NZME reports stable earnings, profit up slightly

NZME chief executive Michael Boggs says the company wants to focus on growing its audience further this year. Photo/Greg Bowker.

NZME's priority this year will be continuing to grow its audience reach, chief executive Michael Boggs says.

The media company, which owns the New Zealand Herald, Newstalk ZB and a suite of entertainment radio brands including ZM and The Hits, made a pro forma net profit after tax of $27.8 million for the year to December 31, up 1 per cent on the prior year.

The pro forma profit reflects the company's new structure post its demerger from APN and excludes tax and the sale of its interests in Australian radio assets.

The share price rose 6c to hit 70c in the wake of the result - a 9 per cent jump which has pushed the value of the company over $137 million.

NZME's trading ebitda, earnings before interest, tax, depreciation and amortisation, was stable at $71.9 million up slightly from the $71.8 million made in the prior year while revenue fell 6 per cent to $407.4 million.

NZME chief executive Michael Boggs said being able to report a stable result was a real positive for the company in what was a tough environment for the media.

"Our ebitda was stable, in fact we were up $100,000 on a normalised basis over the last year.

"If we think how tough the media industry is and advertising, overall I think everyone in the business should be really proud."

He said the continued focus on improving performance, investment in people and talent, and delivering on improvement initiatives, had enabled the company to out-perform the market in print and digital advertising revenue growth.

"We continue to transform NZME to lift performance, grow audience and optimise our products."

The company grew its audience reach by 5 per cent in 2016 across its news, sport and entertainment brands to 3.2 million.

Its digital audience grew 19 per cent.

Boggs said the company had maintained circulation and had grown readership with strategies such as the relaunch of the Herald on Sunday lifestyle magazine, to focus on Travel.

The company lifted its native video stream by 65 per cent over the year which had been helped by NZ Herald Focus, its video content service.

"This has contributed to really pleasing digital revenue growth of 24 per cent in FY 2016, largely driven by mobile and video growth across nzherald.co.nz, supported by exciting new platforms such at watchme.co.nz."

Boggs said the merger proposal between NZME and Fairfax remained subject to regulatory and shareholder approval.

A final decision by the Commerce Commission is expected on March 15.

If the merger is approved, a shareholder meeting will be held in early June to vote on the merger with a view to completing it by June 30.

If it is declined the company said the parties would consider their next steps.

Boggs said its focus for this year would be on improving shareholder value through further growing audience reach, retaining revenue in print and making sure radio returns to growth.

"Our focus is very similar to what we have done over the last year. Firstly continuing to grow our audience reach - so that just means we have got to be producing great content everyday."

The business would also focus on maintaining its print revenues and getting its radio revenue back into growth.

"We want to grow new revenue streams across the company while managing our costs and capital really well."

NZME will pay a final dividend of 6c per share.

NZME full year result ending December 31 2016
Pro-forma net profit after tax $27.8 million up 1 per cent
Trading ebitda $71.9 million 0 per cent
Revenue $407.4m down 6 per cent
Final dividend 6 cents per share