WEST Australian Newspapers has reported a lift in third-quarter net profit and forecast solid growth on the back of the booming WA economy and upgraded printing presses.
WAN says net profit rose 16 per cent to $29.6 million for the third quarter to March 31, 2008.
The company`s normalised earnings were up 13 per cent to $31 million for the March quarter - a result it said would have been better but for the campaign by Seven Network chairman Kerry Stokes to gain seats on the company`s board.
WAN said the costs of meeting Seven`s requisition for an extraordinary general meeting tallied $1.4 million in the period, both in direct meeting costs and in providing shareholders with information.
Mr Stokes is seeking to oust all but one of WAN`s five-member board and is hoping to replace them with himself, Seven director Peter Gammell and two other independent directors.
Seven, WAN`s largest shareholder with a 20 per cent stake, said today it has appointed Korn Ferry to prepare an independent report on the nine external candidates for the WAN board.
Mr Stokes said the process would result in an objective review of the candidates.
Seven says the report is expected to be completed on April 14, at which time it will advise the market of the two candidates it will vote for at the WAN general meeting on April 23.
Mr Stokes has previously attacked the WAN board saying its flagship publication has a declining readership and circulation despite the state`s boom-time prosperity.
WAN said that while ad revenue in some segments had weakened, the upgrade of its printing presses in suburban Herdsman had allowed significant cost savings and opened new opportunities.
"As forecast at the half year, revenue in particular advertising segments has weakened, primarily national display and employment," the company said today.
"However, the revenue opportunities provided by the Herdsman upgrade and the strength in Western Australian economy should allow the company to continue solid growth overall."
The company`s 13 per cent lift in normalised earnings was assisted by a 4.7 per cent increase in revenue and a 6.1 per cent cut in expenses at its main division, The West Australian newspaper.
Total reported revenue in The West Australian rose 3.7 per cent to $273.7 million for the nine months to March 31.
Advertising sales rose 5.8 per cent to $210 million, while circulation revenue - from newspaper sales - fell 4.7 per cent to $55.9 million for the nine months.
WAN`s internal data showed its Saturday edition circulation increased by 3669 during the third quarter to 348,101. Its weekday edition had declined by 1931 to 196,485, however.
WAN said it expected to see an increase on the January to March figures for the next two circulation audit periods, but conceded the sales are expected to be below that of last year`s comparative periods.
WAN said the final dividend for fiscal 2008 is expected to exceed the previous financial year`s dividend of 31 cents. Share this article
