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APN savaged on poor ad outlook

AAP logoAAP 22/08/2016 Marty Silk

More than $480 million has been wiped off APN Outdoor's market capitalisation - over a third of its value - after the advertiser cut full-year earnings and revenue forecasts.

APN said on Monday the extended federal election campaign and count, coupled with the Olympics, had caused a significant reduction in market activity.

The company now forecasts revenue for the 12 months to December 31 to rise between six and eight per cent, down from its previous guidance of eight to 11 per cent in February.

APN also cut guidance for earnings to between $79 million and $84 million, down from $84 million to $88 million six months ago.

Investors hammered APN shares to a six-month low of $5.33 on Monday, the stock finishing down $2.91 or 35 per cent.

The company said that, while outdoor advertising had been solid in the first half of the year, revenues were weighted to the second half.

"We have seen a significant reduction in market activity in recent weeks for the September to November period which has arisen, at least in part, from a combination of an extended national election process closely followed by the Olympics," the company said in a statement.

The shares dropped despite APN Outdoor lifting half-year net profit by almost 50 per cent to $19.5 million on the back of strong growth in airport and rail markets, as well as in its traditional billboard category.

Revenue from the advertiser's large billboards business rose by 5.2 per cent to $65.1 million.

Meanwhile, revenue from APN's airport advertising business rose by 38 per cent to $14 million and for its rail business by 27 per cent to $10.1 million.

The outdoor advertising company posted overall revenue growth for the six months to June 30 of 10 per cent to $150.6 million, while post-tax net profit was up 49 per cent.

The rise was 51.6 per cent on a statutory accounting basis.

APN OUTDOOR'S MIXED HALF YEAR RESULTS

* Net profit up 49pct to $19.5m

* Revenue up 10pct to $150.6m

* Full-year forecast lowered to 6.0-8.0pct, from 8.0-11pct in Feb

* Full-year earnings forecast lowered to $79m and $84m, from $84m-$88m

* Interim dividend up 2.0 cents to 6.5 cents per share, fully franked

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