wan expects solid profit growth
WAN expects solid profit growth 04/05/2006 06:00:59 PM
West Australian Newspapers has posted a 40 per cent fall in earnings for the first nine months of this financial year, due to slow trading conditions in the March quarter.
But the publisher is confident of solid profit growth for the full year, as advertising revenues remain solid.
WAN chairman Warwick Kent said after a slow start to the calendar year trading conditions had improved.
"The outlook for advertising revenues is solid without being buoyant," Mr Kent said.
"The company is confident its diversity of revenues will record solid growth in pre-abnormals profit again in 2005/06."
The Perth-based company's net profit for the nine months ended March 31 was $43.2 million, down from $72 million in the same period last year.
The result was dented by $50 million in one-off items, including $31.3 million for staff redundancies and an $18.7 million depreciation of the value of its old printing presses, which it is upgrading.
Excluding those items, net profit was $78 million, and a little higher from $72.6 million last year.
Mr Kent said the strength of demand was reducing real estate and new home advertising volumes in the short term, and was a positive indicator in the future confidence in the state.
The company's flagship daily newspaper, The West Australian, was performing well and its regional newspapers and other publications were also growing, he added.
The company also lifted its forecast annual pre-tax profit for the Hoyts cinema business due to the release of a number of major movies in May and June.
"The company estimates its share of the full year pretax profit from Hoyts cinemas will be above previous guidance given and now expects it to exceed $13 million in 2005/06," Mr Kent said.
The company said a pre-tax profit of $9.3 million for Hoyts for the nine months was encouraging and reflected improved admissions in the March quarter.
WAN bought a 50 per cent stake in Hoyts for $173.5 million in January 2005.
In the nine months, revenue from ordinary activities rose to $293.8 million, from $276.4 million.
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