Stuff reports net profit at $5.5m as doubts linger over NZME merger revival

Monday, 2 December 2019

Media company Stuff Ltd has posted a profit of $5.5 million for the year to the end of June, in accounts filed with the Companies Office.

Revenues fell 12 per cent to $269m.

The previous year, Stuff had reported a loss of $74m due to write-downs.

Stuff owns Stuff, The Dominion Post, The Press and The Sunday Star-Times.

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NZME has lobbied the Government in an apparent bid to clear the blockage preventing a merger with Stuff, but might need success on more than one front to stack up a transaction.

* Government very lukewarm on proposal to intervene in NZME/Stuff buyout

* NZME interim profit falls 73pc to $950,000

* Stuff revenue down 10pc and operating profit falls in 'challenging market'**

Stuff's Australian owner Nine had reported in August that Stuff's operating profit for the year to June fell 24 per cent to A$28m (NZ$30m), but its release did not include a net profit figure for the New Zealand business.

Stuff chief executive Sinead Boucher said the company had been reasonably pleased.

It would not be appropriate to provide guidance on the current year, she said.

'Like all media companies we have got our heads down focussing on our businesses.'

In August, Stuff's closest domestic rival, NZX-listed NZME, publisher of the New Zealand Herald, reported a 73 per cent drop in its interim profit for the six months to the end of June to $950,000, with its interim revenues falling 4 per cent to $181m.

NZME said last month that it was in discussions with Nine, and had put a proposal to the Government regarding a possible transaction.

It is understood NZME hopes to persuade the Government to clear the regulatory path for a takeover of Stuff, after that was blocked by the Commerce Commission in 2017.

However, there has been speculation that ministers' appetite for intervention is lukewarm.

NZME declined to comment last week on how it might fund an acquisition.

NZME reduced its net debt by $8m to $90m at the end of June after suspending dividends to shareholders, but its debt gearing remained unchanged because of an equivalent reduction in its operating profit.

Broadcasting Minister Kris Faafoi plans to make an announcement about media policy in the next few weeks, amid indications his goals may have largely retrenched to finding ways to better secure the future of public broadcasters.