DIGITAL growth - in both revenue and audience terms -- continues to be one of the high points for publisher Australian Regional Media, half year profit results announced today confirm.
As ARM's owner, APN, reported revenue growth of 5 per cent across its businesses, it revealed digital revenues at ARM surged 40 per cent on a year-on-year basis.
The announcement came as ARM, publisher of this title, confirmed a digital subscription model would be in place at one of its flagship titles,, The Chronicle in Toowoomba, from next Tuesday.
Significantly, ARM has partnered with News Corp to give paying digital readers access to not only The Chronicle, but also the Courier-Mail for a launch price of $3 a week.
Digital audiences have continued to drive forward, with ARM now reaching 1.8 million people each month through print and online, a record audience in its history.
It makes the new circulation play into digital subscriptions important for the company's future.
APN's new chief executive, former Australian Radio Network boss Ciaran Davis, told staff in an email this morning: ''This marks a significant moment in the history of publishing in Australia as the country's first regional news website implements a digital subscription model.''
He was confident it would work, based on the company's reputation as robust providers of content.
''Delivering good, strong local content is critically important. That strong local content is always going to win through.''
ARM's revenues at the half year were down 5 per cent year on year while its EBITDA ($8.2m) was down 22 per cent.
"ARM's revenues reflect a soft Q2. The business continues to focus on costs with $10m of annualised
cost saving initiatives being implemented across 2015 and 2016,'' Mr Davis, who has taken over from the departing Michael Miller, said in a release to the ASX this morning.
A strong Q1 was driven by increased government and real estate revenues.
Local advertising revenues remained resilient, down just two per cent on the prior year while cover
price increases have helped in slowing circulation revenue decline. Chief financial officer Jeff Howard said the ARM business was traditionally geared to a stronger second half, and he was confident that would happen again this year. ''We expect to see a lift, and we expect to see a benefit in cost savings,'' Mr Howard said.
Overall at APN, revenue from continuing operations was up five per cent to $427.6m and net profit after tax before exceptional items up three per cent to $25.1m
APN has extended its debt facilities to mature in 2019 with a syndicate of domestic and international banks. The facility is worth $655m.
Due to strong cashflows, APN's leverage is back below 3 times after stretching from 2.8 at December to 3.1 for the acquisition of 96FM.
No interim dividend will be paid.
In a robust radio market up five per cent, ARN grew its revenues 29 per cent due to investments made in Perth, Melbourne and the drive slot.
Mr Davis expected that to continue, despite his move into APN's top job.
''We have a strong management team in place there, and sound growth structures.''
Meanwhile, an issue he was concerned about was the Save Our Voices campaign being pushed hard by regional TV businesses.It was an attempt to have the reach rule, which stops large TV companies having access to more than 75% of the country's audience, changed. APN believed strong regional newsrooms would survive current structural challenges, and any change to the rule could disadvantage other media companies like APN.
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