APN expands radio reach
Media company APN will expand its reach into radio by acquiring full ownership of the largest stations in New Zealand and Australian markets.
The company will pay A$246.5 million ($268.1 million) for ClearChannel's 50 per cent share in The Radio Network (TRN), which includes stations Newstalk ZB and Radio Hauraki, and Australian Radio Network (ARN).
The acquisition will be funded through a five-for-nine pro-rata accelerated offer of new shares to raise A$132m at A36 cents a share.
APN key shareholders, Independent News & Media, Allan Gray and Baycliffe, who together own more than half of the company, support the buyout.
As part of the deal ClearChannel will offer APN a 10-year exclusive licensing agreement for its digital radio platform iHeartRadio, which was launched in New Zealand in August 2013 and hosts TRN radio shows.
TRN chief executive Jane Hastings said iHeartRadio was central to growing younger audiences, which would shore up its position as market leader.
"Securing new talent such as Fletch & Vaughan and Rachel Smalley, refreshing our brands and programmes across the network and now iHeartRadio has a huge cumulative impact on the whole TRN network," Hastings said.
The acquisitions would provide greater traction with advertisers and the confidence TRN could continue to grow, Hastings said.
The push into radio comes after APN sold several magazine titles, including the Listener and NZ Woman's Weekly to Bauer New Zealand.
APN, which owns the New Zealand Herald also posted a A$2.6m profit after tax for the year to December 31, turning around a A$507m bottom-line loss in the prior year.
Total revenues were up 0.4 per cent to A$833m, from A$830m.
Total expenses dropped 1.4 per cent on the 2012 figure to A$768.2m, from A$779.2m.
Shareholders would not be paid a dividend, the company said.
APN chief executive Michael Miller said the financial result was pleasing after the loss in 2012, and the company was beginning to see benefits from cost-cutting.
"The results reflect strong earnings growth in our radio businesses as they increased market share, a record result at Adshel, an improved second-half performance from our publishing businesses, as cost-saving benefits start to flow through," Miller said.
Cost-cutting included redundancies in the company's publishing division cost A$10.6m.
Miller said the move to wholly own TRN and ARN would be "transformational" for APN.
"The majority of our earnings are now in businesses that have been consistently growing and have considerable further upside.
"It also gives us flexibility to pursue new revenue generating opportunities across our portfolio of businesses," he said.
However, revenues from APN's traditional print business slid, with circulation profits down 1.8 per cent per cent to A$129.9m.
Advertising revenues across the company dropped 0.5 per cent to A$687.2m.
The New Zealand print and digital unit earned the largest share of revenues for the company, generating A$282.5m, while TRN revenues were A$102.2m, a 9 per cent improvement on 2012.