APN revenue, profits up

APN CEO Ciaran Davis said NZME would not commit to a timeframe for the introduction of a paywall until it completed the installation of a new content management system.

An initial public offer and float of NZME - publishers of the New Zealand Herald - is still a possibility, says the company's owner, Sydney-based APN News and Media.

APN's newly-appointed chief executive, Ciaran Davis, in releasing the company's result for the six months to June, said APN would re-evaluate the situation regarding a possible float and make a decision in February next year.

"We will have a look at conditions then, and will re-evaluate," he said. "Nothing has been ruled in, and nothing has been ruled out," he said.

Last October, APN hired brokers Credit Suisse/First NZ and Forsyth Barr to advise the company on the possible IPO and sharemarket float of its New Zealand assets.

Along with the Herald, NZME's assets include Newstalk ZB and the online bargain website GrabOne.

APN is expected to remain a major shareholder if an IPO takes place.

APN announced the New Zealand Herald's first-phase launch of its digital subscription strategy, with digital registrations being implemented across the site before the end of 2015.

Davis said NZME would not commit to a timeframe for the introduction of a paywall until it completed the installation of a new content management system.

"We did not want to start a paywall without that system in place, so the strategy is very clear," he said. "We are going to spend the next period of time driving registrations on the platform before we look at introducing a paywall."

He said NZME's publishing business was looking strong, considering the economy looked to have slowed in the second quarter.

In today's results announcement, APN said its revenue at a group level for the six months from continuing operations was up 5 per cent on the corresponding 2014 period, to $A427.6m. The group's net profit after tax before exceptional items was up 3 per cent to $A25.1m - less than market expectations - which saw the share price drop by 10c to A56c.

Revenue at NZME eased by 1 per cent to $214.9 million in the first half to June 30, despite "challenging" market conditions, the company said.

NZME's financial performance is tracking in line with the November forecast given to the market.

NZME's earnings before interest, tax, depreciation and amortisation, (EBITDA) were down 13 per cent to $30.7 million in the six months, driven mostly by an 11 per cent decline in earnings from its eCommerce division - Grabone.

As part of merging APN's three New Zealand businesses into one, integration and procurement cost savings of $18m had been identified, with benefits to be realised over the next 18 months.

"The 2015 is a year of transformation for NZME, with investments implemented from H1 to realise revenue and cost benefits from H2," APN said.

NZME Publishing achieved revenue of $145.9m - which was up 2 per cent on a like for like basis on the corresponding year-ago period.

The revenue performance was driven, in part, by strong real estate and digital revenues as well as early success with integrated selling.

The overall New Zealand advertising market was strong in the first quarter but softened considerably in the second. Despite this, advertising revenues were down only 2 per cent.

See APN's latest financial results here: