NZME investor day: Herald digital subscriptions surge to new high

NZME has updated investors on the performance of the business. Photo / NZME

The New Zealand Herald's premium subscriber numbers have surged to a new high as listed owner NZME outlines its plans for the next two years.

Figures revealed at NZME's investor day show the news publication now has 135,500 digital and print-enabled subscribers while digital-only subscribers now total 78,500.

This is up significantly from the numbers released at the half-year results announcement in August, which then showed 120,000 digital subscribers, including 67,000 digital-only subscribers and 53,000 print subscribers who have activated digital access.

The media company also revealed record audiences, with the Herald maintaining its number one news website position at 2.24 million unique visitors a month and Newstalk ZB the number one radio network with a 672,000 cumulative audience.

During a presentation to investors today, executives across NZME reiterated the company's plan to transform the organisation into a digitally focused media business.

The company is rolling out this strategy across three core segments: audio, publishing and real estate platform OneRoof.

Chief executive Michael Boggs said that despite challenging trading conditions due to Covid-19, NZME still expects to deliver ebitda in the range of $63 million to $67m for the full year in line with earlier guidance.

The earnings update noted that advertising revenue for the first half of 2021 was 3.2 per cent lower than the first half of 2019. However, for the month of June, revenue was higher than June 2019.

The third quarter was tracking well until New Zealand was moved into level 4 lockdown on August 17, resulting in the three-month period being lower than 2019, but 7 per cent higher than 2020.

Advertising revenues so far in the fourth quarter have been less impacted by the lockdowns and are expected to be on par with last year's numbers.

Digital transformation

Digital revenue is playing an increasingly significant role in the company's earnings, the presentation noted.

Digital subscriber revenue is forecast to hit $12m for the 2021 financial year, while digital publishing advertising revenue is expected to reach $55m - the first time it will exceed $50m. Print advertising on the publishing side is expected to reach $64m.

NZME is also charting growth for OneRoof, with this arm of the company expected to earn more than $7m just from digital for the 2021 financial year. OneRoof is also anticipated to earn $13m from print advertising.

The radio arm of the business is expected to reach revenue of $104m, with $101m coming from radio ads and a further $3m from digital.

Boggs further said the company is currently in talks with Google and Facebook in regard to them accessing and supporting NZME editorial content.

While the tech giants have signed hefty content deals with Australian publishers, they have not yet penned any in the local market.

NZME has also maintained costs reductions implemented in 2020 for the 2021 financial year, allowing for the company to save a further $20m over the 2021 financial year.

NZME's performance over the past three years has enabled the company to fully repay its $100m debt.

The sale of daily deal site GrabOne for $17.5m earlier this year saw the company reach a net cash position by the end of October.

The board announced earlier this week it intends to undertake an on-market share buy-back of up to $30m from early 2022. The company had been in a position to announce the buyback at the half year, but decided to pause due to Covid lockdowns.