Canwest Mediaworks Delivers 55% Ebitda Improvement

Monday, 18 October 2004

Canwest Mediaworks Delivers 55% Ebitda Improvement

CanWest MediaWorks (NZ) Limited exceeded its pro forma prospectus forecast with a pro forma $60.9 million EBITDA (earnings before interest, income taxation, depreciation and amortisation) result for the 12 months ended 31 August 2004, on pro forma revenues of $228.7 million *

This figure is a 55% improvement to the bottom line on last year’s aggregate pro forma EBITDA of $39.1 million.

The highlights of MediaWorks’ Fiscal 2004 pro forma 12-month results are:

Group Revenue $228.7 million up 8% on pcp
RadioWorks Revenue $101.6 million up 10% on pcp
TVWorks Revenue $127.1 million up 6% on pcp

Group EBITDA $60.9 million up 55% on pcp
RadioWorks EBITDA $32.4 million up 25% on pcp
TVWorks EBITDA $29.2 million Up 120% on pcp
Corporate Costs $(0.7) million

“Naturally, we are delighted to have come in above target to deliver our shareholders a strong financial result, which signals good momentum for the Company in the year ahead,” said MediaWorks’ Chair of the Board, Tom Strike.

“It is pleasing to see the strong New Zealand economy benefiting both the radio and television sides of our business, with both media enjoying an excellent year in terms of improved revenue and EBITDA performance,” said Mr Strike.

RadioWorks

Solid, consistent growth continues to be the theme of RadioWorks’ performance in the market.

Revenue is up 10% for the 12 months to 31 August 2004 to $101.6 million, increasing from $92.3 million in the previous year.

The EBITDA for RadioWorks delivers a 25% improvement for the year to $32.4 million, up from $25.9 million in the previous year.

“RadioWorks’ performance is rock solid and is a reflection of the strength of the brands, and their careful market positioning,” said CanWest MediaWorks CEO, Brent Impey.

“More FM, Solid Gold, The Edge, Radio Pacific, The Rock, Channel Z and The Breeze, along with 17 local stations are powerful brands, and together account for approximately half of the radio audience share and half of the radio advertising revenue in New Zealand,” said Mr Impey.
“Credit goes to the strength of leadership in RadioWorks. COO Sussan Turner and her senior management team continue to drive RadioWorks hard and the continued strengthening of radio’s performance is a credit to all the staff in the business,” said Mr Impey.

“Looking ahead, utilising the new Auckland FM frequency that we recently purchased is a strong growth opportunity for us, and we are very close to announcing our plans for that frequency, which will be a significant strategic move for the business,” he continued.

TVWorks

TVWorks has had an outstanding 12 months to 31 August 2004 with an EBITDA improvement of 120%, lifting that figure to $29.2 million, up from $13.2 million in the previous 12 months. Revenue for TVWorks has lifted 6% to $127.1 million for the year, up from $119.9 million in the previous 12 months.

“The spectacular turnaround achieved by changing TV4 to C4 has been a key part of the success story for TVWorks,” said Mr Impey. “From a $7.1 million EBITDA loss in the previous year, to a modest $519,000 EBITDA this past year, the turnaround is not only ahead of plan, but instils confidence in the growth potential of C4 in the year ahead.”

“The success story of C4 is a reflection of the endorsement of the brand, both from the audience and advertising markets who have both responded positively to a dedicated, free–to-air music television channel aimed at 15-29 year olds,” he continued.

TV3’s EBITDA has improved 45% in the course of the year up to $28.7 million, from $20.4 million in the previous year. A number of factors are behind TV3’s improvement.

“2004 new season ratings reveal total audiences for TV3 in our target 18-49 year old demographic are up between March and August 2004, compared with the same period in 2003. This audience strength is a significant factor in driving financial performance. New Zealand’s most popular crime drama, CSI: Crime Scene Investigation, and its spin-off CSI:Miami have been massive hits for the network, and we are fortunate to have secured the rights to CSI: New York coming to TV3 in 2005,” said Mr Impey. “Smash hit Australian comedy Kath & Kim, previously screening on a competitor, will also be coming to TV3 in 2005.”

“3 News continues to be a leading programme for the network, and its strategic importance to the network is clear.”

“As well as programming strengths, the sales team at TVWorks continues to improve results by focussing on excellent customer service, innovative advertising techniques and improving yields, aided by the implementation of new computer software”, he said.

“Most importantly, we have a driven management team and staff, led by TVWorks’ COO Rick Friesen, who are determined to see TV3 become the number one network amongst 18-49 year olds.”

Outlook

Both operations are continuing to trade well in the first quarter of the Fiscal 2005 year.

ENDS

This news release contains comments or forward-looking statements that are based largely upon the Company's current expectations and are subject to certain risks, trends and uncertainties. These factors could cause actual future performance to vary materially from current expectations. The Company may not update or revise any forward-looking statements or comments, whether as a result of new information, future events or otherwise.

CanWest MediaWorks is listed on the NZSX (trading symbol: MWL) and is the parent company of TVWorks and RadioWorks. TVWorks operates two free-to-air television channels; TV3 and C4 in New Zealand. RadioWorks operates six national radio brands: The Edge, More FM, The Rock, Solid Gold, Channel Z and Radio Pacific as well as The Breeze and 17 local radio stations throughout New Zealand.

ENDS

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