Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television [NZX: SKC].
Net profit rose to $18.1 million in the 12 months ended June 30 from $14.4 million a year earlier, beating the $16.8 million surplus forecast in its 2014 statement of intent, the Auckland-based company said in a statement. Revenue slipped 0.45 percent to $360.6 million, while underlying earnings, which stripped out gains from asset sales, rose 7.5 percent to $27.2 million.
"Encouraging progress has been made in the last year as we reshape TVNZ to succeed in the rapidly evolving media world," chief executive Kevin Kenrick said. "Content continues to be at the heart of the business and our future slate of new and returning local and international programming is very strong."
In September last year, TVNZ agreed to sell two plots of prime Auckland real estate to SkyCity Entertainment Group for $10.6 million, which it would use to refurbish its main building on Auckland’s Victoria St West, where it plans to house its staff. The government agreed to forgo dividends for up to three years to help fund the upgrade.
TVNZ today said it exited stakes in Hybrid Television Services and Igloo, selling its minority stakes back to Hybrid and Sky TV respectively.
"The recent exit of non-core assets has freed up capital to invest in technology infrastructure to fast track online growth and to refurbish its Auckland building to meet future accommodation needs in one central location," the broadcaster said.
TVNZ invested $12.25 million for a 49 percent share in Igloo in 2012, but reduced its shareholding size to 34 percent last year before completely exiting the business this year.
The broadcaster took a $3.2 million charge on asset impairments and a $6.3 million charge on its share of losses in associates in 2014.
Television ad revenue shrank to $306.8 million in the June year from $311.6 million a year earlier, though digital ad spending climbed to $12.9 million from $9.9 million.
Advertising Standards Authority figures show TV advertising turnover climbed 3.3 percent to $634 million in calendar 2013, while interactive ad turnover rose 29 percent to $471 million.