APN results tomorrow

APN News & Media, the Australian subsidiary of Independent News & Media, releases financial results for the six months to end June tomorrow.

Though Independent owns only 40.2% of APN, it consolidates 100% of the Australian firm’s income into its own accounts, making the division the largest contributor to annual sales and profits. In a trading update in June, Independent told shareholders that its revenues in the six months to end June would be 3% higher than last year and that adjusted earnings per share would grow by at least 10%. Tomorrow’s results from APN should provide evidence if the company is on track to meet that target.

Company profile: APN News & Media is one of the largest publishing and advertising groups in Australia and New Zealand. The company’s divisions are: publishing of newspapers, magazines, directories and general printing; radio stations and outdoor advertising. APN publishes 23 daily and more than 100 non-daily newspapers across Australia and New Zealand, including the New Zealand Herald.

Headquarters: Sydney, Australia.

Number of employees: 5,644.

Senior Management: Chairman James Parkinson (salary of Aus$120,000, €72,340, in 2005), chief executive Brendan Hopkins (salary of Aus£3.08 million, €1.86m, in 2005), chief financial office Peter Myers (salary of Aus$950,000, €572,700, in 2005).

Current share price: Aus$4.91 (€2.96). 52-week share price high: Aus$5.40 (€3.26), 52-week share price low: Aus$4.43 (€2.67).

Market cap: Aus$2.3 billion (€1.39bn).

Dividend yield: 4.93%.

What to expect: Having produced a 14% rise in pre-tax profits at the half-way stage in 2005 (the fifth consecutive year of double-digit growth), APN is expected to see growth slow somewhat this year. Earnings per share are expected to be about 5% higher, with sales also expected to rise by around this figure as well. Brokers will be looking to the company’s management to say if the recently announced plans to liberalise cross-ownership rules on Australia present opportunities for acquisitions. APN has repeatedly been linked with a bid for rival publisher John Fairfax Holdings, but that acquisition would not have been allowed on competition grounds. With John Howard’s government ready to end those rules, the market will look to APN management to signal if it sees any potential takeover targets.

Analyst recommendations: A poll of nine brokers by Reuters has the stock rated as a Hold by seven and Underperform by two.