Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


APN ends shocker year with more masthead value write-downs

APN ends shocker year with more masthead value write-downs

By Pattrick Smellie

Feb. 21 (BusinessDesk) - Beleaguered APN News & Media, the Australasian publisher of the New Zealand Herald, has increased write-downs on the value of goodwill and its newspaper mastheads in its end of year result, to produce a net loss to Dec. 31 to A$455.8 million.

The decision to add a further A$151 million on non-cash impairments to the A$485 million already announced at the half-year result has effectively halved the total value of goodwill and non-amortising cash-generating units on APN's books from A$1.4 billion a year ago to $727.5 million now.

The result was presented by the company's new chairman, Peter Cosgrove, after a boardroom coup over the weekend in which the previous chair, three independent directors and former chief executive Brett Chenoweth resigned because major shareholders opposed raising capital to ease the company's woes.

The APN result was also affected by the company's sale of 52 percent of its APN Outdoor billboard advertising business into a joint venture during the year, cutting revenues and earnings accordingly.

Total revenue was down 13.4 percent to A$928.6 million, earnings before interest, tax, depreciation and amortisation were off 25.3 percent to A$156 million, and net profit after tax before exceptional items fell 30.4 percent to A$54.4 million.

However, on a continuing operations basis, stripping out the joint venture's impact, revenue rose 2 percent to A$857 million, while ebitda still fell 14 percent.

Unlike the first-half write-downs, which related only to New Zealand publishing assets, the bulk of the latest cuts is a charge of A$111.5 million against the value of the group's Australian regional newspapers, in part reflecting the impacts of the mining sector downturn and flooding in Queensland, where APN owns titles.

Notes to the accounts show the current asset valuations are highly sensitive to changes in advertising revenues, the assumed post-tax discount rate, and long-term economic growth rates in both countries.

For its New Zealand assets, a 1 percent decline in long-term growth would add further impairment of $14.7 million, a 1 percent increase in the discount rate would add $13.6 million, and a 10 percent fall in cash flow would have the biggest impact, wiping out $21.4 million.

Cosgrove highlighted the group's reduction in net debt by A$180 million during the year, with another A$40 million to A$50 million targeted in the current financial year.

"This will be delivered by organic earnings, including the cost reduction programme in publishing, as well as small asset and property sales," he said.

Today's announcement made no mention of the boardroom crisis, but appeared to make soothing noises about its plans for further cost-cutting in New Zealand and Australia.

Its New Zealand newspaper and magazine segment had delivered "substantial cost savings during the year", while advertising revenues fell by 8 percent, led by downturns in display and employment ads. The segment produced revenues of A$287.4 million, down 7 percent, and ebitda was down 23 percent to A$47.8 million.

However, the New Zealand assets, had "delivered its rejuvenation programme," with the relaunch of the New Zealand Herald - APN's largest single asset - in tabloid format. Other efforts to refresh its print products would continue this year, such as this month's relaunch of the Herald on Sunday.

The New Zealand media business had "a major cost reduction programme under way and is progressing with the sale of its publishing businesses in Christchurch, Oamaru, and Wellington."

With a half-share in The Radio Network, APN reported weak advertising in the New Zealand radio market although the Newstalk ZB network remained the country's top-rating network. TRN's revenue was down 2 percent at A$87 million, to produce 12 percent lower ebitda, at A$15 million.

The New Zealand outdoor advertising market was also difficult, with revenues down 19 percent, in part because of heavy advertising in the earlier year because of the Rugby World Cup.

The group's emerging digital operations, including the GrabOne and brandsExclusive shopping deal websites, produced strong revenue gains, up 367 percent to A$55.3 million and an 82 percent improvement in performance. However, investment in its growth contributed to an ebitda loss of A$800,000 for the year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news