“Soft” ad market hits APN results

By AdNews | 20 August 2015
 

APN News and Media has pointed to “a soft advertising market” with its net profit after tax (NPAT) growing just 3% to $25.1m in its 2015 half year results.

Unveiling its results for the year to 30 June, APN has seen profit attributable to shareholders slide to $7.5m in the 2015 half year from $22.6m in the previous year, while its earnings before interest, tax, depreciation and amortisation (EBITDA) increased to $71.2m from $70.7m.

APN chief executive Ciaran Davis, who was announced to replace outgoing CEO Michael Miller in June, said the results “reflect a soft advertising marketing in Q2 and a company in an important transition phase.”

“APN continues to generate strong cash flows and we have good balance sheet feasibility to invest in further growth opportunities.”

Australian Radio Network (ARN)

APN's Australian Radio Network division grew revenue by 29% over the period, to $104.6m, while its EBITDA grew 26% to $36.6m. Costs for ARN grew 30% as a result of its acquisition of 96FM and integrating it to deliver national benefits for the station.

APN noted that fixed cost growth is expected to return to nominal levels in 2016.

“ARN continues to have strong market leading positions in key metro markets across Sydney, Adelaide and Brisbane, and there are very encouraging signs form the launch of Kiis 101.1 in Melbourne and the investment in Perth's 96FM, which is integrating well into the Kiis network,” Davis said.

“A number of revenue growth strategies are in place to maintain ARN's positive momentum.

Outdoor

APN's street furniture arm Adshel grew 8% to $72.2m with EBITDA up 6% to $14.5m. It noted that its recently launched Auckland digital screen network had been “well received by advertisers with occupancy rates high, “with intention to expand the network nationally throughout 2016.

Australia's first national digital street furniture network will be launched in October, with it expected to deliver earnings benefits from 2016.

Adshel announced today that it will commence its sales automation across the Sydney Trains network in October this year in order to create an efficient data-rich network for OOH advertisers in partnership with Site Tour.

It will also increase the number of digital screens from 130 - 200 with expansion to train stations including Circular Quay, Newtown, Redfern, Milsons' Point, St Leonards, Edgecliff, Hurstville and Hornsby.

Adshel’s chief executive Rob Atkinson said the developments will give advertisers efficient, data-driven solutions.
“We are pleased to have expanded our Sydney Trains digital network creating more coverage for advertisers looking to target commuters as they are travelling across the network,” Atkinson said.

“This sort of digital coverage has allowed us to explore sales automation in out-of-home. We know there is clear advertiser demand for premium outdoor inventory to be traded programmatically and we have invested in the systems to automate the sales process and create sales efficiencies for advertisers and agencies.

“We look forward to growing this capability in the industry alongside the Outdoor Media Association (OMA) and remain committed to the development of their automated transaction platform (ATP) for automated trading.”

Adshel is also planning on rolling out beacons capability – which went live in Australia in April this year – across 1000 of its sites in New Zealand.

Australian Regional Media (ARM)

ARM revenue is down 5% year on year reaching $94.5m while EBITDA is down 22% to $8.2m. APN noted that the market had a strong Q1 driven by increased government and real estate revenues but that overall performance was impacted by soft Q2 conditions.

Local advertising was down 2% on the prior year however digital revenues grew 40% on a like for like basis, with growth being driven by an increase in digital consumption.

ARM's audience also continues to grow, with titles reaching 1.8m people each month.

Today, the business announced details of its digital subscription package which will be rolled out in a market-by-market approach. The Chronicle in Toowoomba will be the first title to launch a metered model on its site from 25 August.

Under the model, visitors will be able to view 10 articles per month before being invited to subscribe which gives users: unlimited digital access online, full access to mobile and tablet apps and full access to a digital replica of its print edition.

In a deal with News Corp Australia, Presto and The Washington Post, subscribers will also received digital access to The Courier-Mail and membership into its rewards program, digital subscription access to Fox Sport's online site, 52 weeks of free digital access to The Washington Post and three months access to the Presto entrainment bundle.

ARM’s chief executive officer Neil Monaghan said: “We believe that our digital subscription product is an important step in ensuring a sustainable and commercially viable future for ARM.

“ARM’s digital audiences are continuing to grow and we know that our readers come to our titles because of our unique and truly local content.

“For advertisers, this expected increased engagement becomes invaluable. When you also layer the user data we will have from subscribers, we can begin to offer better targeting opportunities for advertisers and more relevant advertisements for our subscribers.”

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