INM - APN Trading

Highlights of Quarter 3 trading by Division are as follows:

The New Zealand Herald

The New Zealand Herald continues to perform above expectations, with double-digit revenue growth throughout the Third Quarter. Advertising volumes in the quarter increased 9.7% on the same period in 2002, with advertising yield increasing 6.2%. An increased focus on yield management has enabled the Herald to achieve good margin gains. All advertising categories performed well in the period, with Retail and National in particular driving good growth in overall advertising revenue. Forward bookings are also encouraging in the lead-up to the Christmas/New Year period. Circulation in the audit survey for the six months from April to September is expected to be 1.8% down on the same period in 2002. Following a number of new initiatives, recent circulations have increased and are currently 2000 copies ahead of the corresponding period last year, averaging more than 208,000 per day. Divisional revenues on a local currency basis were ahead by 16% and EBIT by 18% compared with Quarter 3 2002.

Regional Newspapers

Strong advertising trends from Real Estate, Employment and Motoring continued through the Third Quarter for the Regional Newspaper Division. In Australia's seven Regional Publishing Centres, advertising yields were up 6.0% on the same period in 2002, representing a significant increase from the steady outcome for the first half of 2003. Advertising volume increased 5.1% in the Third Quarter. Circulations for the Australian regional dailies recorded the sixth consecutive audit period of circulation growth in the six months to September 2003. In New Zealand's four Regional Publishing Centres, Employment and Motoring grew strongly, achieving an overall increase in yield of 7.0%, with a 3.0% decline in volume year-on-year. Real Estate advertising, while still well up on 2002 levels, has moderated from the extremely high growth experienced in the first half. Divisional revenues in Australian dollars were ahead by 6.1% and EBIT by 20.5% compared with Quarter 3 2002.

Radio

The Radio Division continued the improved performance from the first half of 2003. Revenue in Australian dollars for the Third Quarter increased 16% and EBIT was up 41% over the relatively weak Quarter 3 period in 2002. In Australia, a good increase in agency advertising sales saw the Australian Radio Network grow its overall advertising market share by almost 2 full percentage points in the latest PricewaterhouseCoopers survey. In New Zealand, recent survey results confirmed APN stations as leaders in the largest markets of Auckland, Wellington and Christchurch. In both Australia and New Zealand, local direct sales continued to perform to expectations. The company welcomes the decision by the Australian Broadcasting Authority not to issue any further commercial analog radio licences for a period of at least five years following completion of the current round of licence auctions.

Outdoor

The Divisional review announced at the interim result has progressed through the Third Quarter, and APN continues to assess the future of the Australian Posters business, with a view to either restructuring or selling the operation. Negotiations are ongoing with a number of interested parties and should be concluded by the end of 2003. Revenues from continuing operations have improved in the latter part of the quarter and this trend has continued into Quarter 4. As foreshadowed, we continue to be of the view that the recovery in this Division will be seen to better effect in 2004 and will gather momentum as that year progresses.

Print & Specialist Publishing

The New Zealand commercial print operations are benefiting from good forward print contracts leading into the busy pre-Christmas period. The business has secured a major contract to print the national Pay TV magazine Skywatch from December this year. In September, the Division sold the Security Print business in Auckland to Moore Gallagher. The sale was part of an ongoing review process of smaller business units. Assessment of the future structure of other business units is ongoing.

Refinancing

The $102 million capital raising undertaken immediately after the announcement of the 2003 interim result was significantly over-subscribed. The company is confident of a successful outcome to the debt restructuring foreshadowed at the time of the interim announcement, producing a stronger balance sheet and significant interest savings in 2004. The restructure will be finalised prior to the year-end.

Outlook

APN has enjoyed consistent strong advertising growth across all its major markets since the beginning of Quarter 4 in 2002. Forward bookings are encouraging and advertising across the major Divisions remains buoyant. These conditions are expected to offset the impact of a weakening New Zealand dollar, and accordingly the company remains confident of matching or exceeding the consensus Net Profit After Tax forecast of $A100 million for the current year. The recent improvement in national advertising in Australia looks likely to provide further benefits, in particular in 2004."

ENDS 23th October 2003