Newstalk ZB host Heather Du Plessis-Allan in the NZME newsroom. Photo / Alex Robertson
Newstalk ZB host Heather Du Plessis-Allan in the NZME newsroom. Photo / Alex Robertson
Media company NZME has reported full-year earnings of $66 million, in line with guidance, and a net profit of $34.4m, more than double the previous year because of a $15.4 million gain on the sale of GrabOne.
The company, which owns the NZ Herald, declared a 5c per share fully franked final dividend (taking total dividends for the year to 8c) and said a previously announced $30m share buyback programme would commence next month.
The shares leapt 13c, or 11.4 per cent, to $1.27 following the announcement and are now up nearly 25 per cent over the past 12 months.
NZME's operating ebitda of $66m was near the top end of the company's $63m-$67m full-year guidance while operating profit (ex GrabOne) was $23.6m, up 6 per cent on the previous year.
Operating revenue came in at $349.2m, up from $331.2m the previous year. Total digital revenue grew 37 per cent to $79.5m in 2021, with overall audience increasing from 3.3m to 3.5m in 2022.
The NZ Herald Premium news subscription service grew to 191,000 subscribers - up from 102,000 a year ago - and now includes 83,000 paid digital-only subscribers, driving a 75 per cent increase in digital subscription revenue, the company said.
NZME owns the New Zealand Herald, Newstalk ZB, the OneRoof property website and a suite of entertainment radio stations including ZM, The Hits and Hauraki.
The company is in the process of transformation into a digitally focused media business.
It is rolling out this strategy across three core segments: audio, publishing and real estate platform OneRoof.
Chief executive Michael Boggs said the business was making progress in its digital transformation, and he was pleased with the 37 per cent increase in total digital revenue compared with the 2020 financial year.
NZME chief executive Michael Boggs. Photo /Dean Purcell
"NZME's ability to generate advertising revenue has remained resilient against Covid-19 related headwinds in 2021, growing 13 per cent compared to 2020 despite nationwide Covid-19 restrictions in the second half of 2021.
"Our commitment to putting customers first, especially through these challenging times resulted in a strong finish to the year with November and December 2021 advertising revenue exceeding 2019 levels as customers utilised NZME's platforms to build their own brands," Boggs said.
Advertising revenue remained resilient against Covid-19 headwinds in 2021, in which there were eight months affected by lockdown. Despite this, advertising revenue had grown 13 per cent over the year, the company said.
Print advertising revenue increased 3.7 per cent, audio advertising was up 11 per cent and digital soared by 49.1 per cent.
Outlook and strategy update
Chairwoman Barbara Chapman said despite the disruptions and challenges of 2021, NZME's strategic priorities remained relevant and robust.
"In 2022, the board continues to focus on delivering shareholder value through dividends and the on-market share buyback, but we also remain in a strong position to make investments that align with our strategic priorities and fuel NZME for growth," she said.
NZME chairwoman Barbara Chapman. Photo/Michael Stephen
The outlook was still uncertain with the impact of the Omicron variant outbreak developing.
NZME noted that the housing market is cooling and inflationary pressures are building.
"Given this, businesses are cautious in their marketing approach at this time," NZME said in its results presentation.
"Despite the uncertainty, we are pleased to see advertising revenues continue to track above 2021, with [first quarter] 2022 currently tracking 4 per cent above 2021 levels. This revenue growth is offsetting the inflationary cost pressures.
"Based on the early trends to date, we would expect ebitda growth over 2021 despite the loss of the GrabOne contribution from 2021."
NZME has fully paid down debt to end the period in a net cash position of $13.5m, an improvement of $47.4m throughout 2021.
The debt reduction - down from almost $100m in 2018 - had provided the board with options on how best to deliver value to shareholders, including the on-market share buyback programme expected to commence in March 2022, and the final 5c dividend payout.
