Despite the profit slump and advertising slowdown, NZME maintained its 3 cents per share dividend for the year.
It expects full-year profit to come within the lower end of its previously forecast range of $59m to $64m, but believes the market has shown signs of turning.
NZME reported operating revenue of $166m for the first half, down 6 per cent on the corresponding period last year.
Within that, digital advertising was down 12 per cent, “the easiest advertising to turn off when businesses aren’t doing that well”, Boggs said.
Real estate listings business OneRoof also took a hit from the economic slowdown, with advertising revenue on the property platform down year-on-year.
Green shoots
Boggs said he expected advertising revenue to bounce back in the second half, with ad revenue up 3 per cent year-on-year in August, and September also showing signs of a return to growth.
“It’s been a difficult year from a market perspective, and there’s been a big reduction in what larger customers are spending on advertising,” Boggs told BusinessDesk.
“But we’re seeing green shoots and some improvement in consumer confidence, certainly in the property market.”
The company did achieve growth in overall Herald subscriptions, which climbed to 218,000 (compared to 209,000 at the end of 2022). Of those, 123,000 were digital-only subscriptions (up from 113,000 at the end of 2022).
Earnings before interest, tax, depreciation and amortisation fell from $28.1m to $21.3m year-on-year in the six months to June.
In a call with analysts, Boggs said the company’s forecast to stay within its earnings range “was not predicated on significant growth” in the New Zealand economy.
He said he was confident about the second half after seeing data from August and bookings for September.
Election noise
This year’s Rugby World Cup and the forthcoming election are expected to have an impact on performance, with the sporting event leading to “strong [advertising] demand”.
The election would bring “positives and negatives”, Boggs said, with some advertisers “put off by the election noise”.
The results come as NZME confirmed a restructure of its editorial operation, with digital and print teams set to be separated. Boggs said the editorial changes were not a cost-cutting measure, and were being made to “focus on stories for a digital-first environment”.
As this week’s GfK radio ratings cemented NZME’s strength in the music and talk radio markets, Boggs said Newstalk ZB increased its market share in talkback by a percentage point in the first half of the year after the collapse of MediaWorks station Today FM.
Global giants
Looking ahead, Boggs said he supported the Government’s plan to force technology firms to pay for news content, but understood the law “won’t be passed before the election”.
National has indicated it does not support the law to force commercial deals, but Boggs said he talked to the party’s media spokeswoman Melissa Lee about addressing the balance between news groups and Big Tech.
A key area of focus was tech firms’ use of news to feed artificial intelligence chatbots, he added.
“The key for us is ensuring that the global giants pay for the content they use,” Boggs added. “She [Lee] has been very clear that anything that is a breach of copyright should ensure that they pay for it. I think there’s more work to be done to make sure these giants are paying.”
