Independent's Australian arm announces 53% rise in profits

Pre-tax profits at APN News and Media, the Australian associate of Independent News and Media, jumped by 53 per cent to 36.7 million Australian dollars (€22.64 million) for the six months to the end of June. Chief executive, Mr Cameron O'Reilly said the group was "on track for the seventh consecutive year of profit and dividend growth".

After payments of interest, tax and dividends to the minority shareholders, the profit for the six months was 15 per cent ahead at Aus$16.7 million. Turnover was up 25 per cent to Aus$226.7 million. Growth in operating profits was much stronger - up 42 per cent to Aus$42.4 million - pushing operating margins up to 18.7 per cent from 16.4 per cent.

The strong growth in operating profits reflected cost savings, higher newspaper circulation, strong growth in the outdoor advertising business and the consolidation of the Australian Radio Network since January 1st, 1999. When the impact of that consolidation is stripped out, turnover was 10 per cent ahead while operating profits rose by 14 per cent.

APN, which is 41.6 per cent owned by Independent News and Media, was looking for acquisition opportunities, particularly in the pay television, outdoor advertising and the Internet/telecoms markets, Mr O'Reilly said.

"We see Asia as an area with good growth potential in these markets," he added.

APN Digital, the group's new media division, has just acquired a 15 per cent stake in PeakHour, a business-to-business Internet company. Mr O'Reilly said his company had paid "very little cash" for this stake, with most of the payment to come from the use of APN advertising services.

The business-to-business Internet market was expected to be much larger than the business-to-consumer market, he said. APN was continuing to develop its 17 web sites, he added.

Group post-tax profits rose by 51 per cent to Aus$24.4 million. But higher payments to minority shareholders - up to Aus$7.6 million or 31.4 per cent of after tax profits from Aus$1.6 million or 9.9 per cent - reduced profits for the six-month period to Aus$16.7 million.

Earnings per share were 13 per cent ahead at 6.9 Australian cents (4.06 cents). Shareholders will get a 12 per cent increase in the interim dividend to 4.6 cents per share. The company will pay out Aus$11.23 million in interim dividends, up from Aus$9.8 million, resulting in retained profits for the period of Aus$5.5 million.

Mr O'Reilly said all operating divisions performed well producing higher operating margins, particularly the outdoor advertising division which recorded a 46 per cent jump in operating profit.

The latest results show a 10 per cent rise in profits at the regional newspapers, a 9.7 per cent increase in broadcasting profits and a 38 per cent profits increase at Radio Network of New Zealand.

The improvement at the regional newspaper division, comprising 13 daily titles, reflected cost savings from the centralisation of classified call centres and some administrative and financial services and a rise in circulation after investment in the products and in promotions.

The radio division increased local revenue despite a flat national market and reduced costs following a restructuring of the sales force and the automation of some stations.