Thursday 22nd February 2018
|Text too small?|
NZME maintained its final dividend payment against expectations of a cut after posting a 2 percent drop in annual earnings as the newspaper publisher and radio station owner slowed the decline in its print advertising and kept a lid on costs.
Trading earnings before interest, tax, depreciation and amortisation fell to $66.2 million in calendar 2017 from $67.2 million a year earlier, the Auckland-based company said in a statement. That was a better result than the forecast for earnings of $65.7 million from Forsyth Barr analyst Matt Henry, who was also anticipating a final dividend payment of 5.6 cents per share.
NZME's board declared a final dividend of 6 cents, unchanged from a year earlier, with chair Peter Cullinane saying the company's "strategy and ongoing benefits of integration continued to deliver value for shareholders." That takes the annual payment to 9.5 cents.
Revenue fell 4.2 percent to $390.7 million, with advertising sales down 5.4 percent to $279.1 million and subscriptions falling 4 percent to $83.3 million, while operating costs dropped 8.5 percent to $332.8 million. Net profit fell 72 percent to $20.9 million, or 10.7 cents per share, in 2017 from $74.5 million, or 30.9 cents, a year earlier, when the bottom line was affected by a tax bill and gain on the sale of Australian assets during its demerger from APN News & Media.
"We are pleased to see the decline in print advertising revenue slow a little given stable print readership and the success of our integrated sales strategies," chief executive Michael Boggs said. "Print subscriber revenues were stable for the year and we are happy to have outperformed the market in both print advertising and circulation volume trends."
NZME's print division - spearheaded by daily Auckland newspaper the New Zealand Herald - remains the company's biggest source of revenue, posting a 7 percent decline in sales to $221.3 million. Of that, advertising sales dropped 9 percent to $121 million while circulation revenue fell just 3 percent to $83.3 million. Other revenue dropped 10 percent to $17 million.
The publisher's rival - Fairfax Media-owned Stuff - yesterday announced plans to sell or close a third of its New Zealand newspapers to pursue its digital strategy built around the stuff.co.nz and Neighbourly websites. The exit is largely in regional community and agricultural papers and doesn't include any of Stuff's flagship mastheads.
NZME and Stuff are still pursuing a merger after being rejected by the Commerce Commission over fears such a deal would aggregate too much influence under one entity. That was upheld by the High Court, although both companies are appealing the decision, and NZME today signalled a willingness to go to the Supreme Court if need be.
"Merging with Stuff Ltd remains a priority to underwrite the competitiveness of New Zealand content generation and delivery," it said.
NZME expects future shared costs will be less than $500,000. Its share of the High Court appeal were included in a $3 million expense in 2017, which also covered the company's integration and co-location.
The company's radio division, which includes NewstalkZB, The Edge, and ZM, posted a 4 percent decline in revenue to $110.1 million, while its digital business boosted revenue 8 percent to $56.3 million.
NZME eased back on its redundancies in 2017, spending $4.3 million in the year, down from $6 million a year earlier. The media company cut its wage bill 2.6 percent to $157.4 million, and its production and distribution costs 8.9 percent to $75 million.
That didn't extend to its executive team and the board, with key management expenses climbing 32 percent to $7.6 million, or 4.8 percent of the wage bill compared to 3.5 percent a year earlier. That included $364,000 of termination payments, and $1.2 million of share-based payments, up from a $52,000 termination bill and $144,000 of share-based payments in 2016.
The shares last traded at 76 cents and have dropped 14 percent so far this year.
No comments yet
Telstra to join Southern Cross Cable, diluting Spark shareholding
Transpower faces sanction for handling of 2017 outage
Credit unions seek scale and profitability in five-way merger
Napier Port profit hits record as it handles record 5.1M tonnes of cargo
Govt scraps CTO role in favour of 'a small group'
MBIE involvement in spying on political parties an 'affront to democracy': SSC
NZ business confidence gets a pre-Christmas lift
Aged care, tourism first in line for temporary migrant sector agreements
Moody's puts its stamp of approval on the government's finances
RBNZ chief economist McDermott leaving central bank to join Motu