Since June last year the company has repaid nearly $20m of debt. Digital subscriptions have surpassed 15,000.
Since June last year the company has repaid nearly $20m of debt. Digital subscriptions have surpassed 15,000.
NZME continues to focus on paying down debt while investing in new revenue streams to counter the challenging advertising market.
The plan is showing success with more than 15,000 people having already signed up for NZ Herald digital subscriptions in the first 16 weeks – some 50 per cent more than the company's initial annual target.
Meanwhile, NZME's One Roof property listing portal generated revenue of $1.3 million and lifted monthly unique browser numbers 33 per cent to 297,000.
In announcing NZME's half-year result, chief executive Michael Boggs said the company was on track to reduce debt by $10-15 million in calendar 2019, having repaid $8.1m in the six months to June 30.
Since June last year the company has repaid nearly $20m. Net debt fell to $90.2m as at June 30, down from $98.3m at the end of December.
Boggs said the medium-term capital management plan was for a net debt to Ebitda ratio of 1-1.5 times and if the company can get within range of that then, subject to trading conditions, the board will consider reinstating a dividend payment to shareholders.
NZME reported half-year operating Ebitda of $19.4 million - down 16 per cent compared with the same time last year. Net profit fell to $950,000 from $3.7 million a year earlier, mainly due to redundancy costs and historical holiday pay adjustments.
"Given the well-reported market headwinds, this is a solid result supported by some strong growth in our digital initiatives," Boggs said of the media company whose stable includes the NZ Herald, provincial newspapers, radio stations including Newstalk ZB, Radio Sport, ZM, The Hits and Radio Hauraki, and e-commerce plays including GrabOne, Yudu and OneRoof.
The company cut operating costs by 3 per cent to $158.1 million. However total revenue was down 4 per cent to $181.1m as advertising revenue continued to decline.
There were some signs of a recovery in the advertising market, Boggs said, with third-quarter bookings up 6 per cent from a year earlier, although he was wary of the softening economy and weak business and consumer confidence.
NZME chief executive Michael Boggs. Photo / File
"We really are gaining share from an overall print, subscriber, readership and fundamentally advertising revenue perspective. That print advertising is really important to us as 54 per cent of our revenue as a business still comes from our print products."
He said there was opportunity for NZME to be more efficient, while at the same time continuing to invest in the new businesses.
The launch of Premium digital subscriptions had been a "huge success" he said, adding that subscribers were highly engaged, spending three times longer on nzherald.co.nz than non-subscribers.
"I've been pleased to see that we are consistently having new subscribers come onboard and fundamentally it's for the same reason – great journalism, whether it be across business, politics or sport. Those are the three key areas that are driving it. Also, churn hasn't been as high as we thought it would be."
Asked whether he had a new annual target in mind for digital subscription numbers, Boggs highlighted instead a medium-term goal such as what the Australian has achieved across the Tasman.
"They have about 6-7 per cent of their digital audience now paying and so if I was to apply those numbers to NZME and the 1.7m people that come to the NZ Herald website every month, that's about 100,000-120,000 people. So that's the mid-term goal of what 'good' sort of looks like."
Boggs also highlighted NZME's reach. On a typical day 477,000 New Zealanders read the NZ Herald newspaper, an increase of 18,000 readers compared to the same period last year.
That's the highest readership level in four years, he said.
Amid the challenging environment for media companies there have been growing calls for the Government to step in and help the industry in some way.
Boggs said he the company policy was not to comment on the speculation in the media industry.
"But one thing I am encouraged by is that Minister [Kris Faafoi] is absolutely showing an interest in what's happening in the industry and trying to turn his mind as to any particular ways Government can help."
