Despite difficulties, APN reports record profit

BY A CORRESPONDENT
February 27, 2007

APN, the Australian unit of Independent News & Media, has reported record profits.

Sir Anthony O’Reilly, chairman of Independent News & Media and the Sydney-based APN News & Media Limited, in which Independent News & Media PLC has a 41.6% shareholding, on Tuesday announced a record net profit, after tax, for the fiscal 2006 at $159.5 million – a 7% increase over the prior year.

Earnings per share during the period grew by 10%.

Last week, APN had received an offer by a consortium led by Independent News & Media to acquire all of its shares at Australian $6.10 a share, to be voted on by shareholders. An independent sub-committee of the Board of APN News & Media has recommended the offer in the absence of a superior proposal.

A meeting is expected to be held in late April 2007, where shareholders will vote on the proposed scheme. Full particulars of the scheme will be set out in documents expected to be mailed to shareholders in late March 2007.

APN News & Media achieved record profits despite difficult trading conditions in its three main metropolitan markets in Australia in 2006.

APN said its markets of Auckland, Sydney and Melbourne showed no rise, or a fall in growth, and the group reported underlying trading revenue down 2% at A$1.26 billion, when not adjusted for currency movements. The Sydney radio market was down 5%, the group said.

However, the group said the net profit after tax rose by 7% over the prior year to A$159.5 million and earnings per share rose by 10% to 34.3 cents.

APN chief executive Brendan Hopkins said readership numbers across all major titles performed well, with market share being retained across all major advertising categories.

He said advertising was sluggish, though radio recorded a satisfactory result in difficult trading conditions.

Independent News & Media , which owns a 41.6% shareholding in APN, has teamed up with US-based buyout groups Providence Equity Partners and Carlyle, to buy the remaining stake, and last week raised its offer to A$6.10 a share from A$6.05.

APN said trading for 2007 to date is in line with expectations and in line with the prior year. Following the proposal by the Independent News & Media-led consortium to acquire all the shares in APN, detailed disclosures will be sent to APN shareholders.