NZME’s result stable despite ‘ headwinds’

Newly- listed NZME, publisher of the New Zealand Herald, said its operating earnings improved slightly over the six months to June, despite a decline in revenue, allowing the company to pay a 3.5c interim dividend.

NZME, which listed on the NZX in June, said its earnings before interest, tax, depreciation and amortisation ( ebitda) came to $ 32.5 million, up a touch from $ 32.4m in the corresponding period last year.

The company, once part of Australian media group APN News & Media, said its first result as a standalone entit y was stable, despite revenue “headwinds”.

Revenue, which fell by 7.9 per cent to $ 197.8m in the half year, was impacted by a tough advertising market, especially in the first quarter, and the closure of the unprofitable Pacific Magazines licensed business in September last year.

The company said its transition to an integrated media and entertainment business had delivered benefits, including improved cost efficiencies.

Chief executive Michael Boggs said the first quarter of the financial year had been “tough” but that the second quarter was much improved.

“Q3 is currently tracking well for us,” Boggs said. “So I think that there will be more of the same but we certainly know that it’s an industry that faces its revenue headwinds.

“Digital is obviously a key revenuegrowing stream for us.”

Putting together the publishing, radio and GrabOne businesses contributed to a 7.7 per cent reduction in NZME’s “people” costs.

Commenting on NZME’s print business , Boggs said: “I think that we are doing better than many — so that’s an area the we continue to focus on.”

He said a key focus would be on retaining print revenues.

“I totally recognise that it’s a key component of our business and we need it to continue to be a key component of our business.”

NZME and its main rival, Fairfax NZ, plan to merge, subject to approval from the Commerce Commission. The commission last week said it had extended the date for a decision on the plan until March next year.

The company’s statutory net profit after tax in the first half came to $ 60.8 million up from $ 21.9 million, impacted by tax and the gain on the sale of an interest in the Australian Radio business.

NZME’s reported loss from ordinary activities after tax was $ 64.3 million compared to a loss of $ 6 million in the comparative period last year.

Boggs said the company had invested in new initiatives to deliver on its strategic imperatives of growing audience engagement, optimising integration opportunities, and diversifying revenue.