Financial Results
Publishing and Broadcasting Limited (PBL) today announced an operating profit after tax of $173.9 million for the twelve months ended 30th June 1999. The result includes a net abnormal profit after tax of $3.7 million. Operating profit after tax and abnormal items was $135.4 million for the corresponding period last year, after excluding the $341.0 million write up of television licences recorded in that period.

A breakdown of the Group's divisional performance is provided in the table below. As anticipated, a number of one-off factors have contributed to the Earnings Before Interest and Tax (EBIT) being down 7.8% on the previous year.

TELEVISION MAGAZINES

12 mth
99/98 12 mth
97/98 % chg on
prev year 12 mth
98/99 12 mth
97/98 % chg on
prev year

Revenue 711.2 680.2 4.6 509.9 475.8 7.2

Expenditure 502.8 473.2 (6.3) 411.1 358.6 (14.6)

EBIT (Before abnormals) 208.4 207.0 0.7 98.8 117.2 (15.7)

ENTERPRISES GROUP *

12 mth
99/98 12 mth
97/98 % chg on
prev year 12 mth
99/98 12 mth
97/98 % chg on
prev year

Revenue 5.2 17.0 (69.4) 1226.3 1173.0 4.5

Expenditure 4.5 7.4 39.2 918.4 839.2 (9.4)

EBIT (Before abnormals) 0.7 9.6 (92.7) (307.9) 333.8 (7.8)
* Crown Ltd result will be included from 1 July 1999

The major factors which have impacted the fiscal 1999 EBIT compared with the prior year are:

Television : net loss on televising the Commonwealth Games $(10.0)M
: soft advertising revenue in the last quarter of fiscal 1999

Magazines : F/X related increase in paper price $(11.1)M

Enterprises : loss of dividend income from sale of Fairfax shares and Sky Channel investment $(7.9)M

The Group's after tax profit was also impacted by the equity accounted loss of $5.2 million from PBL's interest in Foxtel which has been included for the first time and by an increase in interest costs of approximately $6.9 million resulting from the capital return that PBL made to its shareholders in December 1997.

Included at Attachment A is a proforma Group Profit & Loss statement.

Television
The Nine Network delivered another strong ratings performance. The three owned stations continued to perform well, particularly Sydney and Melbourne which turned in exceptional performances. In these markets Nine won 40 and 39 weeks respectively of the 40 official ratings weeks in the fiscal year and Brisbane comfortably won the year. In addition the Nine Network ratings in these markets for the calendar year 1999 have improved by 1.8% over the corresponding period last year.

Gross advertising revenue for our major television stations (TCN-9, GTV-9 and QTQ-9) increased 4.8% compared with the previous year and represents an estimated market share of 41.8% for fiscal 1999 (41.0% for fiscal 1998).

While Television expenditure shows an increase of 6.3% over the previous year a major one-off cost was incurred in coverage of the Commonwealth Games. After excluding this cost the increase of less than 2% is in line with inflation. A major restructure of the Television division was completed during the last quarter of fiscal 1999 which will deliver a substantial reduction in operating costs of approximately $20 million per annum in fiscal 2000.

Magazines
Fiscal 1999 has been another tough year for our Magazine division. Revenue is up 7.2% on the corresponding period, reflecting solid growth in advertising revenue and the impact of a number of new magazine launches offset by pressure on copy sales of major titles in Australia and New Zealand.

Costs increased 14.6% as a result of the additional costs associated with the new magazines launched during the period and the increased cost of paper ($11.1 million), which was primarily due to the fall in the $US/$A conversion rate from a hedged 72 cents last year to 63 cents in fiscal 1999. After excluding these costs the increase was approximately 2%.

Enterprises

Foxtel
In November 1998, PBL acquired a 25% interest in Foxtel for $157 million.

An equity accounted loss of $5.2 million after tax has been recorded in fiscal 1999.

In March 1999 Foxtel launched its satellite service and with strong growth in both its cable and satellite businesses now has over 500,000 subscribers.

PBL also has an option to acquire from The News Corporation Limited a 50 percent interest in Fox Sports, Australia's leading pay television sport channel provider. This option is exercisable in the period up to October 1999.

ecorp
In June 1999 PBL successfully floated 20% of ecorp (formerly PBL Online) with a net cash inflow of approx $150 million into ecorp which will be utilised to continue to grow the business.

ninemsn (ecorp's joint venture with Microsoft) is a leading Australian player in consumer Internet services whose strategic focus is to establish itself as Australia's premier Internet Portal and consumer ecommerce site. Its performance as measured by consumer use ("unique users" and "reach") continues to exceed our expectations.

ecorp is also developing other Internet businesses which will ensure that it has a broad and diverse range of Internet offerings for Australian consumers, including a joint venture with eBay Inc to operate Australian & New Zealand versions of eBay's person-to-person Internet trading site. These joint ventures, in conjunction with the recently acquired Ticketek, a premier computerised network ticketing business in Australia and New Zealand which ecorp plans to aggressively move online; and Online Broker, which ecorp aims to develop into a leading online financial services provider, will provide ecorp with a strong business structure from which to implement its e-commerce strategy.

As foreshadowed in the ecorp prospectus, PBL has acquired since June 1999 the 43.3 million shares in ecorp from CPH at no profit to CPH ($1.20 per share).

This involved PBL purchasing from CPH all of the shares in CPHM for $95m. The major assets of CPHM are the 43.3 million ecorp shares and the land and premises of 54-58 Park Street, Sydney (valued by a third party, independent valuer at $37.5 million). PBL's magazine division, ACP, is the primary occupant of the Park Street premises. This transaction is earnings per share positive to PBL.

One.Tel
In April 1999 PBL acquired a fully diluted 19.8% stake in One.Tel an Australian and overseas provider of telephony and internet services. With a structured deal involving an initial cash outlay ($162.25 million), an advertising spend agreement ($75 million over five years) and an option over 140 million shares ($140 million) the market value of PBL's current holding is well in excess of its acquisition cost. One.Tel's business is growing strongly with subscribers at 30 June 1999 exceeding 640,000, in Australia and overseas, and the Company recently confirming plans to rollout stage one (Sydney and Brisbane) of its 'feature rich' 1800MHZ GSM network.

Net Debt / Cash Flow
During fiscal 1999 the PBL group generated $216 million of cash flow from operations. Despite the strong cash generated by its core businesses net debt increased to $1,564 million at 30 June 1999, from $1,020 million at 30 June 1998, impacted by the following major activities during fiscal 1999:

Inclusion of debt associated with the Crown acquisition which has been consolidated effective 30 June 1999

Investment in Foxtel

Sale of C&W Optus and TAB shares

Share placement in April 1999

Investment in One.Tel

Whilst debt levels have increased the Group's interest coverage and leverage ratios have generally not changed significantly.

The PBL Group has recently been rated A-/Baa1 by S&P and Moody's respectively and over the next twelve months intends to diversify its sources of funding, particularly into the capital markets. PBL may also purchase Crown Unsecured Notes on market.

Abnormal Items
The Group recorded a net, after tax, abnormal gain of $3.7 million with profits on the sale of C&W Optus and TAB offset by restructuring costs in both the television and magazine divisions, a general provision for reduction in the value of the Group's investments, and costs associated with program rationalisation in the television division.

Gross Taxation Net

Profit on sale of investments 180.5 (42.8) 137.7

Provision for diminution of investments (90.2) - (90.2)

Restructure and closure costs (26.9) 9.6 (17.3)

Program rationalisation costs (36.3) 13.1 (23.2)

Prior period adjustment - (3.3) (3.3)

$27.1 $(23.4) $3.7

Dividend
The directors announced a dividend on ordinary shares of 9 cents per share payable 15th November 1999, to shareholders registered on the books close at 5.00pm on 29th October 1999.

Outlook
In commenting on the future, Mr Nick Falloon, PBL's CEO said:

"Fiscal 2000 should provide a significant lift in earnings and improved operating cash flows for the PBL Group.

Since year end the Television advertising market has shown some improvement from the very soft conditions experienced in the last quarter of fiscal 1999. In addition, the division has recently reduced its cost base by $20 million per annum and continues to seek operating efficiencies but always with the view to producing high quality programming which should maintain the Network's clear leadership position in both ratings and in advertising market share. To this end the Network recently outsourced its outside broadcast fleet to TMS which will ensure more efficient utilisation of high cost digital broadcast equipment. The Nine Network has recently re-signed Warner Brothers to an attractive long term output deal which together with its long term major sporting contracts secures quality programming, at acceptable pricing, well into the future.

Advertising revenue remains strong in the Magazine division and with the circulation of major titles stabilising and improvement from a number of the new titles launched over the past two years revenue growth should be evident in fiscal 2000. In addition it is anticipated that costs associated with new launches will be substantially lower in fiscal 2000 which, together with lower paper prices and the positive impact of operating efficiencies identified and implemented, should deliver an improvement in operating margins in fiscal 2000 from the Magazine division.

In fiscal 2000 the Crown casino division (to be consolidated into PBL's result from 1 July 1999) will focus on its domestic gaming and related activities, on improving its operating efficiencies and on targeted marketing, particularly utilising the Crown Club. The impact of these initiatives should significantly improve Crown's EBITDA above the $182M achieved (but not consolidated into PBL's result) in fiscal 1999.

PBL expects solid growth from its developing ecorp business and its partly owned investments; Foxtel and One.Tel.

Cash flow from operations should also improve in fiscal 2000 with the continued strong performance from the Group's media assets enhanced by the inclusion of Crown's strong cash flow, assisted by lower funding costs on the "Crown debt". Cash demands from PBL's developing businesses are expected to be modest, although acquisition opportunities are constantly being evaluated."

For any further enquiries or comments please contact Nick Falloon on (02) 9282 8012 or Geoff Kleemann on (02) 9965 2465

For any further enquiries or comments please contact
Nick Falloon, on (02) 9282-8012, or Geoff Kleemann on
(02) 9965-2465.

PBL Group Result (12 months June 1999)

Fiscal '99
$M Fiscal '98
$M % Movement

OPERATING REVENUE 1226.3 1173.0 4.5%

EARNINGS BEFORE INTEREST, TAX AND DEPRECIATION 329.1 352.1 (6.5%)

Depreciation & Amortisation 21.2 18.3

EARNINGS BEFORE INTEREST AND TAX 307.9 333.8 (7.8%)

Net Interest (47.1) (56.1)

PROFIT BEFORE TAX 260.8 277.8 (6.1%)

Taxation 83.8 84.3

PROFIT AFTER TAX 177.0 193.5 (8.5%)

Equity Accounted Loss (5.2) -

Minority Interests (1.6) (2.9)

NET PROFIT AFTER TAX 170.2 190.6 (10.7%)

Abnormal Profits (after tax) 3.7 *285.8

NET PROFIT
*includes $341 million write up of television licences 173.9 476.4 (63.5%)

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