Media firm NZME’s profits almost halve

Wednesday, 21 February 2024

Media company NZME has reported a 46% drop in its annual profit, which fell to just over $12 million in the year to the end of December.

Its revenues declined 5% to just under $348m.

Chief executive Michael Boggs said the performance of the company, which owns The New Zealand Herald and about half of the country’s commercial radio stations, had been heavily impacted by challenging operating conditions.

“Business and consumer confidence was low throughout the year, with inflationary pressures and higher interest rates contributing to a very challenging operating environment for many New Zealand businesses.”

In that context, the company had performed well , he said.

More than $100m of the company’s revenues, or 29% of its business, now came from its digital products, he said.

There were “positive signs for 2024”, with advertising revenues in January and February ahead of last year, business and consumer confidence on upward trends, and a recovering real estate market, he said.

“However, sentiment among market commentators remains one of economic uncertainty and there is no clear consensus on the outlook.”

Boggs joined other media executives last week in pleading for Parliament to pass legislation that would require search and social media giants such as Google and Meta to have licensing deals for media content shared through their platforms on terms that could ultimately be set by a regulator.

Boggs said a voluntary deal it had negotiated with Google was a “fraction of the value it should be” and the importance of the Fair Digital News Bargaining Bill now being considered by a select committee “could not be overstated”.

NZME shares were up 3 cents at $0.99 in lunchtime trading on the NZX in the wake of its results announcement, valuing the firm at $185m and indicating the profit-drop came as no surprise to investors.