APN to buy out Australian and NZ radio networks
APN News and Media said it has returned to profit in 2013 after suffering a huge loss in the previous year, and said it plans to spend A$246.5 million buying out its commercial radio partner Clear Channel.
Sydney-based APN, which publishes the New Zealand Herald and Australia's top regional daily newspapers and websites, including this one, said it planned to go to full ownership of Australian Radio Network (ARN) and The Radio Network (TRN) from Clear Channel.
The purchase would be funded by a A$132 million fully underwritten non-renounceable entitlement offer, from A$60m in asset sales, and A$61 million in debt.
In a letter to staff, APN News and Media CEO Michael Miller said the 2013 full year results demonstrated "the highest rate of earnings growth in more than five years.
"Our group net profit after tax, a key measure of financial performance, increased by 10% to $60 million. This marks a return to growth and provides a solid base from which we can build,'' Mr Miller wrote.
"Across our Australian businesses, Australian Regional Media had a better second half result and performed well in national revenue share and circulation numbers;
"Adshel delivered a record result and won the exciting Sydney Trains contract; and iNC Digital Media landed some major client wins towards the end of the year.
"Congratulations on these results and thank you for your contributions. Keep doing what you are doing and the results will continue to follow.
"APN also announced that we are today acquiring full ownership of our Australian and New Zealand radio businesses, Australian Radio Network (ARN) and The Radio Network (TRN), from our joint venture partner Clear Channel.
"This acquisition is part of APN's approach to own more of our businesses outright so that we can capitalise on their success. Both businesses achieved strong results in 2013.
"We believe that radio will continue to grow as a medium and that ARN and TRN will continue to capture greater market share. APN is now the single largest owner of radio assets in the trans-Tasman region.
"While the past year has not been without its challenges, APN is a very different business to what it was a year ago.
"We have a strong, pioneering culture and the opportunities are out there for us in radio, publishing, out-of-home advertising and digital.
APN's management teams have done a great job in achieving these good results and also work really well together. As a group we can all learn from each other and work more closely in the future."
New Zealand stations in the network include NewstalkZB, Classic Hits, ZM, Radio Hauraki, Radio Sport, Coast, Flava, Hokonui and the Farming Show.
Speaking on NewstalkZB this morning, Mr Miller said one benefit of becoming 100 per cent owner of TRN was the ability to make quicker decisions around the business.
The opportunity to buy the Clear Channel stake at a good price was a good one. A single shareholder could work more closely with the TRN management team, said Miller.
He described Clear as "willing sellers". Its radio business was now purely in North America.
"It suited them and we jumped at the opportunity."
The ten-year license deal for the I Heart Radio digital platform meant APN was able to work with Clear over the next ten years and share its experiences and development in a hugely popular new way of communicating, said Miller.
APN said its net profit came to A$2.6 million compared with a loss of A$507.4m in 2012.
Before exceptional items, the net profit after tax came to A$59.5 million, up 10 per cent.
Net debt as at 31 December 2013 was A$436.9m.
APN went through a board-room shakeout and new chief executive appointment when major shareholders Independent News & Media and Allan Gray Australia baulked at a planned capital raising.
APN shares in Australia last traded at A44c, having gone through a A43c to A49.5c range over the last year.
Mr Miller said APN had made considerable progress in its efforts to streamline operations and position the company for growth.
The sale of APN's wholly-owned New Zealand magazine titles to Bauer Media Group has received clearance from the New Zealand Commerce Commission and is expected to complete in March.
APNZ's Australian Regional Media (ARM), operating earnings were down 23 per cent at A$29.7m, with revenue down 13 per cent to A$217.0m.
New Zealand Media (NZM) had a better finish to 2013, delivering operating earnings growth of 2 per cent to $53.0m on a local currency basis.