APN News & Media is hoping to sell its Queensland and New South Wales newspaper division Australian Regional Media (ARM) as the decline in print media continues.
ARM includes 12 regional daily newspapers, 60 community newspapers and over 30 regional news websites and mobile sites.
Print’s demise is hitting country papers as hard as its city counterparts, with revenue for ARM dropping 7% year-on-year to $188.5 million, despite continued audience growth, thanks primarily to digital channels, to around 1.6 million.
APN, which has assets in Australia, New Zealand and Hong Kong, today announced a 2015 full year loss of $10.2 million, largely due to a $50.8 million impairment of its news assets.
APN posted a $11.5 million net profit in 2014.
In the investor presentation announcing the results today, the ARM business was described as being inconsistent with APN’s long term ambition and requiring additional investment to fast-track the move to the digital era. The company managed to cut costs in the print division by $40 million, but decided top stop investment in digitisation, despite implementing a reasonably successful paywall strategy in 2015.
CEO Ciaran Davis said that while the business was a “long-term supporter of regional publishing” it had to focus on growth assets and opportunities.
He says $40 million in costs have been stripped from the newspapers and the digital side of the business is growing, but the group has decided not to sink more money into the division.
“We have therefore commenced a process to divest ARM. New ownership should give ARM the flexibility to invest where required, to continue to providing quality news and content to its audience, without having to compete for APN’s capital,” he said.
The company is already in talks with a number of interested buyers.
APN’s radio division, ARN, which includes Kiis FM, Pure Gold and iHeartRadio, saw revenue grow by 22% on the previous year to $221.1 million, with an EBITDA of $82.8 million, up 25%. The radio business is continuing to take market share.
The Adshel outdoor advertising division was “performing strongly” and set to increase, with Adshel LIVE “driving solid revenue growth”, and 270 roadside digital panels rolled out from October 2015. Revenue was up 8% to $159.5 million, and EBTIDA up 4% to $38.3 million, although costs grew 10% to $121.2 million.
But Hong Kong Outdoor was another drag on the group, with revenue down 27% to $37.9 million
Overall, group revenue was flat at $850 million. The company is not paying a dividend again this year.
The decision to shed the print division seems to have been welcomed by the market, with APN shares rising 6% to close the day at $A0.53.
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