ARN reports bumper profit
APN, the parent company of the Australian Radio Network and NZME has released the half-yearly financials to 30 June today, with ARN the standout performer. The release also marks the commencement of Ciaran Davis in his new role as CEO of APN; today is his first official day in the new position.
Overall, APN has reported an increase in revenue to $427m (on the previous calendar period), whilst EBITDA has largely remained flat. The company has reported a slight increase in Net Profit to $25.1m.
Ciaran has spoken about the APN financials saying;
“The Australian Radio Network (ARN) continues to have strong market leading positions in key metro markets across Sydney, Adelaide and Brisbane, and there are very encouraging signs from the launch of KIIS 101.1 in Melbourne and the investment in Perth’s 96FM, which is integrating well into the KIIS network.
A number of revenue growth strategies are in place to maintain ARN’s positive momentum.
NZME revenues are tracking in line with the market forecast released in November 2014 and good strategic and operational progress has been made with the integration of the three New Zealand businesses in what has been a challenging advertising market and generally weak economy.”
The divisional results show the growing importance of radio to the APN business;
APN’s report outlines the various divisions performance in further detail, saying;
Australian Radio Network
In the first half of 2015, ARN continued to build on the success it experienced in 2014 and maintained its position as Australia’s number one metropolitan radio network by audience.
In a robust radio market up five per cent, ARN grew its revenues 29 per cent due to revenue generating investments made in Perth, Melbourne and Drive. Agency revenues, which are up 45 per cent overall, continue to drive overall revenue growth. EBITDA grew 26 per cent while costs grew 30 per cent year on year.
The cost growth is due, in part, to the 96FM acquisition and integration which is well on track and beginning to deliver national benefits for ARN. Cost growth is also attributed to increased revenue related costs, content strategies and additional marketing. Fixed cost growth is expected to return to nominal levels in 2016.
From an audience perspective, ARN’s stations continued their leadership positions across Sydney, Brisbane and Adelaide throughout the day and in the commercially important breakfast slots.
In Melbourne, Gold 104.3 is now the number one FM radio station. Its relaunched KIIS 101.1 has experienced a rise in market share, increasing audience in the competitive breakfast segment from an average of 6.5 in 2014 to 7.1 in the latest survey.
The Hughesy and Kate Drive show, which launched at the beginning of the year and has already been syndicated into 96FM as part of the station’s integration into the KIIS network, has quickly built a strong audience and is the leading FM Drive show in Melbourne and Adelaide and second in Sydney and Brisbane.
At 96FM in Perth, ARN is working hard to find the right balance between maintaining the station’s historically strong local position and simultaneously integrating it into the KIIS network. In addition to the Hughesy and Kate Drive show, Kyle and Jackie O’s ‘Hour of Power’ at 6pm is being broadcast into 96FM.
In a challenging Q2 agency market, NZME Radio revenues for the half were down two per cent year on year to NZ$60.3m. EBITDA was NZ$10.8m.
Agency advertising revenues were down eight per cent on the prior year while direct revenues were up two per cent.
NZME remains the number one radio network across the key categories of news, sport and entertainment and following an increased focus on driving digital traffic to its sites, NZME Radio also has the number one and two radio websites in the country.
Emotive & iHeart
Earlier this year, content marketing agency Emotive launched with APN as a founding investor and it has fast become one of the country’s top content marketing agencies working with clients such as Woolworths, Optus, Flight Centre, Westpac and Subway. Revenue and EBITDA of the business is ahead of expectations.
Content marketing is a commercial area APN believes will experience strong growth over the coming years with 89 per cent of marketers now investing in the capability.
As part of the investment, Emotive is also working with iHeartRadio in Australia to accelerate the digital radio and events business’ commercial content and brand opportunities, creating environments that attract advertiser and brand integration.
In 2015, iHeartRadio launched 12 new stations with specialised content opening up more advertiser and revenue opportunities. Consumer engagement levels with the platform are high with downloads up 19 per cent to 655,000 and mobile sessions up 31 per cent.
iHeartRadio in New Zealand continues to deliver new revenue opportunities.
In the first half, it delivered three successful events and continues to play an important role in a broad range of advertising solutions. As a result, it now has 377,000 registered users and revenues have grown 17 per cent year to date.