Independent News & Media Regulatory News (INM)

APN NEWS & MEDIA LIMITED - RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2011

Ticker: (Bloomberg) INM.ID/ INM.LN and (Reuters) INME.I/ INME.L

Strong outdoor result moderates tough publishing market

·; NPAT pre exceptionals of A$21.8m down 46%

·; NPAT post exceptionals (including impairment charge) A$98.3m loss

·; Outdoor EBIT up 80%

·; Publishing markets slow to recover after earthquakes and floods

·; A$156m (pre tax) non-cash impairment

·; Dividend of 3.5 cents per share, fully franked

·; Two digital acquisitions announced

Dublin/London - 18th August 2011: Independent News & Media PLC's ['INM'] 31% owned associate APN News & Media Ltd ['APN'], today released its Interim Results for the 6 months ending 30 June 2011. Revenue was flat at A$508m, Earnings Before Interest and Tax (EBIT) before exceptional items was down 24% to A$66.5m and Net Profit After Tax before exceptional items was A$21.8m, down 46%.

This outcome is in line with the guidance provided by the Company at its Annual General Meeting in May. It follows a challenging period for the Company's publishing businesses, affected by weak retail markets and natural disasters. However, it also includes a strong contribution from the outdoor division and a solid performance from the radio division with increased advertising share in both Australia and New Zealand.

Included in the result for the first time are revenues and costs from GrabOne, a full six months of the Pacific Magazine licensing agreement and a number of other new acquisitions and initiatives. These helped the group deliver flat revenues year on year at a time when our publishing revenues were negatively impacted by a series of natural disasters.

The Company today announced a non-cash impairment charge of A$156m, principally associated with APN's metropolitan newspapers in New Zealand. This accounting treatment adjusts the valuation of those assets in line with prevailing international benchmarks and current market conditions, and follows a review by the new Chief Executive Officer Brett Chenoweth. Directors noted that the charge does not diminish its confidence that these leading New Zealand newspaper titles will continue to be a strong contributor to the group's future earnings and cash flows. Directors also noted that the value of the Company's other intangible assets, particularly those in Australia, are well in excess of their book value. Accounting rules do not allow the Company to offset this excess against the write-down.

Due to the impairment charge, Net Profit After Tax, after exceptional items was a A$98m loss.

The Directors declared a fully franked interim dividend of 3.5 cents per share, payable on 28 September 2011.

2011 Interim Result

*Excludes finance income

APN Chief Executive Officer Brett Chenoweth said: "This was a challenging six months of trading. While our publishing businesses in Australia and New Zealand have faced difficult economic conditions in their core markets, our outdoor and radio businesses have produced robust results.

"Our greatest challenge in the first half came from the publishing businesses in Australia and New Zealand. Consumer and business confidence in those local markets began to deteriorate late in the fourth quarter last year. The flooding in Queensland and the earthquakes in New Zealand exacerbated this general slowdown.

"In contrast, we have had a very solid half from our outdoor and radio businesses. Outdoor, with revenue up 11% and EBIT up 80%, is a standout performer. The division recorded excellent market share growth in Australia while in New Zealand a combination of organic market gains and the acquisition of the Oggi billboard business has taken our market share to 25%.

"The radio results reflect increases in audience and advertising share in Australia and New Zealand.

"We have also seen tremendous progress in the digital group-buying business GrabOne. It remains the clear market leader in New Zealand and has made solid in roads in Australia, launching into new categories in holidays and retail.

"We are driving hard against the strategic framework that I outlined at the beginning of the year. My focus is to rebuild shareholder value for APN by delivering operational excellence from our core activities, building earnings momentum from new product initiatives and investing in areas where value is emerging."

*Includes GrabOne

Australian Regional Media

Markets across Queensland and northern New South Wales began to slow towards the end of 2010, particularly those not exposed to the mining and resources sector. The widespread flooding across much of Queensland in the first quarter and weaker consumer and business confidence compounded the challenges faced by local businesses.

Many of APN's markets are yet to recover from these impacts with the multi-speed nature of the economy especially evident in markets around tourism centres, where the strong Australian dollar and a general slowing in domestic tourism has led to significant falls in local advertising.

While there has been positive growth in resource markets and employment growth in some of our regions, this has not been sufficient to offset shortfalls in other sectors of the economy. Overall, revenue was down 4% year-on-year, retail advertising was down 10%, property was down 13% while employment was up 6%.

This division is geographically dispersed with businesses spread across more than 1300km from Coffs Harbour in New South Wales to Mackay in Queensland. Consequently, our revenue shortfalls have had a substantial impact on the EBIT line as cost offsets proved difficult to implement quickly. Initiatives have now been introduced with annualised savings of A$7m and we are confident that costs in H2 will be below H1.

The restructuring included the closure of certain loss making magazine titles, the reorganization of our printing facilities and schedules which enabled us to move to close the Mackay and Bundaberg print plants as well as further centralisation of our pre-press advertising functions. In all, headcount has been reduced by 6.5% across the division.

Notwithstanding the difficult result there has been a number of key initiatives introduced during the period. Warren Bright was appointed as the division's Chief Executive in late May with the mandate to fully review the operating model of the business, to drive efficiencies and reinvigorate revenue streams.

APN operates in markets which enjoy some of the best long term growth prospects in Australia. APN is committed to serving those local communities and advertisers and is confident that Warren and his team will restore growth to this business.

New Zealand Media

The first half was marked by a weak New Zealand economy, coupled with the devastating impact of the earthquakes in Christchurch. While the market was subdued for much of the half, declines have moderated over June and July. Real Estate was down 11% and Employment was down 15%, reflecting the subdued underlying economic conditions for housing and labour. Overall, Auckland fared slightly better than the regional areas and recent macroeconomic indicators are more positive.

APN continues to invest in and improve its products. The New Zealand Herald remains New Zealand's leading newspaper brand, with more than twice as many readers as any other daily newspaper.

The New Zealand Herald grew circulation for the fourth consecutive audit and now sells 170,704 copies each day. The Herald on Sunday's audited circulation is now 98,082 sales each week, up 2.3% over the last 12 months. The Herald on Sunday is the fastest growing newspaper in the New Zealand market.

Importantly, there have also been new product initiatives in Motoring, Real Estate, Custom magazines and Lifestyle supplements, which have leveraged the penetration of The New Zealand Herald into the commercially important Auckland market. nzherald.co.nz remains the top news and broad content site in New Zealand.

In May, APN titles took out the major awards at the 2011 Canon Media Awards: Newspaper of the Year for The New Zealand Herald, Weekly Newspaper of the Year for the Weekend Herald and best overall New Zealand website for nzherald.co.nz.

Australian Radio

The investments made in ARN over the past 12 months in people, programming and marketing are beginning to deliver returns. A new management team is in place and new programming has been introduced across a number of markets with a rejuvenated brand presence.

Our Australian radio markets grew by 2.2% for the first half highlighting both the attractiveness and resilience of radio advertising. ARN grew advertising market share for the period, with revenue up by 3% on strong gains in direct advertising.

In the most recent survey, ARN delivered strong ratings gains, with 97.3FM the top rating station in Brisbane in the most recent survey, and Adelaide's Mix 102.3 the top rating FM station in that market. These improved audience numbers are expected to convert to improved agency market share in H2.

Much of the current focus has been on the performance of Mix Sydney, with the latest ratings for the 25-54 years demographic showing a share of 7.6% up from 6%.

New Zealand Radio

Despite the issues in Christchurch and the effect of a slow economy, the New Zealand radio market overall was up more than 3%, continuing the return to growth first seen in the second half of 2010 after a long period of contraction.

TRN delivered local currency revenue growth of 6%, lifting market share every month for the half, with solid gains in agency advertising, increases in digital advertising of 54% and achieved expansion in its EBIT margin during the period.

TRN has also been investing in the product and in the important market of Auckland, where TRN has four of the top five stations, the 10+ audience share increased to 49.9% which is the strongest result in three years.

TRN is poised for a strong second half as the radio rights holder for the Rugby World Cup.

Outdoor

In Australia, the overall Outdoor market was up 5.3% in the first half. APN Outdoor revenue grew by 11% in Australia with double-digit revenue growth in billboards and transit. EBIT was up by 80%. There is a strong pipeline of digital product development and expansion in retail and airport precincts planned for Q4 this year.

We have continued to successfully renew our major contracts, with a number of key renewals during the period.

In New Zealand, strong organic growth in a relatively subdued market produced revenue growth of 33%. The Oggi acquisition was completed and is tracking ahead of plan. APN Outdoor is now the clear market leader in billboards in New Zealand and its market share is now around 25% following the Oggi acquisition.

In Hong Kong, APN continues to be the leading transit advertising operator on Hong Kong Island, together with a major billboard business. As part of its market leading transit operation, APN is rolling out 300 free WiFi-enabled buses that have attracted significant advertising support.

Overall, the Australian Outdoor market is well placed to continue to outperform the general advertising market as the benefits of the new audience measurement system "MOVE" and a strong pipeline of product innovation continue to deliver successful and accountable campaigns to advertisers.

Digital

APN also today announced two digital acquisitions in Australia and New Zealand as part of the company's strategy of building APN's position and capabilities in key digital markets.

APN has entered into an agreement to acquire a controlling stake in CC Media, a leading, profitable high-growth online catalogue digital distribution business in Australia. This will provide APN with a national position in the online advertising market and important digital capabilities to use across APN's broader digital portfolio, most notably sophisticated third party traffic management via the CC Media iNC Network.

The second transaction is APN's acquisition of New Zealand's largest and most popular sports tipping platform Jimungo, from Affinity ID. Jimungo has around 300,000 registered users and runs tipping competitions across all major sports, including Rugby, League, Netball and Soccer.

It's a strong fit for nzherald.co.nz's sports content and lends itself to high audience engagement through interaction and participation in sports events.

We expect these to grow into an increasingly important contribution to APN's earnings over the next 3 years.

GrabOne (included in the New Zealand Media division result) continues to lead the group buying market in NZ with over 60% market share. Monthly sales continue to grow and APN commission exceeded A$1m in July. Commission rates continue to hold strong. The business has expanded into other verticals, with GrabOne Escapes, GrabOne Bottle and GrabOne Stores which have proved to have strong consumer appeal. We have also launched GrabOne Australia.

Sella is our free online auction and classifieds site. Recently re-launched, it has more than 500,000 products and 500,000 members. We have seen increased activity on the site during the half and we are committed to building the business.

As part of our digital strategy, APN is building a portfolio of digital transaction businesses through partnership and acquisition, focused on three digital imperatives:

·; Building audience scale and engagement in key verticals

·; Securing new online advertising and transaction businesses

·; Building our key cross portfolio digital capabilities, such as mobile and video

Dividend

The Board has declared a fully franked interim dividend of 3.5 cents per share, payable on 28 September 2011 (record date of 7 September 2011). The Dividend Reinvestment Plan remains in place with a 2.5% discount.

Outlook

We are a seasonal business and although it is difficult to predict how our advertisers will react to recent volatility on financial markets we are entering our strongest trading period for the year and our forward bookings are encouraging.

We are targeting EBIT for H2 in line with the same period last year (A$118m). Second half trading to date is yet to move ahead of the prior period. However, we remain confident that our outdoor and radio market shares will continue to grow and our H1 cost saving measures will have increasing effect throughout the balance of the year.

ENDS Thursday, 18th August 2011

For further information, please contact:

Gavin O'Reilly Chief Executive Officer +353 1 466 3200

Donal Buggy Chief Financial Officer +353 1 466 3200

Karl Brophy Director Corporate Affairs

& Content Development +353 1 466 3200

APN NEWS & MEDIA LIMITED

INTERIM PROFITS ANNOUNCEMENT

Income Statements translated at Average Rates

Average Exchange Rate 2010 €1 = A$1.4859

Average Exchange Rate 2011 €1 = A$1.3581