NZ Herald owner NZME says it continues to expect profit growth this year despite continuing challenging market conditions and a slower start to trading in the first quarter of 2021.
Chief executive Michael Boggs told shareholders the global economic reality remained uncertain as the ongoing effects of Covid-19 affected market dynamics.
Aside from the Herald, NZME also owns the OneRoof property website and a suite of entertainment radio stations including Newstalk ZB, ZM, The Hits and Hauraki.
The company's business confidence monitors had been variable in recent months, Boggs said, also noting the strong property market had resulted in real estate requiring less marketing, while a number of international travel providers had only recently re-commencing advertising.
Despite that, March 2021 delivered advertising revenues on par to those achieved in 2019.
"Our focus remains on being able to deliver this performance on a consistent basis during the year," Boggs said.
"Based on continued recovery of revenue and the permanent cost reductions made during 2020, we continue to expect profit growth for 2021."
Chairman Barbara Chapman reiterated the company expected to pay dividends of 30-50 per cent of free cash flow - subject to being within its target leverage ratio and capital requirements, operating performance and financial position.
She also disclosed two matters currently before the NZ Markets Disciplinary Tribunal relating to disclosures made last June regarding the sudden resignation of former chairman Peter Cullinane and in May regarding negotiations to acquire Stuff.
Cullinane resigned suddenly before last year's annual shareholders' meeting. He later told the Herald he felt it "appropriate to step down" because he'd lost the support of Australian fund-manager shareholders. Cullinane was up for re-election as chairman.
Chapman said the board took its obligations and responsibilities around continuous disclosure extremely seriously and the disclosures did not relate to ongoing matters.
"We followed specialist external legal advice at the time the disclosures were made. We are focused on managing and resolving those matters in the best interests of the company. Details of the matters and outcomes will be released as soon as the regulatory processes are concluded. The outcome is not expected to materially impact the business financially."
Boggs took shareholders through the annual result, noting that in February the company reported annual operating earnings of $67.3 million and signalled a return to dividends in the second half of this financial year after repaying $41m of debt.
Statutory profit of $14.2m compared to a net loss of $165.2m in 2019 when it suffered impairments to intangible assets.
The operating result was a 3 per cent increase on the previous year and included $8.6m accessed from Government Covid-19 wage subsidies.
"It's pleasing to note that we saw a solid improvement in advertiser spend at the end of last year, with a tangible lift in business confidence," Boggs said today.
Boggs updated shareholders on the company's NZ Herald digital subscription model, noting further strong growth in the Premium proposition.
The publication now has more than 110,000 subscribers accessing the service, including more than 60,000 paying digital subscribers, up from 53,000 paid digital subscribers at December 2020.
"This is well on track to achieving the 2021 subscriber goals set as part of the 2023 strategy."
Shareholders also heard from Guy Horrocks, standing for election to the board for the first time since his appointment in December.
Horrocks said he looked forward to bringing his experience of digital transformation to the bear at NZME. The entrepreneur was an early pioneer of the mobile app industry co-founding the world's first commercial iPhone app company in 2007, Polar Bear Farm.
Clients included Expedia, DreamWorks, HBO, OREO, CNN, Time Magazine as well as The NZ Herald.
NZME shares remained unchanged at 80c.