PBL Media will not trade in car site

HEAVILY indebted television and magazine group PBL Media has signalled it plans to hold on to assets including Ticketek and a half-stake in Carsales.com.au, even as the motor classifieds site is preparing for a sharemarket listing.

By InvestSMART · 28 Jul 2009

By InvestSMART ·
28 Jul 2009

PBL Media chief executive Ian Law yesterday dismissed speculation that the private equity-held owner of Channel Nine and ACP Magazines was looking to offload businesses to reduce its $4 billion in borrowings. He insisted the group had enough headroom to trade through the advertising downturn after a $335 million capital injection earlier this year.

"On the basis of the business plan we have before us, which includes earnings contributions from Carsales and Ticketek, we do not envisage any issues with our (debt) covenants," Mr Law said. On a Carsales float, he said: "At this stage we would not be selling into the offering and we would be retaining our interest in what is a great asset."

PBL Media has been owned by CVC Asia Pacific since the recapitalisation, which effectively cut its long-standing ties to James Packer's Consolidated Media Holdings.

Carsales, which controls close to 60 per cent of the online motor advertising market, confirmed yesterday it still intended to list, having made a commitment to minority stakeholders that they would get a capital return through a public offering. The plan has been put on ice during the market meltdown, but a board announcement is now expected within weeks.

The site is 49.5 per cent owned by PBL Media. Carsales chairman Wal Pisciotta owns 16.1 per cent, chief executive Greg Roebuck has 4.5 per cent and the rest is held by car dealers and others.

Carsales told shareholders yesterday it would give a "substantive update" about its "ASX listing intentions as soon as possible". Asked about potential interest from rivals such as Fairfax Media, owner of The Age, and News Ltd, Mr Roebuck said there were not "any transactions on the horizon".

The website yesterday reported a 64 per cent jump in net profit to $30.7 million for the year to June as the shift of spending to the internet continued and higher volumes of used-car sales helped push revenue up 33 per cent. It will pay a final dividend of 7.8?, with PBL Media to reap about $8.9 million.

Based on its $43.7 million operating profit and current internet stock trading multiples, sources said Carsales could be valued at $800 million to $900 million in a listing. It is unclear how much would eventually be sold on the sharemarket.