APN News & Media, the Australasian publisher of the NZ Herald, is aiming to cut A$25 million of costs this year, with the bulk to come from its New Zealand operations, shareholders were told at the annual meeting in Sydney.
New Zealand Media chief executive Martin Simons, said APN’s major cost restructuring projects have been completed, with the outsourcing of editorial and advertising production, the centralisation of advertising sales and editorial content, and the sale on non-core titles.
Some A$18 million of cost saving are being targeted for 2013 and a further A$10 million in 2014, according to Simons’ presentation materials. APN’s NZ Media headcount has about halved in the past five years to 1,037 currently.
APN posted an A$456 million loss in 2012, reflecting writedowns on the value of goodwill and its newspaper mastheads as it grapples with what is a global struggle for newspapers facing declining advertising sales and more online competition.
Its response in New Zealand has included relaunching the Herald in compact format, moving regional dailies to compact format and morning delivery, putting the Listener behind a paywall and preparing to put other titles behind metered paywalls. The company was also widened its portfolio of digital ventures, moving to 100 percent of daily deals site GrabOne last year and taking a controlling stake in online retailer brandsExclusive.
Chairman Peter Cosgrove told the meeting that APN has recorded mixed results in the first quarter of 2013.
Cost savings at NZ Media have more than made up for a decline in revenue which is itself moderating as the New Zealand economy improves. Pretax earnings are tracking slightly ahead of the same time last year.
Australian Regional Media “had a tough quarter” with a 13 percent decline in revenue, reflecting a slowdown in the mining sector, falling government advertising and the impact of floods.
Australian Radio Network “continues to perform strongly, with increases in revenue and market share,” he said. Radio Network in New Zealand gained market share in the first quarter. Its outdoor advertising businesses are “performing well” while all digital ventures have produced strong revenue growth and will contribute to operating earnings this year, he said.
The company is continuing its hunt for a new chief executive after Brett Chenoweth resigned earlier this year after major shareholders Independent News & Media and Allan Gray Australia opposed a planned capital raising.
The shareholder lobbying caused a boardroom stoush which installed Cosgrove as chair and saw the departure of his predecessor Peter Hunt and independent directors Melinda Conrad, John Harvey and John Maasland. Independent director Kevin Luscombe also retired in April as planned
Shares of APN fell 2.5 percent to 38.5 cents on the ASX and have gained 68 percent this year. The shares are rated ‘underperform’ based on the consensus of 11 analysts polled by Reuters.