APN News & Media will sell it its regional newspapers in Queensland, after posting a $10.2 million loss for 2015 – caused largely by writedowns on Australian Regional Media – while the company considers its options for its New Zealand business, NZME.
The loss for the calendar 2015 follows a non-cash write-down of $50.8 million on ARM. The previous year the company recorded a profit of $11.5 million.
Net profit was down 7 per cent to $70.2 million on flat revenue of $850 million – one per cent higher than the previous year.
APN chief executive Ciaran Davis said while ARM was operating in a challenging environment, there continued to be positive results.
He said the regional business had maintained stable audiences and grown its digital footprint through delivery of greater digital content, positioning the business for the future.
“Pursuing this digital growth strategy will, however, require further investment, particularly in fast‐tracking the digitisation and monetisation of its loyal and local audiences,” Mr Davis said.
“APN has been a long term supporter of regional publishing in Australia, however, our future investments must remain focused on growth assets and opportunities. We have therefore commenced a process to divest ARM.
“New ownership should give ARM the flexibility to invest where required, to continue to provide quality news and content to its audiences, without having to compete for APN’s capital.”
During questions after the results presentation, the company was asked whether News Corp Australia was the only potential purchaser of the Queensland mastheads and how APN would ensure it was not disadvantaged in the sales process by News’ investment in the company. News holds a 15 per cent strategic stake in APN.
In response APN said it was talking to a number of parties, and it was too early for a price guide.
Because of a need to prioritise its strategic investments and focus on assets that would deliver the greatest shareholder return, APN said it was also actively considering its options for NZME.
Despite the strong repositioning delivered through the NZME integration, the advertising market was not currently conducive to an IPO and APN would not pursue this approach at this time.
The company said there was no sales process at the moment and it would provide a further update to shareholders at the annual general meeting in May.
APN had strong growth from its radio division, Australian Radio Network, and outdoor.
“In Australia, radio and outdoor were two of the biggest growth sectors in media in 2015 with industry growth of five per cent and 17 per cent respectively,” Mr Davis said.
“Within those sectors, both ARN and Adshel are very strong assets with positive outlooks and momentum. “
In June, Adshel digitised 35 of its key advertising panels in Auckland CBD and in October, it launched Adshel LIVE, the world’s first national digital street furniture network in Australia with more than 270 digital panels. The digitisation of these panels has driven significant revenue gains for the Adshel business.
Adshel will expand its digital asset base to more than 800 screens across Australia and New Zealand from this year.
In terms of radio, Mr Davis said ARN would look to grow its younger audience base, delivering content across multiple platforms including mobile, video and social, utilising new and existing assets such as iHeartRadio, The Edge and Emotive.
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