APN warned investors that the adverting market remains short and volatile and agency revenues remain soft entering the second half of the year.
The firm announced interim results this morning. Revenues across Australian Regional Media fell 8% to $99m for the half. The company said revenue from agencies within the unit had tumbled 20% but the company said it was on track to deliver full year cost savings of over $20m within the publishing unit. Some $6m in cost cuts have so far been implemented. The firm said strong real estate markets was helping local performance and that its newly launched programmatic trading operation was delivering new revenues.
The now fully-owned radio business, ARN, grew revenues 8% to $81.2m, outperforming the sector, which grew 1% over the same period. Market share overall was up 2 percentage points and the company said its gamble on talent was paying off. It cited a particuarly strong second quarter and predicted revenue growth for the second half based on improved ratings.
Revenues at Adshel, in which the group owns a 50% stake, declined 5% to $66.5m, although the company said it was up 1% on a like for like basis adjusting for sale of Adshel Infrastructure and Town & Park in December 2013. Poor performance in New South Wales dragged better performing regions down, the company said.
Overall, APN reported revenue from continuing operations up 3% to $405.9m
Statutory net profit after tax was up 77% to $22.6m.
“Although advertising markets remain challenging, APN’s second quarter performed better than the first. This gives us great confidence in our strategy of investing in talent, brands, digital infrastructure and a more integrated approach,” said APN CEO, Michael Miller.
“APN’s New Zealand businesses continue to undergo significant and positive change under the leadership of Jane Hastings. The establishment of integrated sales offering APN Collaborative Media Solutions is one of the many ways in which our New Zealand businesses are working closely together to offer the best solutions to our clients and make the most of our assets.
“Radio continues to grow as a medium in both countries. TRN held revenue share in a strong market and for the first time ever, ARN is the leading FM network in Australia. These results are ahead of our expectations, affirming that our decision to back these businesses, and radio as a segment, was the right one.
“iHeartRadio has been well-received, with over 650,000 app downloads and 480,000 registered users across Australia and New Zealand. Exclusive live events hosted in both countries have helped to grow user registrations and expand the platform to new audiences. There are more of these to come in the second half.
“Adshel’s EBITDA was down on the prior year due to the investment and rent associated with its key Sydney Trains contract. However, this has resulted in good digital revenue growth; with strong advertising spending towards the end of the half.”
Click on the table below to download the full results slides.
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