APN profit set to top A$120m

Shares in APN News & Media, publisher of the New Zealand Herald, hit a 3 1/2-year high in Australia yesterday after the group said full-year earnings would beat April forecasts.

Strong employment, real estate, and motoring advertising in its publications and better radio advertising prices were predicted to boost net profits for the year to December from A$103.5 million ($111.6 million) last year to more than A$120 million.

Chief executive Brendan Hopkins said the group could deliver on the promise even after it had absorbed the costs of setting up its new Herald on Sunday newspaper.

"The first seven weeks of the second half have seen a continuation of strong double-digit [earnings] growth. While it may be challenging to maintain a similar growth rate through the year, [earnings] growth remains above expectations as we approach the fourth quarter."

The shares rose to A$4.44, but later closed up 15Ac at A$4.42.

Half-year net earnings rose from A$44.67 million to A$56.01 million on sales rising from A$570 million to A$599 million. The half-year dividend rises from 6.5Ac a share to 8Ac.

Operating profits at the New Zealand national publishing arm, which includes the flagship Herald titles as well as the group's New Zealand magazines, rose from A$40.5 million to A$46.4 million - 37 per cent of total profits.

Helped by a 17-year low in New Zealand unemployment, job advertising in the Herald surged 23 per cent. Property advertising was also up 14 per cent.

The Herald on Sunday, due to be launched later this year, would be profitable within three years based on a circulation of 100,000 copies, APN said.

Meanwhile, the group's regional newspaper side, with 23 regional daily papers and more than 90 non-daily titles, increased its earnings from A$36.1 million to A$44.9 million. It was also lifted by strong employment advertising and good demand for space in real estate and motoring sections.

APN is to invest A$25 million upgrading its Sunshine Coast presses to take advantage of Queensland's population growth.

"We are not seeing any slowing in the economy, businesses in New Zealand and Australia are performing at very attractive rates," Hopkins said.

Operating profits at the radio arm, which includes Classic Hits and NewstalkZB, as well as a network of Australian stations, rose from A$21.5 million to A$26.1 million.