APN lowers profit forecast

APN expects a full year net profit after tax of between $75 million and $77 million, slightly below current market consensus, it said in an update today. 

The publisher of the NZ Herald said while trading so far for the second half was  significantly better than the first half (which was impacted by a series of natural disasters in both Queensland and New Zealand) it was still behind the prior year due to “the well reported weakness in advertising markets in Australia and New Zealand.”

APN’s second half numbers were also affected by the weaknesses in the New Zealand dollar, it said, which depreciated almost 5% since its interim result announcement in August.

Earnings before interest and taxes for the year was expected to be between $171 million and $173 million, APN said.

While the markets had been tougher than APN would have liked, the company has made material progress repositioning the company and remained focused on managing the levers that were within its control, chief executive Brett Chenoweth said.

“In a competitive environment, we have gained market share in Outdoor and in both our Australian and New Zealand radio businesses. These businesses are well positioned for further growth in 2012.”

Mr Chenoweth said GrabOne and CC Media were beginning to contribute meaningful digital revenue streams for the company and the digital culture across the group was building.

“Our cost management is vigilant and we have exceeded the cost reduction targets announced to the market in April. APN is driving further productivity improvements across the group as the company prepares for 2012.”

APN said across its publishing business, conditions remained challenging and the company continued to make changes in its portfolio, responding to market demand.  It recently announced changes in two smaller, highly competitive markets, Tweed Heads and Coffs Harbour, which would reconfigure print products and place more emphasis on the company’s online offering.  APN expected improved profitability in these markets as a result, it said.

The company’s focus for 2012 would include continued to reinvigorate its product set in publishing, it said, as well as expanding its Outdoor business and continue to make its digital repositioning a priority. 

“The company has a strong and vibrant Outdoor business and is exploring options to reposition and further expand this business.”