APN to resume paying dividends as outlook for 2010 improves
Published 24/02/2010 | 05:00
APN News & Media said the outlook for 2010 has improved, adding it will resume paying a dividend after the financial crisis led the Australian media giant to slash costs and scratch dividend payments last year.
"The 2010 year has started more positively. While there is still some inconsistency on a week-to-week basis, the broad trend is towards a resumption of normal trading patterns, although forward bookings remain short term," APN chief executive Brendan Hopkins said as the results were published.
The group will pay a dividend of four Australian cents (2.65c) a share, he added.
Independent News & Media, the owner of this newspaper, holds a 32.2pc stake in APN.
The results prompted JP Morgan analyst Laurent Horrutby to raise his rating on the shares to neutral from underweight and set a target price of A$2.19 a share.
APN said back in November that the financial crisis had curbed profit. In the event, sales fell 14pc to A$1.03bn in 2009 while profit after tax was down 34pc at A$94.2m.
The decline in sales was partially offset by cost cutting.
"Cost performance was good with total costs down A$78m, furthering the company's aim to improve operating leverage in all its markets, and putting in place a lower cost base from which to grow the business," Davy Stockbrokers analyst Stephen Furlong said in a note yesterday.
The company's Australian division recovered from the economic downturn quicker than the New Zealand division, Mr Hopkins said.
Banks, car makers and phone companies have resumed advertising with the company's outdoor advertising division, he added.
"APN's markets were not immune from the global financial crisis. However, through a combination of effective cost management and targeted sales campaigns, the company was able to mitigate its full effects," Mr Hopkins said.