APN will spend $246.5m to take full control of its radio assets, today’s announcement coming as the company finishes digging itself out of a half-billion-dollar hole with a $2.6m net profit.
The media group, which lost $507.36m in 2012, announced a $2.6m net profit in its half year report today, with $817.23m in revenue from continuing operations, down one per cent from $822.96m.
Its out-of-home advertising business Adshel delivered a record result, with EBITDA growth of 14 per cent to $40.2m and revenue increased 5 per cent to $149.3m.
Traditionally an outdoor furniture advertiser, Adshel is expanding into a full-service out-of-home advertising provider to fill the void left by the sale of APN Outdoor, starting with a five-year contract with Sydney Trains it won in December.
[Related: More outdoor printing news]
The buyout of the remaining 50 per cent stake in radio networks Australian Radio Network and The Radio Network from American company Clear Channel will be financed by a $132m capital raising, $60m from last year’s sale of APN Outdoor, and $60m in debt funded from existing facilities.
The capital raising will be a fully underwritten 5-for-9 pro rata accelerated non-renounceable entitlement offer. The company announced a trading halt until Friday while it sorts out the acquisition.
The company says it has the support of key shareholders including Independent News & Media, Allan Gray Australia and Baycliffe Limited, which together represent 50.4 per cent of the company’s current issued share capital.
Allan Gray Australia and Baycliffe Limited have confirmed they will take up their full pro rata entitlements.
APN also secured an exclusive 10-year arrangement with Clear Channel to operate and broadcast the popular iHeartRadio digital radio platform in Australia and NZ.
Revenue for APN’s Australian publishing arm Australian Regional Media (ARM) fell 13 per cent to $217.0m and EBITDA was down 23 per cent to $29.7m, but EBITDA in the second half of the year was down only two per cent compared to the corresponding period in 2012.
ARM implemented modular advertising across its 12 regional daily newspapers In November, reducing the number of standard ad shapes from over 270 to 18.
[Related: More APN news]
Chief executive Michael Miller says: “These are APN’s best results in a number of years with NPAT and EBITDA growth at their highest level since 2007 and 2005 respectively.”
He says the company’s commitment to cost cutting had netted $63m in net cash flows for 2013, ahead of its target of $40-50m. The company will aim for $60-70m this year.
However, APN again did not pay a dividend.
“This was a very satisfying result, which saw APN return to growth and has positioned the company for further improvement,” Miller says.
“The reduction in leverage from paying down debt through the year will considerably improve our refinancing options during the second half of 2014.
“Meanwhile we have sufficient headroom within our current facilities to meet all our obligations for the current year.
“The APN of today is in a far better position than it was a year ago. Looking ahead, we are firmly focused on growing revenues across our divisions.”
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter
