APN News & Media, the Australian media group that is subject to a €2.3 billion takeover offer from Independent News & Media, reported a 7 per cent increase in net profit last year after a strong performance in outdoor advertising helped offset difficulties in the publishing sector.

Net profit was 159.5 million Australian dollars (€95.3 million) last year, compared with A$149 million in 2005.

Turnover slipped 2.7 per cent to A$1.2 billion.

APN publishes 23 daily newspapers and more than 100 non-daily newspapers across Australia and New Zealand, as well as running an outdoor advertising business.

APN chief executive Brendan Hopkins said 2006 had been a challenging year, particularly in the middle two quarters.

"Queensland recorded good growth while the markets of Auckland, Sydney and Melbourne were flat to negative," he said. "Despite this, we have recorded a satisfactory trading result."

Mr Hopkins said the company was particularly pleased with the performance of its Australian publishing business and the positive impact of the termination of several uneconomic contracts in its outdoor business.

Ebit (earnings before interest and taxation) in the publishing division was flat, as a 6 per cent increase in regional publishing offset a 7 per cent decline in the New Zealand market.

Ebit from outdoor advertising jumped 41 per cent, while radio was up 1 per cent. Overall, Ebit increased 1 per cent, to A$313.5 million.

APN's board last week gave its support to Independent News & Media's offer to buy out the remaining 58 per cent of APN it does not already own.

This time round - the first offer collapsed - the Irish group has teamed up with US-based buyout groups Providence Equity Partners and Carlyle.

The consortium is offering A$6.10 a share.