The O’Reilly family’s APN News And Media Ltd says its revenues and profit for the calendar year so far are ahead of last year.
"The board noted that for the year to date, revenues and profit were ahead of the prior year in challenging market conditions," the retiring chairman, James Parkinson told shareholders yesterday at the AGM.
"Assuming such conditions do not deteriorate, the board expects that APN’s broad range of high quality media assets to again perform satisfactorily in 2008."
A broadly general forecast that left shareholders none the wiser as to the extent of the improvement. They would have preferred at least some numerical estimate of the improvement for the Australasian regional newspaper publisher, radio operator and outdoor advertising group.
The outlook for New Zealand’s economy is looking more problematic by the month as house prices and sales ease, bank lending drops and exports slow.
The market reacted adversely to the unclear guidance, marking down the shares to $4.06, a fall of around 3% or 14 cents. They touched a day’s low of $3.93, which is actually a 52 week low.
That compares to the $6.20 a share on offer in 2007’s rejected buyout from the O’Reilly family interests and Providence Partners, a US private equity group based in New York.
APN made a net profit of $167.4 million in calendar 2007, up 5% on the previous year.
Mr Parkinson, who retired after the meeting and is being replaced by Gavin O’Reilly, noted that it was business as usual for the group, which is involved in publishing, broadcasting and online advertising in Australia and New Zealand, despite the ongoing tightness in global credit markets.
"APN is well placed to withstand continued volatility having re-negotiated credit facilities in October 2006, well prior to this deterioration," he said.
The company has no material debt maturities until 2010, with some maturities extending to 2012.
"Furthermore, the limited amount of current interest bearing liabilities in the balance sheet are covered by existing credit lines and surplus cash," he said.
"APN’s overall debt levels remain reasonable, allowing us ample capacity to fund strategic growth opportunities should they arise."
Mr Parkinson also told shareholders that their rejection of an offer from Independent News & Media plc to take over the company had been the right one.
"As a company, we have moved on," he said.
"It is up to individual shareholders to judge whether the decision by some to reject the $6.20 per share proposal was justified.
"However, the subsequent events in the market certainly show that the decision to recommend the proposal to shareholders was the right one."
The takeover was rejected because 75% of APN’s shares didn’t vote in favour. The O’Reilly interests were excluded from the vote.
