APN $A156m non-cash impairment charge

NZPA

Thursday 18th August 2011

APN News & Media has made a non-cash impairment charge of $A156 million ($NZ197m), principally associated with its metropolitan newspapers in this country.

"This accounting treatment adjusts the valuation of those assets in line with prevailing international benchmarks and current market conditions, and follows a review by the new chief executive officer Brett Chenoweth," the company said today.

The charge did not diminish directors' confidence that those titles would continue to be a strong contributor to future group earnings and cash flows.

The company’s other intangible assets, particularly those in Australia, were well in excess of their book value, APN said.

Due to the impairment charge, APN reported a net loss after exceptional items for the six months to the end of June of $A98.3m.

The company also reported a 36 percent fall to $A21.8m in half year earnings before interest and tax (ebit) from its New Zealand Media unit, with performance hit by a weak economy and devastating earthquakes in Christchurch.

Half year ebit from the company's New Zealand radio business rose 6 percent to $A4.8m as it took an increased advertising share.

For NZ Media, which included for the first time results from digital group buying business GrabOne, the market had been subdued for much of the half although declines had moderated in June and July, APN said.

Real estate was down 11 percent and employment down 15 percent, reflecting subdued underlying economic conditions for housing and labour. Overall, Auckland fared slightly better than regional areas.

NZ Media's half year revenue fell 5 percent to $A147.9m, although it was flat in local currency terms. NZ Radio revenue was flat at $A40.3m and up 6 percent in local currency.

Despite the Christchurch quakes and the effect of a slow economy, the New Zealand radio market overall was up more than 3 percent, continuing a return to growth first seen in the second half of 2010 after a long period of contraction, APN said.

The Radio Network lifted market share every month for the half, with solid gains in agency advertising, increases in digital advertising of 54 percent and an expansion in its ebit margin.

For the group as a whole revenue was flat at $A508m, while net profit before exceptionals was down 46 percent to $A21.8m.

APN said the outcome was in line with guidance provided in May.

In this country APN's publications included The New Zealand Herald, seven regional dailies and more than 40 community newspapers.

Its national radio networks include NewstalkZB, Classic Hits and Coast, while its magazine unit included the New Zealand Woman’s Weekly, and Listener. APN also has outdoor advertising activity.

APN's shares were up 7c to $1.20 on the NZX around late morning.

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