After bouncing back, NZME lifts guidance, refunds staff

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