APN says NZ publishing conditions should improve

APN News & Media chief executive Brendan Hopkins. Photo / Richard Robinson.

Trans-Tasman media company APN News & Media is expecting trading conditions in its publishing business in this country to improve from September.

The company today reported a 50 percent fall in net profit to $A36.1 million ($NZ44.9m), before exceptional items, for the half year to the end of June.

APN's underlying revenue fell 18 percent to $A516.7m.

In this country APN's interests include The New Zealand Herald, nine regional newspapers, New Zealand Magazines, and The Radio Network (TRN).

Today's result also contains suggestions of new ways the company may seek to get revenue from its online operations before the end of this year.

The New Zealand media market recorded sharp declines in the first half, APN said.

But its publishing assets in this country had secured market share from television and radio and trading to date in the second half was ahead of the same period last year.

Volume share gains in New Zealand publishing were made in retail and national advertising.

Costs were down 14 percent in the first half in local currency terms, with the lower cost base positioning the division well for expected second half growth, APN said.

APN chief executive Brendan Hopkins said the company as a whole experienced difficult trading conditions towards the end of the first half, but July and August had seen no further deterioration.

"September onwards looks a little better, particularly in New Zealand," said Hopkins.

While the radio market in Australia remained resilient, the New Zealand radio business continued to find conditions challenging.

The nzherald.co.nz website was now profitable and users, page impressions and revenue all continued to grow strongly.

"We believe revenues will continue to grow organically for some time as the New Zealand online ad market matures," Hopkins said.

In both markets, the company was looking at diversifying online revenue sources. It was examining many options including paid content, transactional and "club" models.

"We are actively considering trials of each approach in certain overseas markets before the year end," he said.

"Overall, in both Australia and New Zealand many economic indicators are now turning positive; however, there has been a lag in that sentiment converting to sustainable revenue growth."

Some encouraging signs were emerging. For example, earnings from the New Zealand Publishing division were ahead of the same time last year, and APN's publications were taking national advertising market share from television, radio and outdoor.

NZPA