Performance ‘solid’ despite profit fall, NZME says

Publisher and radio broadcaster NZME [NZX:NZM] says its net trading profit fell 4% in the year to December, describing the performance as “solid.”

Statutory profit for the year was $20.9 million, down from the previous year’s figure of $74.5 million, which was significantly affected by one-off items.

The company, which publishes the NZ Herald newspaper and website and runs a network of radio stations, announced a final dividend of 6c a share, matching last year’s payment.

Revenue from continuing operations fell 4.5% to $391.6 million.

NZME does not break out the profitability of its print, radio or digital segments but said revenue from print of $221 million declined 7% on the previous year. Radio revenue fell 4% to $110 million while digital grew 8% to $56.3 million.

The company also said its print advertising revenue fell 9% to $121 million while print circulation revenue fell 3% to $83.3 million.

Chief executive Michael Boggs said the year included “a difficult third quarter, partly due to national elections.”

However, “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.”

The company said it expected a similar outlook in 2018 but said growth initiatives, such as its digital advertising ventures Driven, Yudu and OneRoof, would deliver revenue benefits over the medium term.

The three projects, targeting motor vehicle sales, recruitment and property, will launch this quarter, NZME said.

Costs during the year included $4.3 million on redundancies, down from $6 million the previous year.

NZME said the continuing costs of appealing the High Court’s rejection of its merger with Stuff would be just $500,000, shared with Stuff, and were “significantly outweighed by the potential benefits of the transaction, both for shareholders and the New Zealand public.”

The company said merger costs in 2017 were about $3 million.