Prime says ad market soft in lead-up to Christmas Nick Tabakoff and Darren Davidson ask whether the November advertising recovery is a flash in the pan or a positive long-term portent. SEVEN Network regional affiliate Prime TV has forecast a decline in its core net profit this financial year due to a weaker advertising market. After a strong start to the new financial year the "wait and see" approach of big national advertisers had created a soft market in the lead-up to Christmas, Prime chief executive Ian Audsley told shareholders at its annual meeting today. Prime maintained a 40.4 per cent share of total ad revenue in its three markets of northern and southern NSW and Victoria thanks to strong political and government advertising in the weeks before the September federal election. "However, a number of major advertising categories reduced their spend during and post the election period, which has balanced out the uplift," he said. The network was currently negotiating its major advertiser deals for the new calendar year and as those discussions progressed the outlook would become clearer. Assuming the current trading conditions continued he predicted core net profit after tax (NPAT) for the 2014 financial year would be lower than last year, in the range of $31 million-$33m. "Thought it has not been our practice to provide earnings guidance, we are conscious that the renewal of the Seven affiliation agreement, the sale of our radio business, the distortion of the federal election and the soft and unpredictable advertising market, all during this financial year, will have an effect on our financial performance," Mr Audsley said. Last financial year the regional network posted a more than 6 per cent increase in core NPAT to $35.4m. Its statutory NPAT was 27 per cent lower at $20.2m due to the effect of selling its Prime Radio Group to Grant Broadcasters. Last month the network announced it had agreed with affiliate partner the Seven Network to extend its programming deal for another six years to June 2019. "Although we are paying more for our programming by entering into the new arrangement with Seven, we believe we have negotiated a very good deal which has given our company longer term certainty," chairman Paul Ramsay told the meeting. Addressing speculation that Seven would seek to acquire Prime at some point in the future, Mr Ramsay said the federal government's 75 per cent audience reach rule still prevented such a deal. "Though we support the removal of the rule, so as to benefit all shareholders, we have received no word from the government in regard to its present view of the 75 per cent audience reach rule," he said. However, we expect it will be reviewed by the new minister for communications, Malcolm Turnbull, as part of his broader analysis of regulation of the media and telecommunications sectors. Reviewing the past financial year, Mr Ramsay highlighted Prime's achievement in growing its ad share in a market which declined by one per cent year-on-year, or $5m, in its markets. Its share of national revenue in the year was 44.3 per cent, up 1.9 percentage points on the previous year. Despite the draw of the London Olympics on the rival Nine-affiliated network, it had also increased its audience share during the year.