Digital ads promising for NZME

Publishing company NZME says its hoped-for merger with Fairfax New Zealand remains a priority, with no respite in sight to the headwinds in the traditional advertising market.

But chief executive Michael Boggs suggested the company had turned a corner of sorts, with growth in its digital advertising compensating for a drop in print advertising for a second time.

The company, which publishes the New Zealand Herald and owns about half the country’s major commercial radio stations and daily deals site GrabOne, reported a net profit of just under $8 million for the six months to June 30.

Boggs said NZME’s interim trading profit was stable when compared with last year with trading revenues slipping 3 per cent.

Although the latter was an improvement from a 6 per cent revenue decline in 2016 over 2015 ‘‘it still obviously requires us to continue to look for efficiencies to keep the profitability stable’’, he said.

NZME posted a profit of $61m in the same period last year, but changes to the business, which was spun-off from Australia’s APN into a separate NZX-listed business in June last year, make comparisons difficult.

Total print revenues fell 4 per cent to $110m, with revenues from its radio business down 6 per cent to $53m.

Combined digital and e-commerce revenues were up 9 per cent to $26m, with a 20 per cent increase in digital revenues dragged down by a 20 per cent fall in e-commerce revenues attributable to GrabOne.

In a statement accompanying its result, the company said: ‘‘Merging with Fairfax remains a priority to further improve efficiency, and to underwrite the competitiveness of New Zealand content generation and delivery, in an increasingly fragmented market.’’

Fairfax NZ and NZME’s appeal of the Commerce Commission’s refusal to authorise their merger is due to be heard in the High Court at Wellington from October 16.