NZME owns the NZ Herald, OneRoof, Newstalk ZB, a suite of other radio stations and regional newspapers and BusinessDesk.
NZ Herald publisher NZME today posted earnings of $54.2 million and a post-tax loss of $16m after a non-cash impairment of intangible assets - and says it is considering separating its property brand OneRoof into an entirely new business.
The company also says 2025 has started more positively with anticipated advertising revenue growth of 4% in the first quarter.
Its earnings for 2024 are in line with its earlier, updated, guidance of $53m-$55m. The post-tax loss follows a $24m non-cash impairment of intangible assets such as mastheads and brand names for publications.
The company - which also owns Newstalk ZB and a suite of entertainment radio stations - said despite a “challenging” economy, operating revenue had increased 2% from $340.8m to $345.9m.
In a statement, NZME said 2025 had started well and is anticipated to deliver advertising revenue growth of 4% for the first quarter of 2025 after adjusting for the recent exit of community newspapers.
“OneRoof has continued its strong audience performance into 2025 and is delivering year-on-year digital revenue growth of 30% across January and February 2025,” it said in its outlook.
“Given the revenue growth to date and our focus on cost control, subject to the continuing improvement in market advertising demand, we expect to deliver improved operating results during 2025.”
On an investor call on Wednesday morning, NZME chief executive Michael Boggs and chief financial officer David Mackrell also touched on recent newsroom changes - including the loss of 30 roles. The company says it expects most of the $4 million savings to be realised in 2025.
As part of the changes, the company is investing in a new video livestream platform, called Herald Now.
Boggs told attendees on the call revenue from video advertising was in the single-digit millions today and with the launch of the new FAST (free ad-supported streaming television) platform “we would expect it to be many multiples of that”.
The company said OneRoof continued to be “a very strong performer, with significant future growth potential”.
NZME said it had launched a strategic review to accelerate OneRoof’s growth and realise its ”full potential in delivering value for shareholders”.
Opportunities included the potential separation of OneRoof “to enable raising external capital, either public or private, to surface its value”; “potential pathways to value recognition and monetisation”; consolidation opportunities; and “additional resourcing and extra capacity opportunities”.
“A progress update on this independent review will be provided as part of NZME’s half-year results later in the year.”
NZME was also looking to increase its board membership from five to six.
“With digital transformation at the heart of NZME’s overarching strategy, the NZME board is seeking a new member with experience in digital acceleration to further complement the vast experience and skills of the current board,” the company said.
“A new OneRoof board will also be implemented this year which will include the appointment of a property marketplace specialist.”
The company also indicated a new editorial and content series was brewing.
“NZME will also focus on taking a leadership position to help New Zealand thrive, using its various platforms including the NZ Herald to support the reboot and acceleration of New Zealand’s economic recovery, sharing stories of success and building positive momentum”.
Boggs said: “Despite continued challenges across the media industry, NZME has performed well thanks to our strong digital strategy and our uniqueness in offering a strong, diverse portfolio of platforms for advertisers. Our focus on product profitability and simplifying our business in 2024 was critical to NZME remaining strong and profitable.”
NZME continued to perform exceptionally well digitally, he said, with OneRoof’s digital revenue increasing by 51% and now making up 61% of OneRoof’s total revenue – up from 54% in 2023.
The company said digital audio revenue was $10.8 million - a 32% increase on the previous year - while podcast revenue grew 67% year on year. Digital radio streaming revenue increased by 19% and NZME’s digital subscription business “demonstrated resilience in a challenging market, with revenue growing 10% to $22.6m”.
NZME board chair Barbara Chapman said NZME’s robust digital strategy was “crucial not only in responding to the evolving ways audiences are consuming content, but in creating unique, diverse, high-impact opportunities for advertisers across multiple platforms”.
NZME’s strong capital position meant it was set to deliver a final dividend in line with last year.
“The board has declared a fully imputed final dividend of 6.0 cents per share bringing the total dividends declared in relation to the 2024 financial year to 9.0 cents per share,” the company said.
In November, NZME lowered its guidance on earnings for the 2024 financial year, dropping it to $53m-$55m, down from earlier forecasts of $57m-$61m.
NZME said in a statement to the NZX in November that advertising growth in its third quarter (July-September) had dropped to -1% year on year, after growth in the first quarter of 4% and in the second quarter of 2%.
While the fourth quarter had started positively, the company said in November, it nevertheless lowered its earnings guidance.
Today’s result comes as the company cuts about 30 roles from its newsroom, to improve the profit margins of its publishing business. Late last year, NZME also closed 14 community newspapers around the North Island. Several of these have been saved after local editors bought the titles and are now operating them independently.
The cost-cutting at NZME comes on the back of a challenging year for New Zealand media. All major commercial media companies, including TVNZ, NZME, Stuff, MediaWorks and Whakaata Māori have been cutting costs. In the case of Warner Bros Discovery, it axed its news operation, Newshub, entirely.
NZME shares closed on Tuesday at $1.04. By 11am on Wednesday, they were at $1.15.
In August, Jarden head of research Arie Dekker issued a research note with a target share price of $1.19.
In comments last month to Media Insider, Dekker said NZME had done a good job containing costs in recent years, but he also highlighted the difficulty in balancing that with maintaining quality journalism: “It’s difficult to shrink to greatness”.
Dekker, a close observer of NZME, said the proposed newsroom cuts at the NZ Herald and Newstalk ZB highlighted a continuing economic challenge for media companies in 2025.
In his research note published last August, Dekker said he was expecting NZME to post earnings of around $55.7m, a number which was lower than NZME’s original forecasts, earlier in 2024, of earnings of $57m-$61m.
“Last year – it’s pretty well documented – was a very tough year for media organisations, even one with strong franchises such as NZME,” Dekker told Media Insider last month.
“We took a cautious view when we set our numbers because we thought it was going to be a tough year.”
A second-half recovery that may have been factored into NZME’s earlier forecasts did not play out, Dekker said, “particularly with ad revenues being quite lumpy from month to month, as I understand it, as well”.
A downgraded earnings announcement was “not entirely surprising”.
The recent announcement of newsroom cuts were indicative of the business turning its mind to the outlook for 2025, he said. “I imagine those cuts are reflective of the fact that the business probably needs to make some adjustments for what could remain a pretty challenging first six months.”
He said NZME had done a good job, particularly during the Covid period, of adjusting costs.
“For all the relative success that NZME has had – it has a strong publishing franchise, it’s got some pretty solid radio assets – it hasn’t been able to avoid the ongoing structural pressures in the business.
“It’s actually executed a move to digital subscriptions pretty well but it’s still had to make adjustments on the cost base. Investors would look at that – that is the reality of the business NZME’s in.”
Dekker said there would be a fine balance with the cuts, especially those that impacted frontline journalists.
“The challenge is that it’s difficult to shrink to greatness. Ensuring that you’ve got the resources still to maintain an attractive proposition for audiences is obviously that challenging thing to manage when you’re also faced with the reality of having to cut costs.”
Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.
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