NZME has healthy balance sheet and cash flow, says CEO

NZME has a healthy balance sheet and cash flow to support its growth plans, the company's chief executive Michael Boggs told shareholders at its inaugural annual meeting today.

The company had brought together leading New Zealand print, radio and e-commerce arms to create a "unique media business" that reached more than 3.2 million kiwis, he said.

"We have integrated and transformed these businesses to create an organisation that has a sharp focus on news, sport and entertainment, delivering exceptional content to our audience and broad reach to our advertisers. We are really very proud to be one of New Zealand's leading media companies, with local management, that understands the New Zealand business and our Kiwi audience," Boggs told the shareholder meeting at NZME central in Auckland.

"The integration has established a much more agile business and delivered significant efficiency benefits. We absolutely will continue to work on these," he said.

Boggs said that the company made very good progress on its operational priorities in 2016 - including growing its audiences by 5 per cent, slowing the decline of print revenue, returning radio agency revenue to growth, driving digital revenue growth and achieving major cost savings.

"Our continued focus on growing audience reach is at the heart of how NZME creates value for shareholders," he said.

Boggs highlighted latest Nielsen results showing that the New Zealand Herald, which NZME publishes, enjoyed strong year-on-year readership growth, up 14,000 print readers to 425,000.

The Herald on Sunday, according to the results, remains the most-read and highest selling Sunday newspaper in the country.

Boggs also mentioned that NZME's radio brands - which include Newstalk ZB, The Hits and ZM - gained a "very encouraging" 1.9 per cent market share from Mediaworks in the latest radio survey.

He explained to shareholders that the company was appealing the Commerce Commission's refusal to allow the proposed merger with Fairfax NZ because the media companies believed the regulator was wrong in "fact and law".

"We believe the transaction would be positive for New Zealand, our employees and our shareholders by enhancing the competitiveness of locally-produced content for our news, sport and entertainment markets. In terms of cost, NZME is sharing the costs of the appeal with Fairfax. When weighed up against the potential benefits of the transaction, which have been estimated to be between $36.8 million a year and $55.7 million a year, we certainly believe the appeal is in the best interests of NZME and its shareholders," Boggs said.

The appeal is being heard in the High Court in October and is expected to take 10 days.
Ahead of the merger appeal, Boggs said it was "business as usual for NZME".

The company wanted to grow new revenue streams - including with ventures like Ratebroker and Restaurant Hub - while also managing costs and capital.

"Our healthy balance sheet and cash flow are supportive of our growth plans, as well as continuing to provide attractive returns to shareholders," he said.

"With our unique multi-channel, integrated media offering, combined with some of New Zealand's leading brands and talent, we have exciting opportunities ahead of us."

Shareholders passed resolutions allowing the board to set the remuneration of auditors PwC and re-elected independent director Peter Cullinane, who chaired the meeting in the absence of Sir John Anderson.

"Our company is in very good shape to meet the challenges ahead. With exceptional content and distribution capability, we are uniquely positioned to take advantage of many opportunities for realising the shareholder value we see in this exciting and dynamic industry," Cullinane said.

NZME shares are up 2.44 per cent today at 84c.