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NZME stutters to small gain in earnings

NZ NewswireNZ Newswire 25/08/2016 Jonathan Underhill

NZME, the New Zealand media group awaiting Commerce Commission approval to acquire Fairfax Media's local assets, posted a 0.5 per cent gain in first-half pretax earnings.

In its debut results as a separate, New Zealand-listed company NZME reported trading earnings before interest, tax, depreciation and amortisation of $32.5 million, from $32.4m a year earlier. Revenue fell 7.9 per cent to $197.8m and costs declined 9.4 per cent to $165m.

Net profit jumped to $60.8m from $21.9m, including $125m from discontinued operations offset by an income tax expense of $61.5m. Tax included $17m as its share of a $33.9m settlement of a historical tax dispute with the Inland Revenue Department.

APN New & Media, which spun off NZME in June, is paying the other half.

"NZME have delivered stable results in a challenging advertising market as well as listing on the NZX Main Board and ASX and completing the demerger from APN News & Media," said chairman John Anderson.

APN spun off NZME via a distribution of shares to focus on its Australian assets.

Rupert Murdoch's News Corp subsequently bought APN's Australian regional newspaper business, leaving APN to focus on its radio stations and outdoor advertising business. News Corp owns 14.99 per cent of NZME.

Revenue in its print division, which includes the NZ Herald and Herald on Sunday but excludes the impact of the closure of its unprofitable Pacific Magazines licensed business, fell 8.1 per cent to $118 million in the first half.

Print advertising revenue, which contributed about 33 per cent to NZME's overall revenue in the first half, was "impacted by a tough agency market" although there were signs of improvement in the second quarter, it said. Print circulation revenue was little changed from a year earlier.

Its Radio and Experiential business, which includes Newstalk ZB, recorded a 6 per cent decline in sales to $55.8m, or 28 per cent of NZME's total revenue, however Digital revenue grew 19.5 per cent to $23.9m.

This week the Commerce Commission delayed its decision on the proposed merger between NZME and Fairfax Media's New Zealand assets, saying the deal is complex and it needs more time. It now expects to release a draft determination in early November.

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