NZME’s Ebitda of $21.4 million was above the $21.3 million achieved in 2023. Profit after tax of $1.9 million also remained relatively stable, with the company posting a profit of $2 million in the first half of 2023.
The company said it achieved 4% growth in advertising revenue in the first quarter of the year, but this slowed to 2% in the second quarter, with the current quarter seeing 1% year-on-year growth.
Operating expenses in the first half of the year amounted to $149.6 million, an increase of 3 percent. Personnel costs remained relatively stable (plus 1 percent).
Sales and marketing expenses increased 16%. The company attributed this to higher agency commissions, with a larger share of revenue coming through the advertising agency channel, as well as higher audio marketing costs due to planned promotional activities.
The company has implemented initiatives to save $6 million in annual costs, effective in the second half of the year.
“Difficult trading conditions and declining confidence in the business world have resulted in the advertising market shrinking year on year,” said Boggs.
He said OneRoof continues to deliver “rapid” growth in audience, revenue and profit.
“We are entering the strongest quarter of the financial year and companies are signalling their investment intentions as sentiment improves. NZME remains well positioned to benefit from this growth.”
Nevertheless, the general conditions remained uncertain.
The company expects to post a profit at the “lower end” of the previously stated range of $57 million to $61 million by the end of the year.
Key Highlights
Boggs said NZME continued to be a “top performer” in the media industry.
“We continue to improve our digital performance to ensure we deliver value to our shareholders. We work hard to drive improvements and in areas such as audio we continue to outperform the market, with our total revenue share exceeding audience market share.”
The company listed several key highlights:
- An increase in operating revenue and significant growth in digital revenue to $50.1 million this half, up $5.9 million from the first half of 2023;
- OneRoof was described as an “outstanding company” that turned a profit in the first half thanks to its digital growth.
- OneRoof had closed the audience gap on TradeMe to “just 10%” and enquiries for OneRoof listings had increased by 29%;
- Digital audio revenues increased 33% year-over-year;
- NZME’s digital publishing business reported an increase in profitability over the half year, with digital subscription revenues up 13% and digital subscriptions up 11% to 30 June 2023.
The company’s half-year report also shows that digital subscriptions, including NZ Herald Subscriptions now stand at 137,000, up 7,000 from last year. Digital reader revenue rose 13% to $11.1 million in the half year.
Boggs said the company has a clear three-year strategy.
The focus was on “driving the company’s digital transformation, rapidly improving the customer experience and leveraging new technologies to increase our competitive advantage.”
“Over the next six months and beyond, the company will continue to introduce market-leading innovative products, accelerate the delivery of new customer experiences, streamline business processes and improve productivity and efficiency across the enterprise.”
Capital management
The company said distributions to shareholders in the first half of the year were 6 cents per share. “This was the final dividend for 2023 and was paid on March 20.”
Net debt was $30 million as of June 30.
“This is a seasonal increase of $18 million as of December 31, 2023, and the leverage ratio remains well within the target range of 0.5-1.0x Ebitda and consistent with the same period last year. We forecast a reduction in net debt by the end of 2024, with the leverage ratio returning to the lower end of the target range.”
The Board of NZME has declared a fully credited interim dividend of 3 cents per share, payable on 25 September.
Editor-in-Chief Shayne Currie is one of New Zealand’s most experienced journalists and media leaders. He has held senior and executive roles at NZME, including Editor-in-Chief, Editor of the NZ Herald and Editor of the Herald on Sunday, and owns a small shareholding in NZME.
