NZME CEO Michael Boggs. Photo / Michael Craig
NZ Herald publisher NZME has recorded operating earnings of $56.2 million for its financial year - 13 per cent down on the previous year and just below the guidance it advised in November.
The company’s net profit after tax was $12.2m, down from $22.7m in 2022. Operating revenue was $346.6m, down 5 per cent from 2022.
The result, while down on 2022, shows NZME to be one of the best-performing major commercial media businesses of those that report their results.
NZME chief executive Michael Boggs said despite the financial results being “heavily impacted” by challenging economic conditions, the company had performed well, “adapting to the challenges and continuing to deliver digital revenue growth”.
“Business and consumer confidence was low throughout the year, with inflationary pressures and higher interest rates contributing to a very challenging operating environment for many New Zealand businesses. Despite this, NZME fared well compared to the market, maintaining a strong audience base of 3.5 million Kiwis or 85 per cent of people aged 15+,” he said in a statement accompanying the results today.
NZME owns the NZ Herald, Newstalk ZB, property portal OneRoof, and a suite of entertainment radio stations including ZM, The Hits and Coast.
Among highlights today, the company said its publishing subscriptions had increased to 222,000, including 130,000 digital-only subscriptions.
“The publishing digital business is profitable, including when taking into account the full investment in the journalism that appears on NZME’s digital platforms, and when the stories appear in NZME’s print publications.”
OneRoof grew its digital revenue by 5 per cent year on year despite a 12 per cent reduction in new residential listings coming to market, the company said. OneRoof achieved a milestone of break-even ebitda in the second half of 2023.
Boggs said OneRoof had achieved digital revenue growth of more than 80 per cent across January and February 2024.
The company said its radio market revenue share reached 43.1 per cent, the highest since measurement began in 2016.
In August, the company said it expected full-year ebitda to come within the lower end of its previously forecast range of $59m to $64m, believing the market had shown signs of turning.
In a further statement to the NZX in November NZME downgraded its guidance, saying ebitda for the full year was likely to be between $57m and $59m.
Today’s result falls just below that after a softer-than-expected December revenue month.
Boggs said the result came amid positive signs for 2024, “with January and February advertising revenues pacing ahead of last year, business and consumer confidence on upward trends, and a recovering real estate market”.
He said sentiment among market commentators remained one of economic uncertainty and there was no clear consensus on outlook.
“We are well-positioned to deliver improved results as market conditions improve. We remain conscious of continued cost pressures across our business and will focus on efficiency improvement opportunities.
“We are pleased to have declared a final dividend for 2023 at the same level as last year, particularly against the backdrop of a difficult market.”
NZME board chairman Barbara Chapman said the company’s updated digital-led strategy to 2026 set clear, aspirational targets and was focused on “delivering superior returns across the business”.
“The strategy sets NZME up for strong delivery of revenue and profitability growth, and our balance sheet is strong when compared to local competitors, which stands us in good stead for the future.
“Globally, we know that digital-centric businesses are valued at much higher multiples than print peers, and NZME’s relentless focus on being digital-led, whilst also maximising print revenues, will continue to provide substantial earnings and value for shareholders well into the future,” she says.
NZME distributed $16.5m to shareholders over the past year - $11m in a 2022 final dividend payout of 6c per share, and $5.5m through a 2023 interim dividend of 3c per share.
Chapman said based on strong cash flows, business outlook and capital requirements, the board had declared a fully imputed final dividend of 6c per share, bringing the total dividends declared for the 2023 financial year to 9c per share.