Difficult advertising markets pulled back pre-tax profits at APN News and Media, which is 40 per cent owned by Independent News & Media, in the six months to end June. APN is widely expected to be used by Sir Anthony O'Reilly as a vehicle for a takeover bid for Fairfax, Australia's largest newspaper group.
The regional newspaper, broadcasting and outdoor advertising group reported a 5.3 per cent fall in pre-tax profits to 46.7 million Australian dollars (€26.79 million).
Revenue was 3.2 per cent lower at Aus$285.2 million. However, a lower tax charge meant that profits after tax were 1 per cent ahead for the period, at Aus$22.1 million.
APN declined to make any comment on "speculation" about a bid for Fairfax.
On the results it said a "tough" advertising market affected all divisions in the first half. On the outlook for the year, the group said it was "hard to predict, with advertising remaining volatile, albeit with some evidence of a pick-up in trading conditions in our regional newspapers".
Conditions in the first half were particularly "challenging" for regional newspapers but tight cost control mitigated the impact of a fall in revenue, the group said.
While revenue in this division was down by Aus$ 9.1 million, earnings before interest and tax were down by just Aus$4.4 million. In the current half the group said there had been some pick-up in trading in some regions in response to improving economic conditions.
Profits increased at the radio and outdoor advertising divisions. The increase in the broadcasting division was marginal - earnings before interest and tax rose to Aus $23.1 million.
Advertising revenue was down on the strong figures for the first half last year which was boosted by the lead-up to the Sydney Olympics. But APN said "sensible" cost controls allowed the division to report a small rise in profits.
Attention to programming should improve results later in the year, it said.
In the outdoor division, revenue was up 6 per cent to Aus $86.2 million, boosted by the Kablow acquisition and new contracts, while earnings before interest and tax rose by 5 per cent to $14.1 million.
The group is looking at further acquisition opportunities in Asia.
