Otago Daily Times

Af­ter bounc­ing back, NZME lifts guid­ance, re­funds staff

- Business · Finance · Investing · Greater Auckland · New Zealand · New Zealand Exchange · Mercer Airport

AUCK­LAND: NZME has lifted its earn­ings guid­ance and says it in­tends to re­in­state div­i­dends next year fol­low­ing a bet­ter than ex­pected rev­enue re­cov­ery from the Covid­19 cri­sis.

It is also re­fund­ing the bal­ance of staff salary sac­ri­fices that were taken up on a vol­un­tary ba­sis at the height of the cri­sis in April.

The me­dia com­pany said it now ex­pected op­er­at­ing earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (ebitda) of $63 mil­lion to $66 mil­lion for the year to De­cem­ber 31, above the pre­vi­ous guid­ance of $60 mil­lion to $63 mil­lion, and more than dou­ble last year’s $30.2 mil­lion.

NZME, which owns The New Zealand Herald, New­stalk ZB, the OneRoof prop­erty web­site and a suite of en­ter­tain­ment ra­dio sta­tions, also con­firmed a revised cap­i­tal man­age­ment plan and div­i­dend pol­icy.

The com­pany in­tended to pay div­i­dends of 30%­50% of free cash­flow sub­ject to be­ing within its tar­get lever­age ra­tio range of 0.5 to 1 times rolling 12­month trad­ing ebitda.

That would be sub­ject to cap­i­tal re­quire­ments, op­er­at­ing per­for­mance and fi­nan­cial po­si­tion and would not hap­pen un­til af­ter June 2021.

The com­pany said any re­turn to div­i­dend pay­ments re­mained sub­ject to its cap­i­tal man­age­ment plan and could change at any time at the board’s dis­cre­tion.

NZME’s net debt at Septem­ber 30 was $50.9 mil­lion, down from $55.2 mil­lion at June 30. It ex­pected net debt of less than $45 mil­lion at De­cem­ber 31.

The im­proved forecast was on the back of a bet­ter than an­tic­i­pated rev­enue re­cov­ery, NZME said in a state­ment to the NZX.

Ad­ver­tis­ing rev­enues for the fourth quar­ter of 2020 were still ex­pected to be down 7% year­onyear. — The New Zealand Herald

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