Herald earnings help boost APN

By SIMON HENDERY

Sydney-based APN News & Media has reported an 87 per cent jump in net profit, a year after acquiring a stable of New Zealand media assets including the New Zealand Herald.

APN yesterday reported a record net profit of A$90.2 million ($98.6 million) for the 12 months to December. Revenue for the year was up 79 per cent to A$1.072 billion ($1.17 billion).

APN, 45 per cent owned by Sir Anthony O'Reilly's Dublin-based Independent News & Media, bought INM's operating subsidiaries - including Herald publisher Wilson & Horton - in December 2001 for A$1.2 billion.

APN chief executive Brendan Hopkins said yesterday the first full-year profit contribution from New Zealand had exceeded pre-acquisition forecasts.

As well as the Herald, APN's New Zealand assets now include nine regional daily newspapers, 40 non-dailies, specialist publishing and printing operations, and stakes in broadcaster the Radio Network, and outdoor advertiser Adshel.

In Australia, APN owns 64 newspapers and 12 radio stations.

It has outdoor advertising businesses in Australia and Asia.

The group's publishing operations were its biggest contributors to operating profit.

They accounted for A$137.6 million of the total earnings of A$204.9 million before interest and tax (ebit).

The New Zealand Herald contributed more than half A$72.1 million of the publishing earnings.

The change of ownership meant a direct comparison was not possible, but APN said that on a like-for-like basis, Herald earnings before interest and tax were up 16 per cent from A$62.2 million in 2001.

APN said strong growth in the Auckland economy had resulted in a 4 per cent rise in Herald advertising revenue last year.

The paper's circulation revenue was up 5.5 per cent.

Hopkins said APN was not planning any further major acquisitions.

"We're a sizable company and don't need to acquire," he said.

"We just made a quantum leap forward with the Wilson & Horton acquisition. As far as we are concerned, we have plenty to do."

The company would continue to invest in its existing asset, for example by upgrading printing presses, he said.

APN said group revenue and ebit so far this year had continued the positive trend from the last quarter of last year.

Each of the company's five divisions traded either in line with or above expectation and together were significantly ahead of the first quarter of last year.

"Subject to the current market conditions prevailing, the board believes an improvement in results in 2003 is likely," the company said.

APN shares rose 5Ac to close at A$3.05 on the Australian Stock Exchange yesterday.

The company has a market capitalisation of about A$1.3 billion compared to competitors Fairfax Holdings (A$2.2 billion) and Rural Press (A$600 million).