said the integration project had resulted in savings of A$20 million and in the coming year was expected to deliver A$10 million more.
Davis said while restructuring costs had eaten much of the savings, and A$13 million had been reinvested back into the business to help establish new ventures such a video platform WatchMe, he expected the moves to keep bearing fruit.
"Redundancies are a one-off cost, but the savings are ongoing," he said.
It is understood the project resulted in boosted digital, events, video and experiential revenues, helping to offset declines in more traditional advertising.
The presentation saw Davis announce Australian regional print assets were being put on the block. He said he had begun the process to sell the company's portfolio of 12 daily and more than 60 non-daily Australian regional newspapers to help the company focus on its digital growth strategy.
The Australian regional media division had a rough 2015, with ebitda down 27 per cent to A$18.4 million.
Davis said the move didn't mean the company was looking to shrink, and the proceeds of any sale would be used to grow promising parts of the business or fund acquisitions.
Davis said the soft New Zealand market was also behind a decision to put on ice earlier plans to float NZME.
"The current advertising market is not conducive to an IPO, but we are actively pursuing a number of options and will update shareholders at [the] AGM in May," he said, adding discussions involving the future structure of the New Zealand operation were live and ongoing.
Rough economic conditions in both Australasian countries meant APN needed to be prudent, he said. "While we are at the mercy of the ad markets and broader economy, cost reductions have to play a role.
"It is imperative that we find new sources of revenue - digital will deliver."
- additional reporting BusinessDesk
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