APN triples profit

APN profits more than tripled in 2014 on the back of huge radio acquisitions, but print assets continue to lag as the company shifts its focus to digital.

Statutory profit jumped from $2.6m to $11.5m a year after the media company spent $246.5m to take full control of its radio assets and then in December bought popular Perth radio station 96FM for $78m.

Buying out the remaining 50 per cent stake in Australian Radio Network and The Radio Network helped push revenue up three per cent to $843.2m and grew EBITDA one per cent to $164.1m.

[Related: More outdoor news]

The news for its print business is not as good, however, and the company clearly views it as an anchor weighing down more profitable assets.

Chief executive Michael Miller says APN’s focus for the year ‘was on delivering enhanced earnings through investing in our growth assets of radio and outdoor’.

“We also continued with the integration of our businesses and diversification of our revenue streams, with a particular focus on digital revenues,” he says. Digital now accounts for seven per cent of overall revenue.

He says the radio acquisitions ‘reflect our confidence in outdoor and radio as growth mediums and our belief in the leadership of our business units to further maximise these now wholly owned companies’.

“This approach has proved fruitful with these businesses recording strong revenue and EBITDA growth year on year,” he says.

In the same announcement, chairman Peter Cosgrove celebrated the percentage of revenue coming from ‘growth media’ like radio and outdoor growing from 40 to 60 per cent.

Revenue for its Australian Regional Media (ARM) newspaper network is down seven per cent to $202.1m, only half as much as 2013’s 15 per cent fall, with advertising down two per cent and EBITDA down 16 per cent.

Even at ARM the company is focused on digital, with revenues there growing 39 per cent, and APN investigating numerous diversification angles.

[Related: Adshel attacks new markets after APN Outdoor sale]

Outdoor business Adshel revenue is up four per cent to $147.2m, but even there the gains are increasingly coming from digital screens as the company deployed the largest rollout of digital out-of-home in Australia.

Traditionally an outdoor furniture advertising company, Adshel is now firmly focused on its large-scale entry into digital with its huge Sydney Trains contract pulling in major brands like H&M, Air Asia, Expedia, Sunglass Hut, and YouTube to advertise on its interactive digital screens.

APN says Adshel will again focus on digital in 2015, increasing the number of screens in the train network by 50 per cent and adding new features to its digital inventory.

APN net profit after tax before exceptional items is up 27 per cent to $75.2m, while net debt increased 4.6 per cent to $457.8m from the radio acquisitions.

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