NZME interim profit falls 73pc to $950,000

Tuesday, 27 August 2019

NZME has described its interim result as 'solid'.

The NZX says its regulation team has noted the timing of a report in the New Zealand Herald, which reported on the interim result of owner NZME prior to the publication of a market release by the NZX on Tuesday morning.

'NZX Regulation has noted the timing of media reporting on NZME Limited's half year financial results, relative to the release of those results this morning through the exchange's market announcement platform.

'NZX Regulation is not in a position to comment further at this time,' spokesman Hamish Macdonald said.

The NZ Herald's report on NZME's financials was date-stamped 6.45am, while the market release was published by the NZX at 8.42am.

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NZME chief executive Michael Boggs says the company has seen sights of improvement in the advertising market since the end of June but remains cautious of the potential impact of the softening economy and weaker business confidence.

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NZME has been approached for comment.

NZME reported a 73 per cent drop in its net profit to $950,000 for the six months to the end of June, with revenues falling 4 per cent to $181m.

The company's operating profit fell 16 per cent to $19m.

NZME said the number of paying subscribers for its online paywall had reached 15,000, which it said exceeded expectations.

The rate of growth in paying subscribers decelerated markedly, with NZME passing the 10,000 mark in June, six weeks after the paywall was introduced, and the 15,000 mark eight weeks later.

The company saw potential to increase paying online subscribers during the Rugby World Cup.

Print revenues declined 7 per cent to $97m while revenues from the remainder of the business fell 1.5 per cent to $85m.

NZME's shares were trading 10 per cent down at 47c in lunchtime trading, valuing the company at $92m.

Chief executive Michael Boggs described its interim result as solid and said the digital subscription service had been a success.

'For the first time in several years radio revenue is in growth. Even more pleasing is that this part of our business is showing continued momentum going into the second half of the year.'

NZME had seen an encouraging start to the second-half, with the advertising market showing 'some signs of improvement' and bookings up 6 per cent, he said.

'However, we do remain cautious of the potential impact of the softening economy and weaker business confidence,' he added.

NZME suspended its dividends in 2018 to focus on paying down its debt, which fell by $8m to $90m at the end of June.

However, the company noted that due to its fall in operating profit, its leveraging remained unchanged.

'The board have elected not to pay a dividend for the half year ended June 30 and will continue to focus on the reduction in net debt and leverage ratio with the aim to return to paying dividends when trading and investment conditions permit,' the company said.

Australian media company Nine last week reported a 24 per cent fall in Stuff's operating profit to A$28 million (NZ$30m) for the year to June and a 10 per cent fall in its annual revenues to A$243m.

Stuff remains classed on Nine's books as an asset 'held for sale', but Nine chief executive Hugh Marks has indicated it is now in no rush to exit the business and its focus has instead shifted to working out how to better run the business for the longer-term.