NZME Half Year Results to 30 June 2018
NZME Limited
Results for announcement to the market
Reporting Period 6 months to 30 June 2018
Previous Reporting Period 6 months to 30 June 2017
Amount (000s) Percentage change
Revenue from ordinary
activities
$NZ 189,094 -0.8%
Profit (loss) from ordinary
activities after tax
attributable to security
holder
$NZ 3,657 -52.9%
Net profit (loss)
attributable to security
holders
$NZ 3,657 -52.9%
Final Dividend Amount per security Imputed amount per
security
NZ 2 cents NZ 0.7778 cents
i
i A supplementary dividend of NZ 0.3529 cents per security will be payable to shareholders who are not tax resident
in New Zealand and who hold less than 10% of the shares in NZME Limited.
Record Date 16 October 2018
Dividend Payment Date 26 October 2018
Comments: A brief For the 6 months to 30 June 2018, NZME Limited’s
reported profit from ordinary activities after tax was
NZ$3.7 million compared to a profit of NZ$7.8 million in
the comparative period.
The net profit after tax for the 6 months to 30 June 2018
of NZ$ 3.7 million is down 52.9% from the net profit
after tax for the 6 months to 30 June 2017 of $7.8
million.
Net assets per share as at 30 June 2018 was NZ$ 1.43
compared to NZ$ 1.44 as at 30 June 2017.
Net tangible assets per share as at 30 June 2018 was
NZ$ (0.23) compared to NZ$ (0.26) as at 30 June 2017.
Refer to the attached unaudited Consolidated Interim Financial Statements for the six
months ended 30 June 2018 for NZME Limited and its subsidiaries and the Results
Presentation for a more detailed analysis and explanation.
---
INTERIM REPORT
NZME LIMITED
For the six months ended 30 June 2018
NEWSTALKZB.CO.NZ
Your
morning
line up.
Auckland
89.4 FM
FROM 5AM WEEKDAYS
32
NZME H1 2018
RESULTS SUMMARY
1
Trading measures are non-GAAP measures that are explained and reconciled in the
supplementary information on pages 30-31 of the NZME Half Year 2018 Results Presentation on
the Company’s website.
2
A supplementary dividend of 0.3529 cents per share will be payable to
shareholders who are not tax resident in New Zealand and who hold less than 10% of the shares
in NZME Limited.
3
H1 17 Trading revenue includes other income.
Statutory NPAT
$3.7m
H1 17 $7.8m
53%
Trading EBITDA1
$23.2m
H1 17 $28.2m
18%
Trading Revenue1
$185.7m
H1 17 $191.0m
3
3%
Interim Dividend Fully Imputed
2.0cps
2
Scheduled for payment on
26 October 2018
32
54
NZME H1 2018 Results Summary 3
Letter from the Chairman and CEO 6
NZME H1 2018 Operational Priorities 8
Directors’ Statement 11
Consolidated Interim Income Statement 12
Consolidated Interim Statement of Comprehensive Income 13
Consolidated Interim Balance Sheet 14
Consolidated Interim Statement of Changes in Equity 15
Consolidated Interim Statement of Cash Flows 16
Notes to the Consolidated Interim Financial Statements 17
Basis of Preparation 17
Group Performance 19
Operating Assets and Liabilities 23
Capital Management 25
Group Structure and Investments in Other Entities 30
Other Notes 32
Independent Auditor’s Review Report 33
Directory 35
CONTENTS
54
N
ZME is pleased to report financial results for the
first half of 2018 that reflected modest declines
in revenue in a difficult market and the launch of
three new digital classified portals.
Net profit after tax for the six months ended 30 June 2018
was $3.7 million. Trading Revenue
1
declined 3% compared
to the first half of 2017 with ongoing pressure on print
advertising revenues not entirely offset by market share gains
and strong digital revenue growth.
Trading EBITDA decreased 18% on H1 2017 to $23.2 million.
Total Trading Costs were stable on H1 2017 with $3.4 million
of efficiency improvements partly offset by $3.1 million
of additional costs invested in the new Digital Classifieds
portals, OneRoof, YUDU and DRIVEN. Excluding the costs
associated with Digital Classifieds, underlying EBITDA
declined 7% on H1 2017.
The NZME audience of 3.3 million New Zealanders
2
represents almost 80% of the New Zealand population. In
H1 2018 the NZ Herald weekly brand audience grew 10%.
NZME’s Radio audience was stable and the new Digital
Classified portals enjoyed strong audience growth.
In radio, Newstalk ZB remains the number one radio station
in New Zealand. Registered listeners via the iHeart Radio app
grew by 24% over the past year to more than 782,000.
Digital advertising revenue grew 17% on H1 2017 to
$23.9 million, ahead of industry growth rates. Digital and
e-Commerce revenue now represents 16% of our Trading
Revenue, up from 14% in H1 2017 and 12% in H1 2016.
Investing for growth
Developing new revenue streams remains a priority.
We are excited to tell you that NZME’s three digital classifieds
platforms, DRIVEN, YUDU and OneRoof, all launched in
the first quarter of 2018. Each platform has been built with
the aim of providing an innovative user experience and
differentiated offering from comparable products in the
market. Growth in listings and audience, since launch, has
been highly encouraging.
While the medium-term opportunity for these platforms
is appealing, the market is competitive and financial
expectations in the initial phase of operation remain modest.
Over the second half of the year, NZME is on track to have
paid subscription capability ready to launch on our key digital
LETTER FROM THE CHAIRMAN & CEO
NZME invests
for growth and
declares a half
year dividend of
2.0 cents.
Peter Cullinane
Michael Boggs
23 August 2018
76
mastheads. We intend to adopt a “freemium” model with
day-to-day news and current affairs provided free and in-
depth analysis and opinion available on subscription.
Capital expenditure was $7.1 million in the first half, compared
to $6.8 million in H1 2017. Gearing and liquidity ratios are
sound with net debt of $106.1 million at 30 June 2018.
The half year dividend of 2.0 cents per share reflects
lower earnings available for distribution, partly due to the
investment in Digital Classifieds and continued revenue
challenges. The fully imputed dividend is scheduled for
payment on 26 October 2018, for shareholders on the
register at 16 October 2018. A supplementary dividend will
be paid to qualifying non-resident shareholders.
NZME and Fairfax appealed the High Court’s adverse ruling
on the Stuff Limited (previously Fairfax New Zealand)/NZME
merger in H1 2018, with a judgment expected in the second
half.
Board appointments
We are pleased to report that two highly experienced
former executives in the finance and media sectors,
Barbara Chapman and Sussan Turner, were appointed
as Independent Directors during the half. The Board now
comprises five directors with a strong mix of experience
and skills to support the development and implementation
of strategy and maintain high standards of corporate
governance.
Outlook
In the first half of this year, advertising revenue (excluding
the impact of the adoption of NZ IFRS 15) declined 4% on the
same period last year. Agency revenue across all channels
remains pressured by softening business and consumer
confidence and advertising bookings for the third quarter
of 2018 are also down 4% year on year, consistent with
our first half result. NZME continues to hold or increase its
share of the measurable NZ advertising markets. However,
agency advertising spend remains challenged and softening
economic conditions have the potential to weaken or delay
advertising revenue in the second half of 2018.
Further cost savings are anticipated in the second half,
although the rate of cost reduction is slowing. NZME will also
continue to invest in our Digital Classified platforms in the
second half.
Supported by revenue retention in the existing business,
and the development of new revenue streams, NZME’s goal
remains to achieve overall revenue and EBITDA growth in the
medium term. However, full year 2018 EBITDA will reflect this
softened market and ongoing investment.
NZME has six priority areas of focus for the current year to
enhance shareholder value:
1. Grow audience and engagement through
amplification of NZME’s brands;
2. Return advertising revenue to growth;
3. Effective cost and capital management;
4. Engage and develop our people;
5. Grow new revenue streams; and
6. Progress the Stuff merger.
NZME will continue to work hard in these areas and looks
forward to updating shareholders on progress.
NZME is a leading New Zealand integrated media business
that provides advertisers with a unique multi-media offering,
through which they are able to engage with our growing
audience. While the operating environment remains
challenging, we continue to make good progress on
executing our strategy to grow shareholder value.
Peter Cullinane ChairmanMichael Boggs CEO
1
Trading measures are non-GAAP measures that are explained and reconciled in NZME Half Year 2018 Results Presentation dated
23 August 2018.
2
Nielsen CMI May Fused Q2 17 to Q1 18 (population 10+ years).
76
C
A
P
A
B
I
L
I
T
I
E
S
C
O
R
E
C
O
N
T
E
N
T
+
C
H
A
N
N
E
L
S
RADIO
SPORT
NATIVE
CONTENT
EXPERIENTIAL
EVENTS
DIGITAL
MARKETING
SERVICES
BRAND
ENGAGEMENT
DIGITAL
PRINT
ENT.
NEWS
CREATIVE
CONTENT
CREATION
DIGITAL
CLASSIFIEDS
MARKETPLACES
DATA &
INSIGHTS
VIDEO &
PRODUCTION
AUDIENCE
TARGETING
STRATEGY
& PLANNING
CHINESENZHERAL
D.C
O.NZ
91.0
BREE
CLINT
4PM-7PM
INTRODUCING
98
1.3
PRINT
weekly readers
1
Million
RADIO
2.0
weekly listeners
2
Million
2.4
per month
1
DIGITAL
Unique audience of
Million
1
Nielsen CMI Fused Q2 17 - Q1 18 (population
10+ years)
2
GFK Radio Audience Measurement,
Commercial Stations, NZME and Partners.
Cumulative Audience T2 2018.
• Continued audience
growth and engagement
• Return advertising
revenue to growth
• Effective cost and
capital management
• Develop our talent
and people
• Grow new revenue
streams
• Stuff Merger
NZME H1 2018
OPERATIONAL PRIORITIES
GET MORE THAN A JOB AT
.co.nz
WE’RE HERE TO
LAUNCH CAREERS
SO WE GOT A
MICROBIOLOGIST
TO LAUNCH US
NME0030 GrowIt Digi Screen 540x540px_V4.indd 127/03/18 10:14 AM
98
Consolidated
Interim Financial
Statements
For the six months ended 30 June 2018
1110
The directors are pleased to present the consolidated interim financial statements
of NZME Limited (the”Company”) and its subsidiaries (together the “Group”) for the
six months ended 30 June 2018, incorporating the consolidated interim financial
statements and the auditor’s independent review report.
The directors are responsible, on behalf of the Company, for presenting these
consolidated interim financial statements in accordance with applicable New Zealand
legislation and New Zealand equivalent to International Accounting Standard 34:
Interim Financial Reporting and International Accounting Standard 34: Interim Financial
Reporting.
The consolidated interim financial statements for the Group as presented on pages
11 to 32 are signed on behalf of the Board of Directors, and are authorised for issue on
the date below.
For and on behalf of the Board of Directors
Peter Cullinane
Director
Carol Campbell
Director
DIRECTORS’
STATEMENT
Date: 22 August 2018
1110
NOTE
JUNE 2018
$’000
JUNE 2017
$’000
Revenue2.1
189,094
190,625
Finance and other income 2.1
497
480
Total revenue and other income
2.1
189,591
191,105
Expenses from operations before finance costs, depreciation,
amortisation
(168,887)
(165,457)
Depreciation & amortisation
(13,089)
(12,057)
Finance costs
(2,195)
(2,370)
Profit before income tax expense5,420
11,221
Income tax expense
(1,763)
(3,455)
Profit for the year
3,657
7,766
PROFIT FOR THE PERIOD IS ATTRIBUTABLE TO:
Owners of the Company
3,657
7,766
NOTE
CENTS
CENTS
Earnings per share attributable to the ordinary
shareholders of the Company
Basic / diluted earnings per share2.2
1.9
4.0
The above Consolidated Interim Income Statement should be read in conjunction with the accompanying notes.
CONSOLIDATED INTERIM INCOME STATEMENT
for the six months ended 30 June 2018 (unaudited)
1312
The above Consolidated Interim Statement of Comprehensive Income should be read in conjunction with the
accompanying notes.
CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2018 (unaudited)
NOTE
JUNE 2018
$’000
JUNE 2017
$’000
Profit for the period3,657
7,766
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
9
2
Other comprehensive income, net of tax9
2
Total comprehensive income3,666
7,76 8
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the Company3,666
7,76 8
1312
NOTE
JUNE 2018
$’000
DECEMBER 2017
$’000
CURRENT ASSETS
Cash and cash equivalents4.3
12,556
9,570
Trade and other receivables
52,614
55,323
Inventories
1,554
1,926
Tax receivable
2,556
-
Total current assets69,280
66,819
NON-CURRENT ASSETS
Intangible assets3.1
326,052
330,553
Property, plant and equipment3.2
50,079
56,031
Capital work in progress3.3
13,168
8,694
Other financial assets
5,988
5,988
Total non-current assets395,287
401,266
Total assets464,567
468,085
CURRENT LIABILITIES
Trade and other payables
49,958
56,894
Current tax provision
-
7,567
Total current liabilities49,958
64,461
NON-CURRENT LIABILITIES
Trade and other payables
13,615
13,565
Interest bearing liabilities4.2
118,641
99,788
Deferred tax liabilities
1,230
1,239
Total non-current liabilities133,486
114,592
Total liabilities183,444
179,053
Net assets281,123
289,032
EQUITY
Share capital
360,363
360,363
Reserves
2,580
2,385
Retained earnings
(81,820)
(73,716)
Total equity281,123
289,032
The above Consolidated Interim Balance Sheet should be read in conjunction with the accompanying notes.
CONSOLIDATED INTERIM BALANCE SHEET
as at 30 June 2018 (unaudited)
1514
Attributable to owners of the Company
NOTESHARE CAP-
ITAL
$’000
RESERVES
$’000
RETAINED
EARNINGS
$’000
TOTAL
$’000
Balance at 1 January 2017
360,363(5,198)(69,606)
285,559
Profit for the period--7,766
7,7 6 6
Other comprehensive
income
-2-
2
Total comprehensive income
-27,766
7,7 6 8
Dividends paid--(11,761)
(11,761)
Supplementary dividends paid--(1,904)
(1,904)
Tax credit on supplementary dividends--1,904
1,904
Share based payments expense-171-
171
Balance at
30 June 2017
360,363(5,025)(73,601)
281,737
Balance at 1 January 2018
360,3632,385(73,716)
289,032
Profit for the period--3,657
3,657
Other comprehensive
income
-9-
9
Total comprehensive income
-93,657
3,666
Dividends paid4.1.1--(11,761)
(11,761)
Supplementary dividends paid4.1.1--(1,404)
(1,404)
Tax credit on supplementary dividends--1,404
1,404
Share based payments expense-186-
186
Balance at
30 June 2018
360,3632,580(81,820)
281,123
The above Consolidated Interim Statement of Changes in Equity should be read in conjunction with the
accompanying notes.
CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2018 (unaudited)
1514
CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
for the six months ended 30 June 2018 (unaudited)
NOTE
JUNE 2018
$’000
JUNE 2017
$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
188,691
1 87, 28 3
Payments to suppliers and employees
(171,937)
(169,649)
Dividends received
141
111
Interest received
48
77
Interest paid
(2,040)
(3,983)
Income taxes paid
(11,851)
(6,455)
Net cash inflows / (outflows) from operating activities
4.3
3,052
7,3 8 4
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment and intangible
assets (including capitalised work in progress)
(7,110)
(6,801)
Proceeds from sale of property, plant and equipment
5
-
Net cash inflows / (outflows) from investing activities(7,105)
(6,801)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
63,400
3,500
Repayments of borrowings
(44,600)
-
Dividends paid to Company’s shareholders
(11,761)
(11,925)
Net cash inflows / (outflows) from financing activities7,0 3 9
(8,425)
Net increase / (decrease) in cash and cash equivalents2,986
(7,842)
Cash and cash equivalents at beginning of the period
9,570
16,242
Cash and cash equivalents at end of the period
4.3
12,556
8,400
The above Consolidated Interim Statement of Cash Flows should be read in conjunction with the accompanying notes.
1716
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1.0 BASIS OF PREPARATION
1.1 REPORTING ENTITY AND STATUTORY BASE
NZME Limited (NZX:NZM, ASX:NZM) is a for-profit
company limited by ordinary shares which are publicly
traded on the NZX Main Board and the Australian
Securities Exchange as a Foreign Exempt Listing. NZME
Limited is incorporated and domiciled in New Zealand.
It is registered under the Companies Act 1993 and is a
FMC reporting entity under Part 7 of the Financial Markets
Conduct Act 2013. The entity’s registered office is
2 Graham Street, Auckland, 1010, New Zealand.
NZME Limited (the “Company” or “Parent”) and its
subsidiaries’ (together the “Group”) principal activity
during the financial period was the operation of an
integrated media and entertainment business.
1.2 GENERAL ACCOUNTING POLICIES
These consolidated interim financial statements have
been prepared in accordance with New Zealand
equivalent to International Accounting Standard 34:
Interim Financial Reporting, International Accounting
Standard 34: Interim Financial Reporting and the NZX
Listing Rules.
The consolidated interim financial statements do not
include all notes of the type normally included in an
annual financial report. Accordingly, these consolidated
interim financial statements should be read in
conjunction with the audited consolidated financial
statements for the year ended 31 December 2017 and
any public announcements made by NZME Limited
during the interim reporting period and up to the date of
these consolidated interim financial statements. These
consolidated interim financial statements are presented
for the Group.
The material accounting policies used in the preparation
of these consolidated interim financial statements are
consistent with those used in the audited consolidated
financial statements for the year ended 31 December
2017.
Certain prior period information has been re-presented
consistent with current period disclosures to provide
more meaningful comparison. These consolidated
interim financial statements are presented in New
Zealand dollars, which is the Company’s functional and
the Group’s presentation currency, and rounded to the
nearest thousand, except where otherwise stated.
These consolidated interim financial statements were
approved for issue by the Board of Directors on
22 August 2018.
These interim consolidated financial statements have not
been audited, but have been reviewed in accordance
with New Zealand Standard on Review Engagement
2410: Review of Financial Statements Performed by the
Independent Auditor of the Entity.
1716
1.3 SIGNIFICANT ACCOUNTING ESTIMATES
AND JUDGEMENTS
The preparation of the consolidated interim financial
statements requires the use of certain significant
judgements, accounting estimates and assumptions,
including judgements, estimates and assumptions
concerning the future. The estimates and assumptions
are based on historical experiences and other factors that
are considered to be relevant. The resulting accounting
estimates will by definition, seldom equal the related
actual results and are reviewed on an ongoing basis.
Significant areas of estimation and judgment in these
consolidated interim financial statements are consistent
with those disclosed in the audited consolidated financial
statements for the year ended 31 December 2017.
1.4 SIGNIFICANT CHANGES
Proposed merger with Fairfax New Zealand Limited
The previous merger implementation agreement in
respect of the proposed merger between NZME Limited
(“NZME”) and Stuff Limited (“Stuff”) terminated on 5
March 2018. However, if an appeal of the transaction is
successful we will have the ability to negotiate a new
agreement to implement the merger, with the transaction
also expected to be subject to finance, Board and
shareholder approval.
1.5 NEW STANDARDS AND INTERPRETATIONS
ADOPTED IN THE CURRENT PERIOD
The Group adopted NZ IFRS 15 Revenue from Contracts
with Customers for the first time on 1 January 2018.
The Group applied NZ IFRS 15 retrospectively with the
cumulative effect of applying the standard for the first
time recognised at the date of initial application (1 January
2018).
Comparative figures for the period ended 30 June 2017
have therefore not been restated. The Group did not
identify any significant changes in the timing of revenue
recognition as a result of the adoption of NZ IFRS 15 and
accordingly there was no adjustment for the cumulative
effect against opening retained earnings at 1 January
2018. There were instances in revenue relating to certain
types of contracts being recognised at the gross amount
that have been presented at an amount net of related
expenses historically. This resulted in an increase in both
revenue and expenses, with no impact on net profit. Refer
to note 2.1.1 for further information on the impact of the
adoption of NZ IFRS 15 on the period ended 30 June 2018.
1.6 STANDARDS AND INTERPRETATIONS
ISSUED BUT NOT YET EFFECTIVE
NZ IFRS 16 Leases replaces NZ IAS 17 and is effective
for the period commencing 1 January 2019. It requires a
lessee to recognise a lease liability reflecting future lease
payments and a ‘right-of-use asset’ for virtually all lease
contracts. Included is an optional exemption for certain
short-term leases and leases of low-value assets for
lessees. Although the full impact of this standards has not
yet been determined, it will result in additional assets and
liabilities when the current operating leases are brought
on to the balance sheet; with interest and depreciation
replacing the current operating lease expense when the
standard is adopted.
All other standards, interpretations and amendments
issued but not yet effective are either not applicable to
the Group or not material.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1918
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
2.1 DISAGGREGATION OF REVENUE AND OTHER INCOME
2.0 GROUP PERFORMANCE
PRINT
$’000
RADIO &
EXPERIENTIAL
$’000
DIGITAL &
E- COMMERCE
$’000
TOTAL
$’000
Advertising 55,51053,38420,010
128,904
e-Commerce--5,041
5,041
Total advertising
55,51053,38425,051
133,945
Circulation and subscription40,404--
40,404
Exernal printing and distribution4,293--
4,293
Other3,3781,4453,927
8,750
Segment revenue from integrated media and
entertainment activities
103,58554,82928,978
187,392
Shared Services centre
1,70 2
Total revenue from external customers189,094
Dividends
141
Rental income from sub-leases
308
Other income449
Finance income
48
Total finance and other income497
Total revenue and other income189,591
For the period ended 30 June 2018
1918
PRINT
$’000
RADIO &
EXPERIENTIAL
$’000
DIGITAL &
E-COMMERCE
$’000
TOTAL
$’000
Advertising 60,24351,07019,397
130,710
e-Commerce--5,457
5,457
Total advertising
60,24351,07024,854
136,167
Circulation and subscription41,917--
41,917
Exernal printing and distribution4,618--
4,618
Other3,7831,5151,119
6,417
Segment revenue from integrated media and
entartainment activities
110,56152,58525,973
189,119
Shared Services centre
1,506
Total revenue from external customers190,625
Dividends
111
Rental income from sub-leases
292
Other income403
Finance income
77
Total finance and other income480
Total revenue and other income191,105
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
For the period ended 30 June 2017
2.1.1 Impact of NZ IFRS 15 adoption
NZ IAS
18 JUNE
2018
$’000
ADJUSTMENT
JUNE 2018
$’000
NZ IFRS 15
JUNE 2018
$’000
Revenue 185,2523,842
189,094
Finance and other income497-
497
Total revenue and other income
185,7493,842
189,591
Expenses from operations before finance costs, depreciation, amortisa-
tion
(165,045)(3,842)
(168,887)
Depreciation & amortisation(13,089)-
(13,089)
Finance costs(2,195)-
(2,195)
Profit / (loss) before income tax expense
5,420-
5,420
As discussed in Note 1.5, the Group adopted NZ IFRS 15 Revenue from Contracts with Customers for the first time on
1 January 2018. Although the Group did not identify any significant changes in the timing of revenue recognition as a
result of the adoption of NZ IFRS 15, following a detailed analysis of the agency vs principal rules and changes to the
requirements relating to non-cash consideration (particularly as they relate to barter transactions), the Group identified
instances where revenue is now recognised at the gross amount and not net of the related expense as it would previ-
ously have been reported. This results in an increase in both revenue and expenses, with no impact on net profit. The
table below shows the amount by which each financial statement line item is affected in the current reporting period by
NZ IFRS 15 as compared to NZ IAS 18 and the related interpretations that were in effect before the change.
2120
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
2.2 EARNINGS PER SHARE
JUNE 2018
$’000
JUNE 2017
$’000
RECONCILIATION OF EARNINGS USED IN CALCULATING BASIC / DILUTED
EARNINGS PER SHARE (“EPS”)
Profit / (Loss) attributable to owners of the parent entity
3,657
7,766
Adjusted for calculation of diluted EPS
-
-
Profit / (Loss) attributable to owners of the parent entity used in calculating
diluted EPS
3,657
7,766
JUNE 2018
NUMBER
JUNE 2017
NUMBER
WEIGHTED AVERAGE NUMBER OF SHARES
Weighted average number of shares in the denominator in calculating basic EPS
196,011,282
196,011,282
Adjusted for calculation of diluted EPS
-
-
Weighted average number of shares in the denominator in calculating diluted EPS 196,011,282
196,011,282
JUNE 2018
CENTS
JUNE 2017
CENTS
BASIC / DILUTED EARNINGS PER SHARE
Total basic / diluted earnings per share attributable to owners of the parent entity1.9
4.0
2.3 SEGMENT INFORMATION
2.3.1 Determination and description of segments
The Group has one reportable segment – being “Integrated Media and Entertainment”. All significant operating
decisions are based upon analysis of NZME as one operating segment. The Executive Team and the Board of Directors
have been identified as the Chief Operating Decision Maker. The Group’s major products and services are split by
channel only at the revenue level into Print, Radio & Experiential and Digital & e-Commerce which is the way in which
revenue is reported to the Chief Operating Decision Maker. Although the Group operates in many different markets
within New Zealand, for management reporting purposes the Group operates in one principle geographical area being
New Zealand as a whole.
Integrated Media and Entertainment incorporates the sale of advertising, goods and services generated from the
audiences attached to the Group’s media platforms.
2120
2.3.2 Segment revenues and results
The segment information provided to the Directors and Executive Team for the six months ended 30 June 2018
is as follows:
JUNE 2018
$’000
JUNE 2017
$’000
REVENUES FROM EXTERNAL CUSTOMERS BY CHANNEL
Print
103,585
110,561
Radio & Experiential
54,829
52,585
Digital & e-Commerce
28,978
25,973
Segment revenue from integrated media and
entertainment activities
187,392
189,119
Revenue from shared services centre
1,70 2
1,506
Total revenues from external customers189,094
190,625
Dividend income
141
111
Rental income from sub-leases
308
292
Expenses from operations before finance costs, depreciation,
amortisation and exceptional items
(166,352)
(162,819)
Total Segment Adjusted EBITDA
A
23,191
28,209
Depreciation and amortisation
(13,089)
(12,057)
Interest income
48
77
Finance cost
(2,195)
(2,370)
EXCEPTIONAL ITEMS
Redundancies and associated costs
B
(2,096)
(1,407)
Costs in relation to one off projects
C
(439)
(1,231)
Profit before tax from continuing operations5,420
11,221
(A) Adjusted Earnings before Interest, Tax, Depreciation and Amortisation (Adjusted EBITDA) from continuing operations which excludes exceptional
items, is a non-GAAP measure that represents the Group’s total segment result which is regularly monitored by the Chief Operating Decision Maker.
Exceptional items are those gains, losses, income and expense items that are not directly related to the primary business activities of the Group which
are determined in accordance with the NZME Exceptional Items Recognition Framework adopted by the Audit & Risk Committee. Exceptional items
include redundancies, impairment, one-off projects and the disposal of properties or businesses. These items are excluded from the segment result that
is regularly reviewed by the Chief Operating Decision Maker. (B) The redundancies and associated costs relate to the restructuring and integration of the
New Zealand operations. (C) The costs related to one off projects refers primarily to costs of external consultants assisting with the proposed merger
with Stuff Limited and the continuing integration and co-location of NZME.
As the Group has one operating segment, the assets and liabilities as reported on the consolidated balance sheet are
also the segment assets and liabilities, and the income tax expense in the consolidated income statement is also the
segment income tax.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
2322
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
3.1 INTANGIBLE ASSETS
GOODWILL
$’000
SOFTWARE
$’000
MASTHEAD
BRANDS
$’000
RADIO
LICENCES
$’000
BRANDS
$’000
TOTAL
$’000
AS AT 31 DECEMBER 2017
Cost166,39759,384146,9767 7, 54759,079
509,383
Accumulated amortisation
and impairment
(95,614)(44,874 )-(38,342)-
(178,830)
Net book value
70,78314,510146,97639,20559,079
330,553
FOR THE PERIOD ENDED 30 JUNE 2018
Opening net book amount70,78314,510146,97639,20559,079
330,553
Additions-50-59-
109
Amortisation-(3,895)-(1,478)-
(5,373)
Transfers from capitalised work in
progress
-763---
763
Net book value
70,78311,428146,97637,78659,079
326,052
AS AT 30 JUNE 2018
Cost166,39760,198146,9767 7,6 0 659,079
510,256
Accumulated amortisation
and impairment
(95,614)(48,770)-(39,820)-
(184,204)
Net book value
70,78311,428146,97637,78659,079
326,052
3.0 OPERATING ASSETS & LIABILITIES
2322
FREEHOLD
LAND
$’000
BUILDINGS
$’000
PLANT AND
EQUIPMENT
$’000
TOTAL
$’000
AS AT 31 DECEMBER 2017
Cost or fair value1,16514,764330,021
345,950
Accumulated depreciation and impairment-(4,485)(285,434)
(289,919)
Net book amount
1,16510,27944,587
56,031
FOR THE PERIOD ENDED 30 JUNE 2018
Opening net book amount1,16510,27944,587
56,031
Additions-131,748
1,76 1
Depreciation-(1,164)(6,552)
(7,716)
Transfers from capitalised work in progress-21
3
Net book amount
1,1659,13039,784
50,079
AS AT 30 JUNE 2018
Cost or fair value1,16514,779331,677
347,621
Accumulated depreciation and impairment-(5,649)(291,893)
(297,542)
Net book amount
1,1659,13039,784
50,079
3.2 PROPERTY, PLANT AND EQUIPMENT
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
3.3 CAPITAL WORK IN PROGRESS
TOTAL
$‘000
As at 31 December 20178,694
Additions
5,240
Transfers to intangible assets
(763)
Transfers to property plant and equipment
(3)
As at 30 June 201813,168
Capital work in progress, which historically was included under property, plant and equipment, is transferred to the
relevant asset category once the project is completed. Capitalised work in progress is not depreciated or amortised
prior to being transferred to the relevant asset category.
2524
3.4 NET TANGIBLE ASSETS
Net tangible assets per share is a non-GAAP measure that is required to be disclosed by the NZX Listing Rules.
The calculation of the Group’s net tangible assets per share and its reconciliation to the consolidated balance
sheet is presented below:
JUNE 2018
$’000
DECEMBER 2017
$’000
Total assets
464,567
468,085
Less intangible assets
(326,052)
(330,553)
Less total liabilities
(183,444)
(179,053)
Net tangible assets(44,929)
(41,521)
Number of shares issued (in thousands)
196,011
196,011
Net tangible assets per share($0.23)
($0.21)
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
4.1 DIVIDENDS
4.1.1 Dividends paid
On 21 February 2018, the Board of Directors declared a fully imputed final dividend for the year ended 31 December
2017 of 6 cents per share, paid on 3 May 2018 to registered shareholders as at 18 April 2018. The Board of Directors also
declared a supplementary dividend of 1.06 cents per share, paid on 3 May 2018 to registered shareholders as at 18 April
2018, to those shareholders who are not tax residents in New Zealand and who hold less than 10% of the shares in the
Company. The payment of a supplementary dividend effectively puts non-resident shareholders in the position they
would have been had they received imputation credits (which are only available to resident shareholders).
4.1.2 Dividends declared after balance date
On 22 August 2018, the Board of Directors declared a fully imputed interim dividend of 2.0 cents per share, to be
paid on 26 October 2018 to registered shareholders as at 16 October 2018. The Board of Directors also declared a
supplementary dividend of 0.3529 cents per share, to be paid on 26 October 2018 to registered shareholders as at
16 October 2018, to those shareholders who are not tax residents in New Zealand and who hold less than 10% of the
shares in the Company. The payment of a supplementary dividend effectively puts non-resident shareholders in the
position they would have been had they received imputation credits (which are only available to resident shareholders).
4.1.3 Franking and imputation credits
JUNE 2018
‘000
DECEMBER 2017
‘000
Imputation credits available for subsequent reporting periods
based on the New Zealand 28% tax rate for the Group
NZ$ 7,601NZ$8,519
Franking credits available to the Company for subsequent
reporting periods based on the Australia 30% tax rate for the Group
AU$ 0
A
AU$ 0
A
(A) Although the Company does not have any franking credits available for use, other entities within the Group has AU$10,828,676 (December 2017:
AU$10,828,676) available that might become available to the Company in future periods.
4.0 CAPITAL MANAGEMENT
2524
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
4.2 INTEREST BEARING LIABILITIES
JUNE 2018
‘000
DECEMBER 2017
‘000
Non-current interest bearing liabilities
Bank loans – secured
118,800
100,000
Deduct:
Capitalised borrowing costs
(159)
(212)
Total non-current interest bearing liabilities118,641
99,788
NET DEBT
Non-current interest bearing liabilities
118,800
100,000
Capitalised borrowing costs
(159)
(212)
Cash and cash equivalents
(12,556)
(9,570)
Total debt less cash and cash equivalents106,085
90,218
The Group is funded from a combination of its own cash reserves and NZ$160 million bilateral bank loan facility, which
NZME entered into on 29 June 2016, of which $118.8 million (December 2017: $100 million) is drawn and $41.2 million
(December 2017: $60 million) is undrawn as at 30 June 2018. The facility expires on 1 January 2020.
The interest rate for the drawn facility is the applicable bank screen rate plus credit margin.
The NZME Bilateral Facilities contain undertakings which are customary for a facility of this nature including, but not
limited to, provision of information, negative pledge and restrictions on priority indebtedness and disposals of assets.
The assets of the Group are collateral for the interest bearing liability.
In addition, the Group must comply with financial covenants (a net debt to EBITDA ratio and an EBITDA to net interest
expense ratio) for each 12 month period ending on 30 June and 31 December. The Group has complied with these
covenants.
2726
JUNE 2018
$’000
JUNE 2017
$’000
RECONCILIATION OF CASH
Cash at end of the year, as shown in the statements of cash flows,
comprises:
Cash and cash equivalents12,556
8,400
RECONCILIATION OF NET CASH INFLOWS (OUTFLOWS) FROM
OPERATING ACTIVITIES TO PROFIT / (LOSS) FOR THE PERIOD:
Profit for the period
3,657
7,766
Depreciation and amortisation expense
13,089
12,057
Borrowing cost amortisation
53
53
Net gain /(loss) on sale of non-current assets
-
(8)
Change in current / deferred tax payable
(10,087 )
(3,455)
Share based payment expense
186
171
Changes in assets and liabilities net of effect of acquisitions:
Trade and other receivables
3,449
(1,589)
Inventories
372
173
Prepayments
(740)
(99)
Trade and other payables and employee benefits
(6,927)
(7,685)
Net cash inflows from operating activities3,052
7,3 8 4
4.3 CASH FLOW INFORMATION
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
2726
4.4 FAIR VALUE MEASUREMENT
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis:
• Financial assets at fair value through profit or loss (FVTPL);
• Land and buildings.
4.4.1 Fair value hierarchy
NZ IFRS 13 requires disclosure of fair value measurements by level of the following fair value measurement
hierarchy:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly or indirectly, and
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
JUNE 2018
$’000
DECEMBER 2017
$’000
RECURRING FAIR VALUE MEASUREMENTS (LEVEL 3)
FINANCIAL ASSETS
There are no financial assets carried at fair value. Other financial assets
of $5,988,765 (December 2017: $5,988,765) are held at cost and therefore
have been excluded from this table.
NON-FINANCIAL ASSETS
Freehold land and buildings
Freehold land
1,165
1,165
Buildings (excluding leasehold improvements)
372
377
Total non-financial assets1,537
1,542
4.4.2 Recognised fair value measurements
All fair value measurements referred to above are in Level 3 of the fair value hierarchy and there were no transfers
between levels. The Group’s policy is to recognise transfers between fair value hierarchy levels as at the end of the
reporting period.
2928
4.4.3 Disclosed fair values
The Group also has a number of assets and liabilities which are not measured at fair value but for which fair values are
disclosed in these notes.
The carrying amounts of trade receivables and payables are assumed to approximate their fair values due to their
short-term nature. There are no outstanding non-current receivables as at 30 June 2018 or 31 December 2017 (level 3).
The fair value of interest bearing liabilities disclosed in note 4.2 is estimated by discounting the future contractual cash
flows at the current market interest rates that are available to the group for similar financial instruments. For the period
ending 30 June 2018, the borrowing rates were determined to be between 3.3% and 3.9% (December 2017: between
3.3% and 4%), depending on the type of borrowing. The fair value of borrowings approximates the carrying amount, as
the impact of discounting is not significant (level 2).
4.4.4 Valuation techniques used to derive at level 2 and 3 fair values
Recurring fair value measurements
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.
These valuation techniques maximise the use of observable market data where it is available and rely as little as
possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
The Group obtains independent valuations at least every three years for its freehold land and buildings (classified as
property, plant and equipment in note 3.2), less subsequent depreciation for buildings. This is considered sufficient
regularity to ensure that they carrying amount does not differ materially from that which would be determined using
fair value at the end of the reporting period. All resulting fair value estimates for properties are included as Level 3.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
2928
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
5.0 GROUP STRUCTURE AND INVESTMENTS IN OTHER ENTITIES
NAME OF ENTITY
JUNE 2018
DECEMBER 2017
Adhub Limited
C
N /A
100%
ESKY Limited
C
N /A
100%
Grabone Limited
100%
100%
Idea HQ Limited
C
N /A
100%
Mt Maunganui Publishing Co Limited
C
N /A
100%
NZME 2014 Limited
C
N /A
100%
NZME Australia Pty Limited
A
100%
100%
NZME Digital Limited
C
N /A
100%
NZME Educational Media Limited
100%
100%
NZME Finance Limited
C
N /A
100%
NZME Holdings Limited
100%
100%
NZME Investments Limited
100%
100%
NZME Online Limited
C
N /A
100%
NZME Print Limited
100%
100%
NZME Publishing Limited
100%
100%
NZME Radio Investments Limited
100%
100%
NZME Radio Limited
B
100%
100%
NZME Specialist Limited
100%
100%
NZME Trading Limited
C
N /A
100%
Regional Publishers Limited
C
N /A
100%
Sell Me Free Limited
C
N /A
100%
Sella Limited
C
N /A
100%
Stanley Newcomb & Co Limited
C
N /A
100%
The Hive Online Limited
100%
100%
The New Zealand Radio Network Limited
100%
100%
The Radio Bureau Limited
100%
100%
Trade Debts Collecting Co Limited
C
N /A
100%
W & H Interactive Limited
C
N /A
100%
OneRoof Limited
D
100%
N /A
(A) Incorporated in, and operate in, Australia. (B) One “Kiwi Share” held by the Minister of Finance.
The rights and obligations are set out in the NZME Radio Limited constitution. (C) Effective 31 May 2018, these entities were amalgamated into NZME
Specialist Limited. (D) OneRoof Limited was incorporated on 20 March 2018. Subsequent to the balance date, on 21 August 2018, the Group transferred
20% of the share capital in OneRoof Limited to Hougarden.com Limited as consideration for the final payment of $1.1 million for the acquisition of the
platform on which the OneRoof website and related apps are built. The acquisition of the platform has been treated as an asset acquisition and the
subsequent issue of shares will be accounted for as an equity settled share-based payment transaction valued at the fair value of the asset received.
5.1 CONTROLLED ENTITIES
The consolidated interim financial statements incorporate the assets, liabilities and results of the subsidiaries listed
below. Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held directly by
the Group, and the proportion of ownership interest held equals the voting rights held by the Group. All entities are
incorporated in, and operate in, New Zealand unless otherwise stated. There were no changes in control during the
period ended 30 June 2018, but as noted below, certain entities have been amalgamated.
3130
OWNERSHIP
INTEREST
JUNE 2018
OWNERSHIP
INTEREST
DECEMBER 2017
Chinese New Zealand Herald Limited
A
50%
50%
Eveve New Zealand Limited
A
40%
40%
KPEX Limited
A
25%
25%
New Zealand Press Association Limited
A
38.82%
38.82%
Restaurant Hub Limited
A
40%
40%
The Beacon Printing & Publishing Company Limited
A
21%
21%
The Gisborne Herald Company Limited (held through Essex
Castle Limited as a trust company for NZME Publishing Limited)
A
49%
49%
The Radio Bureau
B
50%
50%
The Wairoa Star Limited
A
40.41%
40.41%
Ratebroker Limited
A / D
50%
20%
The Newspaper Publishers Association of New Zealand Incorporated
C
-
-
New Zealand Press Council
C
-
-
Radio Broadcasters Association Incorporated
C
-
-
5.2 INTERESTS IN OTHER ENTITIES
5.2.1 Associates, joint ventures and joint operations
The Group has the following associates, joint ventures and joint operations:
(A) These entities are classified as joint ventures or associates. Because the effects of equity accounting are immaterial, these investments are carried at
cost. (B) The Radio Bureau is classified as a joint operation and the Group has included its direct right to the assets, liabilities, revenues and expenses of
joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses in these consolidated interim financial statements.
(C) These are bodies with which entities in the Group have memberships, but no ownership interest. (D) In January 2018, the Group acquired an
additional 30% of the shareholding in Ratebroker Limited from existing shareholders. The Group has joint control of Ratebroker Limited and classifies it as
a joint venture.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
3130
6.1 RELATED PARTIES
The Group purchased print services worth $1,510,000 (2017: $1,685,000) from Beacon Print Limited, a company in
which the Group holds a 21% interest in.
In November 2015, the Company, Stuff, TVNZ and MediaWorks launched a new local advertising exchange service,
KPEX Limited, offering media agencies and clients a programmatic option for purchasing online advertising. The Group
received advertising revenue of $1,595,000 (2017: $1,299,000) and paid commission of $225,000 (2017: $195,000).
During 2016, the Group acquired interests in certain joint ventures and associates. The Group has entered into
commitments to provide future services (such as house advertising, occupancy space at NZME offices, business
as usual finance and human resources support). During the period such services were provided to Eveve, valued at
$13,996 (2017:$13,996), Restaurant Hub, valued at $83,927 (2017:$22,770) and Ratebroker $53,435 (2017:$90,295). The
outstanding balances for future services are included in the table below.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
6.0 OTHER NOTES
JUNE 201
RECEIVABLES
$’000
DECEMBER 2017
RECEIVABLES
$’000
JUNE 2018
PAYABLES
$’000
DECEMBER 2017
PAYABLES
$’000
Balances with related party
KPEX Limited
646
1,028
92
148
Chinese New Zealand Herald Limited
-
-
20
43
Eveve New Zealand Limited
-
-
296
28
Restaurant Hub Limited
-
-
182
449
Ratebroker Limited
6
-
-
526
Total related party receivables and
payables
652
1,028
590
1,194
6.2 CONTINGENT LIABILITIES
The Group did not have any contingent liabilities as at 30 June 2018.
6.3 SUBSEQUENT EVENTS
Refer to note 1.4 for a description of events relating to the proposed merger with Fairfax New Zealand, note 4.1.2 for the
dividend and note 5.1 for a share-based payment transaction.
The Directors are not aware of any other material events subsequent to the balance sheet date.
3332
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Independent review report
To the Shareholders of NZME Limited
Report on the consolidated interim financial statements
We have reviewed the accompanying consolidated interim financial statements of NZME Limited (“the
Company”) and its controlled entities (“the Group”) on pages 12 to 32, which comprise the
consolidated interim balance sheet as at 30 June 2018, and the consolidated interim income
statement, the consolidated interim statement of comprehensive income, the consolidated interim
statement of changes in equity and the consolidated interim statement of cash flows for the period
ended on that date, and selected explanatory notes.
Directors’ responsibility for the consolidated interim financial statements
The Directors are responsible on behalf of the Group for the preparation and presentation of these
consolidated interim financial statements in accordance with the New Zealand Equivalent to
International Accounting Standard 34 Interim Financial Reporting (NZ IAS 34) and for such internal
controls as the Directors determine are necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
Our responsibility
Our responsibility is to express a conclusion on the accompanying consolidated interim financial
statements based on our review. We conducted our review in accordance with the New Zealand
Standard on Review Engagements 2410 Review of Financial Statements Performed by the
Independent Auditor of the Entity (NZ SRE 2410). NZ SRE 2410 requires us to conclude whether
anything has come to our attention that causes us to believe that the consolidated interim financial
statements, taken as a whole, are not prepared in all material respects, in accordance with NZ IAS 34.
As the auditors of the Company, NZ SRE 2410 requires that we comply with the ethical requirements
relevant to the audit of the annual financial statements.
A review of financial statements in accordance with NZ SRE 2410 is a limited assurance engagement.
The auditor performs procedures, primarily consisting of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures.
The procedures performed in a review are substantially less than those performed in an audit
conducted in accordance with International Standards on Auditing (New Zealand). Accordingly, we do
not express an audit opinion on these consolidated interim financial statements.
We are independent of the Group. Our firm carries out other services for the Group in the areas of
taxation compliance and taxation advisory services, advisory services in connection with treasury
policy, and other assurance services including payroll assurance services. The provision of these other
services has not impaired our independence.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that these
consolidated interim financial statements of the Group are not prepared, in all material respects, in
accordance with NZ IAS 34.
3332
PwC 34
Who we report to
This report is made solely to the Company’s Shareholders, as a body. Our review work has been
undertaken so that we might state to the Company’s Shareholders those matters which we are required
to state to them in our review report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Shareholders, as a body, for our
review procedures, for this report, or for the conclusion we have formed.
For and on behalf of:
Chartered Accountants Auckland
22 August 2018
3534
REGISTERED ADDRESS
NZME Limited
2 Graham St
Auckland 1010
New Zealand
REGISTERED OFFICE CONTACT DETAILS
POSTAL ADDRESS: Private Bag 92192
Victoria St West
Auckland 1142
New Zealand
PHONE: +64 9 397 5050
WEBSITE: www.nzme.co.nz
EMAIL: Investor_Relations@nzme.co.nz
AUDITORS
PricewaterhouseCoopers
PRINCIPAL BANKERS
Westpac
PRINCIPAL SOLICITORS
Chapman Tripp
SHARE REGISTRY
Link Market Services
SHARE REGISTRY CONTACT DETAILS
Inquiries about the Shares may be made to the Registrar:
WEBSITE: www.linkmarketservices.co.nz
EMAIL: enquiries@linkservices.co.nz
STREET ADDRESS: Level 11, Deloitte House,
80 Queen Street, Auckland
POSTAL ADDRESS: PO Box 91976,
Auckland 1142
Phone: 09 375 5998
Fax: 09 375 5990
DIRECTORY
3534
---
1
MEDIA RELEASE
23 August 2018
NZME LIMITED HALF YEAR 2018 FINANCIAL RESULTS
Investing for growth
NZME Limited (NZME) today reported financial results for the first half of 2018 that reflected
modest declines in revenue in a difficult market and an increased rate of investment in new
revenue streams.
H1 2018 highlights
Trading Revenue
1
declined 3% compared to H1 2017 to $185.7 million; market share
gains continued despite deteriorating economic factors.
Trading EBITDA
1
of $23.2 million, down 18% compared to H1 2017, impacted by $3.1
million investment in Digital Classifieds. Excluding the Digital Classifieds, trading costs
declined 2% and Trading EBITDA declined 7%.
Statutory NPAT declined 53% on H1 2017 to $3.7 million. Trading NPAT
1
of $5.5
million and Trading EPS
1
of 2.8 cents, both declined 44% on H1 2017.
Fully imputed half year dividend 2.0 cents; supplementary dividend for qualifying non-
resident shareholders.
NZME’s Chairman Peter Cullinane said, “Our underlying business continues to perform well in
challenging market conditions, providing us with the capacity to undertake a number of
exciting growth projects while still delivering returns to shareholders in the form of a 2.0 cent
fully imputed half year dividend”.
NZME’s audience of 3.3 million New Zealanders
2
represents almost 80% of the population.
The NZ Herald weekly brand audience grew 10%
3
on H1 2017 and engagement on
nzherald.co.nz, as measured by time spent per visit, increased 8.5%
4
. NZME’s Radio
audience was stable but the new Digital Classified portals, OneRoof, DRIVEN and YUDU,
enjoyed strong audience growth
4
.
NZME Chief Executive Michael Boggs said, “We were pleased, given difficult market
conditions, to keep our first half Trading Revenue within 3% of the same period last year.
This reflects ongoing share gains and continued strong growth in digital.”
Print advertising revenue was impacted by ongoing pressures in print advertising markets
exacerbated by weaker business and consumer confidence. Despite these challenges, NZME
experienced encouraging growth in readership and audience for its print mastheads. In
1
Trading measures are non-GAAP measures that are explained and reconciled in the NZME Half Year 2018 Results
Presentation dated 23 August 2018. Trading Revenue is presented on a consistent basis with 2017, and excludes the impact of
NZ IFRS 15 adjustments. Trading EBITDA excludes exceptional items of $2.5m.
2
Nielsen CMI May Fused Q2 17 to Q1 18 (population 10+ years).
3
Nielsen CMI Q2 17 – Q1 18 AP15+.
4
Nielsen Market Intelligence Domestic Traffic (1 Jan 18 – 30 June 18).
2
addition, nzherald.co.nz attracted more than 3.8 million unique browsers per month
5
, up 13%
on H1 2017 and up 5% on 2H 2017. Mobile audience comprised almost 75% of total
audience, up from 60% last year
5
.
Radio trends also remain encouraging. NZME continues to pursue the best offer in the market
to inform, entertain and attract our audience. A number of talent enhancements in the first
half of 2018 supported this objective, including a new drive show on ZM and a new breakfast
show on Coast.
Digital advertising revenue continues to grow across all products, again outperforming
industry growth rates. Display and mobile revenue grew 20% in the March 2018 quarter
compared to industry growth estimated at 13%
6
.
“While we are broadly satisfied with our revenue performance, our earnings were lower partly
due to our strategy to increase spending in specific areas to pursue medium term growth.
These investments are integral to achieving our medium term growth objectives.
NZME’s three digital classifieds platforms: OneRoof, DRIVEN and YUDU, launched in March
2018. Listings and audience growth has been highly encouraging, confirming the value of
NZME’s unrivalled audience reach through its multi-platform operations.
In keeping with our strategy to grow new revenue streams, NZME will deliver paid content
capability for its digital mastheads in the second half of 2018. NZME will adopt the
“freemium” model with day-to-day news and current affairs provided free of charge and
premium in-depth analysis and opinion available on subscription.
NZME and Fairfax appealed the High Court’s adverse ruling on the Stuff Limited (previously
Fairfax New Zealand)/NZME merger in H1 2018, with a judgment expected in the second
half.
Outlook
In the first half of this year, advertising revenue (excluding the impact of adopting NZ IFRS
15) declined 4% on the same period last year. Advertising bookings for Q3 are consistent
with the H1 result, down 4% year-on-year. NZME continues to hold or increase its share of
the addressable NZ advertising market. However, agency advertising spend remains
challenged and softening economic conditions have the potential to weaken or delay
advertising revenue in the second half of 2018.
The benefit of cost initiatives implemented late in the first half of 2018 are expected to be
reflected in the second half, although the rate of cost reduction is slowing. NZME will continue
to invest in our Digital Classified platforms to add new future revenue streams.
Supported by revenue retention in the existing business, and the development of new
revenue streams, NZME’s goal remains to achieve overall revenue and EBITDA growth in the
medium term. However, near term will reflect the softened advertising market and the
ongoing investment in Digital Classifieds.
5
Nielsen Market Intelligence Domestic Traffic 2017-2018.
6
IAB / PWC New Zealand Q1 2018 Interactive Advertising Spend Report; digital excluding classifieds, search and directories,
and social media (NZ market only).
3
NZME’s strategy is based on a three horizon model, focusing on: (1) optimising core
businesses; (2) growing new revenue streams that leverage existing audience and customer
relationships; and (3) re-imagining revenue models that address unmet customer needs.
NZME has six priority areas of focus for the current year to enhance shareholder value:
1. Grow audience and engagement through amplification of NZME’s brands and
increased focus on planned, unique, local and premium content, supported by
technology implementation;
2. Return advertising revenue to growth by retaining print revenues, driving digital
revenue growth and capitalising on radio coverage, content and talent enhancements;
3. Effective cost and capital management through improving and leveraging our fixed
cost base; continued focus on balance sheet and shareholder returns;
4. Engage and develop our people through leadership and talent succession planning;
5. Grow new revenue streams through the development of OneRoof, DRIVEN and YUDU,
improved data monetisation, developing a paid content proposition and identifying
new business models; and
6. Progress the Stuff merger to further improve our efficiency and underwrite the
competitiveness of New Zealand content generation and delivery.
NZME will continue to work hard in these areas and looks forward to updating shareholders
on progress.
All H1 2018 results materials can be found at:
www.nzx.com/markets/NZSX/securities/NZM/announcements
ENDS
For further information:
Michael Boggs
Chief Executive Officer
T: +64 9 367 6123
Email: Michael.Boggs@nzme.co.nz
Alexa Preston
Head of Investor Relations & Corporate Finance
T: +64 21 997 902
Email: alexa.preston@nzme.co.nz
Briefing Audio Recording:
There will be an audio recording of the full year results briefing, to be held at 10:00 a.m. NZT
on Thursday, 23 August 2018, including Q&A, made available later in the day at
www.nzme.co.nz/investor-relations/presentations-webcasts
4
About NZME
NZME is a leading New Zealand media and entertainment business that reaches more than
3.3 million kiwis
7
. Whether reading, listening or watching, our audience gets the content they
want - where and when they want it. NZME offers advertisers a unique opportunity to access
its growing audience via a fully integrated multi-platform presence. NZME is listed on the NZX
Main Board (code NZM) with a foreign exempt listing on the ASX (code NZM).
7
Nielsen CMI Fused Q2 17 to Q1 18 (population 10+ years).
---
1
NZX/ASX RELEASE
23 August 2018
NZME Limited results for the half year ended 30 June 2018
H1 2018 highlights
Trading Revenue
1
declined 3% compared to H1 2017 to $185.7 million.
Trading EBITDA
1
of $23.2 million, down 18% compared to H1 2017.
Operating costs for new Digital Classifieds of $3.1 million for the half.
Excluding Digital Classifieds, trading costs declined 2% and EBITDA declined 7% on
H1 2017.
Statutory NPAT declined 53% on H1 2017 to $3.7 million.
Trading NPAT
1
of $5.5 million and Trading EPS
1
of 2.8 cents, compared to $9.9 million
and 5.0 cents respectively in H1 2017.
Fully imputed half year dividend 2.0 cents, supplementary dividend for qualifying non-
resident shareholders.
Audience of 3.3 million
2
represents almost 80% of the population.
Advertising revenue impacted by declining business confidence.
Strong audience growth in Digital Classifieds – OneRoof, DRIVEN and YUDU.
Continue to match or outperform market across all channels
3
.
Digital revenue growth of 17% on H1 2017.
On track to deliver paid content capability on nzherald.co.nz by end of H2.
Stuff Limited merger appeal judgement expected in H2.
Financial summary
$m H1 2018 H1 2017 % Change
Trading Revenue
1
185.7 191.0 (3%)
Costs (162.5) (162.8) 0%
Trading EBITDA
1
23.2 28.2 (18%)
Trading NPAT
1
5.5 9.9 (44%)
Statutory NPAT 3.7 7.8 (53%)
Half Year Dividend (cps) 2.0 3.5 (43%)
1
Trading measures are non-GAAP measures that are explained and reconciled in NZME Half Year 2018 Results Presentation
dated 23 August 2018. Trading Revenue is presented on a consistent basis with 2017, and excludes the impact of NZ IFRS 15
adjustments. Trading EBITDA excludes exceptional items of $2.5m.
2
Nielsen CMI May Fused Q2 17 to Q1 18 (population 10+ years).
3
IAB / PWC New Zealand Q1 2018 Interactive Advertising Spend Report; digital excluding search and directories, and social
media (NZ market only), SMI New Zealand Agency Advertising Expenditure Report June 2018.
2
Half year summary
NZME Limited (NZME) today reported financial results for the first half of 2018 that reflected
modest declines in revenue in a difficult market and an increased rate of investment in new
revenue streams that impacted costs and profitability.
Trading Revenue
4
declined 3% compared to H1 2017 as ongoing pressure on print advertising
revenues was not entirely offset by market share gains and strong digital revenue growth.
Trading EBITDA
4
decreased 18% on H1 2017. Total Trading costs were stable on H1 2017
with $3.4 million of efficiency improvements being partly offset by $3.1 million of additional
costs associated with the new Digital Classifieds – OneRoof, YUDU and DRIVEN. Excluding the
additional costs for the Digital Classifieds, underlying costs declined 2% and underlying
EBITDA declined 7%.
NZME’s audience of 3.3 million New Zealanders
5
represents almost 80% of the New Zealand
population. The NZ Herald weekly brand audience grew 10%
6
on H1 2017 and engagement
on nzherald.co.nz, as measured by time spent per visit, grew 8.5%
7
. NZME’s Radio audience
is stable. The new Digital Classified portals enjoyed strong audience growth.
5
Net debt was $106.1 million at 30 June 2018, up from $90.2 million at 31 December 2017
but little changed on 30 June 2017. Net cash flow was impacted by the timing of 2017 tax
payments. Capital expenditure was $7.1 million in H1 2018, compared to $6.8 million in H1
2017. Gearing and liquidity ratios are sound and NZME retains undrawn bank facilities of
$41.2 million.
Statutory NPAT declined 53% on H1 2017 to $3.7 million and Statutory EPS declined to 1.9
cents. Trading NPAT
4
of $5.5 million and Trading EPS
4
of 2.8 cents were 44% lower than H1
2017.
The half year dividend of 2.0 cents per share reflects lower earnings available for distribution,
partly due to investment in the Digital Classifieds. The fully imputed dividend is scheduled for
payment on 26 October 2018, for shareholders on the register at 16 October 2018. A
supplementary dividend will be paid to qualifying non-resident shareholders.
Print
Print revenue declined 6% to $103.6 million in H1 2018 compared to H1 2017. Print remains
NZME’s largest revenue segment, representing 56% of total NZME Trading Revenue
4
,
comprising of Print advertising revenue (30% of Trading Revenue
4
), Print circulation revenue
(22%) and other Print revenue sources (4%).
Print advertising revenue declined by 8% in H1 2018, impacted by ongoing deterioration in
print advertising markets and exacerbated by deteriorating business and consumer
4
Trading measures are non-GAAP measures that are explained and reconciled in NZME Half Year 2018 Results Presentation
dated 23 August 2018. Trading Revenue is presented on a consistent basis with 2017, and excludes the impact of NZ IFRS 15
adjustments. Trading EBITDA excludes exceptional items of $2.5m.
5
Nielsen Market Intelligence Domestic Traffic (1 Jan 18 – 30 June 18).
6
Nielsen CMI Q2 17 – Q1 18 AP15+.
7
Nielsen Market Intelligence Domestic Traffic (1 Jan 18 – 30 June 18).
3
confidence. Despite these challenges, NZME experienced encouraging growth in readership
and audience for its print mastheads.
Circulation revenue declined 4% in H1 2018. Circulation volume declined 5% on H1 2017,
compared to an estimated 8% decline in industry circulation. Improved yield through cover
price increases has supported revenue in the face of declining circulation. Further price
increases were implemented on 1 July 2018.
Other Print revenue, relating to printing and distribution services provided to external parties
decreased 9% year on year, due to lower third party circulation volume.
The New Zealand Herald’s average issue readership has been growing and the Herald on
Sunday remains the most-read and highest-selling Sunday Newspaper in the country
8
.
The NZ Herald’s daily brand audience, which includes digital, remained above 1 million in H1
2018
9
, reflecting the strength of the NZ Herald brand and NZME’s success in growing
audience reach.
Radio and Experiential
Radio and Experiential revenue of $48.8 million in H1 2018 was 3% lower than in H1 2017,
an improvement on the 6% decline in H1 2017. Direct revenue, which had been more
challenging for NZME, showed positive trends in H1 2018. However, agency revenue growth
slowed in H1 2018 due to weakness in the agency market, as a result of economic factors
such as the decline in business and consumer confidence.
A number of initiatives implemented in the last 12 months supported the improvement in
direct revenue, including completion of a nationwide sales team transformation, with all direct
frontline staff now equipped to sell radio, and implementation of a new targeted incentive
scheme.
NZME continues to work to ensure it has the best offer in the market to inform, entertain and
attract. A number of talent enhancements in the first half of 2018 supported this objective,
including a new drive show on ZM and a new breakfast show on Coast, with benefits
anticipated over the next 12 to 18 months.
Audience in the 18 to 54 year old demographic declined in H1 2018 from the peak in mid-
2017 but NZME’s leading brands maintained their strong presence. Newstalk ZB remained the
number one radio station in New Zealand.
In digital radio, iHeart Radio grew its registered users by 24% over the past year to more
than 782,000
10
and average monthly streams grew 159% year on year to 18.2 million
11
.
The focus continues on NZME’s strong brands to grow audience and support consistent radio
revenue growth.
8
Nielsen CMI, NZ Herald AIR trend Q2 2017 – Q1 2018 AP15+
9
Nielsen CMI Q2 17 – Q1 18 AP15+.
10
iHeartMedia, 2017- 2018; Adobe Analytics, 2018.
11
AdsWizz and StreamGuys, 2017-2018.
4
Digital and e-Commerce
Digital revenue growth remained strong with 17% growth on H1 2017 to $23.9 million.
Digital & e-Commerce revenue now represents 16% of Trading Revenue, up from 14% a year
earlier and 12% in H1 2016. Digital revenue growth in H1 2018 offset approximately 70% of
the decline in print advertising revenue.
NZME saw digital advertising revenue grow across all products and continues to outperform
industry growth rates. Display and mobile revenue grew 20% in the March 2018 quarter
compared to industry growth estimated at 13%
12
.
The largest drivers of this growth are mobile, video and programmatic products, with native
video streams across all sites growing 6% year on year
13
to more than 2 million views per
week.
NZME has also leveraged the Washington Post ARC software suite to enhance content
management by creating a user-centric experience to grow and engage audiences.
nzherald.co.nz attracted more than 3.8 million unique browsers per month
14
, up 13% on H1
2017 and up 5% on 2H 2017. Mobile audience comprised almost 75% of total audience, up
from 60% last year
14
.
GrabOne, or e-Commerce, revenue declined 8% in H1 2018 on H1 2017, an improvement
from a decline of 18% in FY17. GrabOne revenue is anticipated to stabilise, driven by
improved traffic and deal relevancy targeting.
Investing for the future
Developing new revenue streams to offset structural decline in some advertising markets
remains a priority. NZME’s growth initiatives in H1 2018 were:
1. Development of Digital Classifieds portals, OneRoof, DRIVEN and YUDU; and
2. Progressing paid subscription capability on key digital mastheads
Digital Classifieds
NZME’s three Digital Classifieds: OneRoof, DRIVEN and YUDU, launched in March 2018. A
number of competitive advantages support these propositions, including:
access to an audience of over 3.3 million New Zealanders
15
;
leveraging NZME’s core content capabilities across text, video and audio;
utilising NZME’s data insight and analytic capabilities; and
taking advantage of cross-channel bundling opportunities.
12
IAB / PWC New Zealand Q1 2018 Interactive Advertising Spend Report; digital excluding search and directories, and social
media (NZ market only).
13
Brightcove Analytics 2017 – 2018. Native = viewed on an NZME platform.
14
Nielsen Market Intelligence Domestic Traffic 2017-2018.
15
Nielsen CMI Fused Q2 17 to Q1 18 (population 10+ years).
5
Each platform has been built with the aim of providing an innovative user experience unlike
any other in the market. NZME is able capitalise on strong industry relationships, having been
a key player in these markets through other channels.
Business as usual operating costs of $3.1 million were incurred in H1 2018, mainly in the
areas of people, marketing, data and technology licensing. Listings and audience growth has
been highly encouraging in the early stages, confirming the value of NZME’s unrivalled
audience reach through its multi-platform operations.
Property portal OneRoof has achieved approximately 50% of the total market of ‘for sale’
listings, with three out of the top five major national real estate agencies on board and a
fourth recently signed. OneRoof is targeting 75% of market listings by December 2018.
Audience growth has been strong supported by co-branding with Herald Homes and a robust
marketing campaign.
Motoring classified website DRIVEN was relaunched in March 2018 and will add unique tools
for buyers and sellers in the second half. The site utilises video and native content, with the
aim of becoming “the only place you need to go for everything motoring”. DRIVEN currently
has approximately 60% of all dealer listings in New Zealand. Audience growth has been
strong supported by leveraging NZ Herald online audience with cross promotion.
Employment listing website YUDU was also launched in March 2018, achieving 33% of the
total job market listings. YUDU is a hub of news, tips, advice, trends and insights, supported
by our strong content capabilities, to equip job seekers for the age of job evolution and
disruption. YUDU allows businesses to showcase their values, culture, and career
opportunities via NZME’s unique multi-platform media network. Strong audience growth has
also been supported by leveraging the NZ Herald online audience.
Revenue from these businesses will be seen gradually over time and it will lag costs. While
the medium-term opportunity for these platforms is appealing, the market is competitive and
financial expectations in the initial phase of operation remain modest.
Monetising digital content through ‘freemium’ model
In line with the strategy to leverage our audience reach and brand strength to grow new
revenue streams, NZME intends to deliver paid content capability on its digital mastheads in
the second half of 2018.
Audience willingness to pay for digital content has increased significantly in recent years.
NZME will adopt the “freemium” model with day-to-day news and current affairs provided
free of charge and in-depth analysis and opinion available on subscription.
The partnership with Washington Post has enabled NZME to tailor content and enhance the
personalisation of the Herald online experience. In H1 2018, NZME invested in premium and
in-depth journalism and utilised data to target content and lift user engagement by 8.5% as
measured by Average Site Duration.
Over the second half of this year NZME will introduce a “freemium” model for local premium
content as well as global syndicated content. A key focus will be on enhancing user
experience and offering subscription bundles for print and online content that provide value
to customers.
6
Capital management
The company has a prudent and sustainable capital structure with net debt as at 30 June
2018 of $106.1 million, stable on H1 2017. Operating cash flow was healthy during the half
but the timing of tax payments impacted net cash flow and increased net debt from 31
December 2017.
The balance sheet remains strong with 12 month Trading EBITDA to interest cover of 14.5
times and net debt to 12 month Trading EBITDA of 1.7 times.
The fully imputed 2.0 cent per share half year dividend reflects lower available profits for
distribution.
The Board has appointed an external adviser to provide advice on capital management and to
assist us with refinancing these debt facilities. Part of that advice will involve reviewing our
capital structure and dividend policy.
Stuff merger
On 7 February 2018, NZME and Fairfax announced their intention to appeal the High Court’s
adverse ruling on the Stuff Limited (previously Fairfax New Zealand)/NZME merger. The
matter was heard in the Court of Appeal in H1 2018, with a judgment expected in the second
half.
Board
Barbara Chapman and Sussan Turner were appointed as Independent Directors during the
half, which has brought the immediate process of Board Renewal to a conclusion. The Board
comprises five directors with a strong mix of experience and skills to support the
development and implementation of strategy.
Outlook
In the first half of this year, advertising revenue declined 4% on the same period last year.
Advertising bookings for Q3 are consistent with the H1 result, down 4% year on year. NZME
continues to increase or maintain its share of the addressable NZ advertising market. Agency
advertising spend remains challenged and softening economic conditions have the potential
to weaken or delay advertising revenue in the second half of 2018.
The benefit of cost initiatives implemented in the first half of 2018 are expected to be
reflected in the second half, although the rate of cost reduction is slowing and is not expected
to be sufficient to offset softening advertising revenue in the underlying business. In
addition, we will continue to invest in our Digital Classifieds to create future revenue and
shareholder value. These businesses will incur ongoing business as usual costs.
Supported by revenue retention in the existing business, and the development of new
revenue streams, NZME’s goal remains to achieve overall revenue and EBITDA growth in the
medium term.
However, full year EBITDA will reflect underlying business decline and investment in Digital
Classifieds.
7
Strategy
NZME’s strategy is based on a three horizon model, focusing on: (1) optimising core
businesses; (2) growing new revenue streams that leverage existing audience and customer
relationships; and (3) re-imagining revenue models that address unmet customer needs.
NZME has six priority areas of focus for the current year to enhance shareholder value:
1. Grow audience and engagement through amplification of NZME’s brands and
increased focus on planned, unique, local and premium content, supported by
technology implementation;
2. Return advertising revenue to growth by retaining print revenues, driving digital
revenue growth and capitalising on radio coverage, content and talent enhancements;
3. Effective cost and capital management through improving and leveraging our fixed
cost base; continued focus on balance sheet and shareholder returns;
4. Engage and develop our people through leadership and talent succession planning;
5. Grow new revenue streams through the development of OneRoof, DRIVEN and YUDU
and improved data monetisation, developing a paid content proposition and
identifying new business models; and
6. Progress the Stuff merger to further improve our efficiency and underwrite the
competitiveness of New Zealand content generation and delivery.
NZME will continue to work hard in these areas and looks forward to updating shareholders
on progress.
All H1 2018 results materials can be found at:
www.nzx.com/markets/NZSX/securities/NZM/announcements
ENDS
For further information:
Michael Boggs
Chief Executive Officer
T: +64 9 367 6123
Email: Michael.Boggs@nzme.co.nz
Alexa Preston
Head of Investor Relations & Corporate Finance
T: +64 21 997 902
Email: alexa.preston@nzme.co.nz
Briefing Audio Recording:
There will be an audio recording of the full year results briefing, to be held at 10:00 a.m. NZT
on Thursday, 23 August 2018, including Q&A, made available later in the day at
www.nzme.co.nz/investor-relations/presentations-webcasts
8
About NZME
NZME is a leading New Zealand media and entertainment business that reaches more than
3.3 million kiwis
16
. Whether reading, listening or watching, our audience gets the content
they want - where and when they want it. NZME offers advertisers a unique opportunity to
access its growing audience via a fully integrated multi-platform presence. NZME is listed on
the NZX Main Board (code NZM) with a foreign exempt listing on the ASX (code NZM).
16
Nielsen CMI Fused Q2 17 to Q1 18 (population 10+ years).
---
Half Year 2018
Results Presentation
For the six months ended 30 June 2018
23 August 2018
Page
2
DISCLAIMER
The information in this presentation is of a general nature and does not constitute financial product advice,
investment advice or any recommendation. Nothing in this presentation constitutes legal, financial, tax
or other advice. This presentation constitutes summary information only, and you should not rely on it in
isolation from the full detail set out in the Consolidated Interim Financial Statements.
This presentation may contain projections or forward-looking
statements regarding a variety of items. Such projections or
forward-looking statements are based on current expectations,
estimates and assumptions and are subject to a number of
risks and uncertainties. There is no assurance that results
contemplated in any projections or forward looking statements
in this presentation will be realised. Actual results may differ
materially from those projected in this presentation.
No person is under any obligation to update this presentation
at any time after its release to you or to provide you with
further information about NZME Limited.
A number of unaudited non-GAAP financial measures are used
in this presentation, which are outlined in the supplementary
information to the presentation. The Group adopted NZ IFRS 15
–
Revenue from Contracts with Customers on 1 January 2018
without restating the H1 17 comparatives. Trading Revenue
as stated throughout this presentation refers to revenue prior
to adjustments for the adoption of NZ IFRS 15. Please refer to
note 2.1.1 of the Consolidated Interim Financial Statements for
the period ended 30 June 2018 and pages 30 to 31 for a more
detailed reconciliation. You should not consider any of these in
isolation from, or as a substitute for, the information provided
in the unaudited Consolidated Interim Financial Statements for
the six months ended 30 June 2018.
While reasonable care has been taken in compiling this
presentation, none of NZME Limited nor its subsidiaries,
directors, employees, agents or advisers (to the maximum
extent permitted by law) gives any warranty or representation
(express or implied) as to the accuracy, completeness or
reliability of the information contained in it nor takes any
responsibility for it. The information in this presentation has not
been and will not be independently verified or audited.
Page
3
05H1 18 Results Summary
07Operational Priorities
08Channel Results
15Digital Classifieds
19Monetising Our Content
21H1 18 Financials
26Outlook
28Q&A
29Supplementary Information
AGENDA
Page
4
NZME REACHES 80%
1
OF NEW ZEALANDERS
1
Nielsen CMI May Fused Q2 17 - Q1 18 (population 10+ years)
2
GfK Radio Audience Measurement, Commercial Stations, NZME and Partners. Cumulative Audience T2 2018.
C
A
P
A
B
I
L
I
T
I
E
S
C
O
R
E
C
O
N
T
E
N
T
+
C
H
A
N
N
E
L
S
RADIO
SPORT
NATIVE
CONTENT
EXPERIENTIAL
EVENTS
DIGITAL
MARKETING
SERVICES
BRAND
ENGAGEMENT
DIGITAL
PRINT
ENT.
NEWS
CREATIVE
CONTENT
CREATION
DIGITAL
CLASSIFIEDS
MARKETPLACES
DATA &
INSIGHTS
VIDEO &
PRODUCTION
AUDIENCE
TARGETING
STRATEGY
& PLANNING
CHINESENZHERAL
D.C
O.NZ
1.3
PRINT
weekly readers
1
Million
RADIO
2.0
weekly listeners
2
2.4
per month
1
DIGITAL
Unique audience of
Million
Million
EVERY MINUTE, EVERY HOUR, EVERY DAY...
Page
5
NZME H1 18 RESULTS SUMMARY
1
Trading measures are non-GAAP measures that are explained and reconciled in the supplementary information on pages 30-31.
2
A supplementary dividend of
0.3529 cents per share will be payable to shareholders who are not tax resident in New Zealand and who hold less than 10% of the shares in NZME Limited.
3
H1 17
Trading revenue includes other income.
Statutory NPAT
$3.7m
H1 17 $7.8m
53%
Trading EBITDA1
$23.2m
H1 17 $28.2m
18%
Trading Revenue1
$185.7m
H1 17 $191.0m
3
3%
Interim Dividend
Fully Imputed
2.0cps
2
Scheduled for payment on
26 October 2018
Page
6
NZME INVESTING FOR THE FUTURE
$m
H1 18
Trading
1
H1 17
Trading
1
% Change
Trading Revenue185.7191.0(3%)
Total Costs excluding Digital Classifieds Costs
2
(159.4)(162.8)(2%)
EBITDA from underlying business26.328.2(7%)
Costs associated with Digital Classifieds(3.1)-
Trading EBITDA23.228.2(18%)
•Trading revenue declined just 3%
in H1 18 compared to H1 17 reflecting
continuation of industry headwinds,
to a degree moderated by ongoing market
share gains and strong digital growth.
•Excluding the investment in the Digital
Classified platforms, underlying EBITDA
declined $1.9m in H1 18 vs H1 17.
•Focus on business efficiency contributed
to a $3.4m reduction in underlying costs.
•In line with the strategy to develop and
grow new revenue streams three new Digital
Classified businesses were launched in March
2018 incurring costs of $3.1m. The majority of
this investment has been in people, marketing,
data and technology licensing.
•We are still early days for these platforms,
but encouraged by operational progress and
audience growth.
1
Trading measures are non-GAAP measures that are explained and reconciled in the supplementary information on pages 30-31.
2
Total Costs excluding Digital Classifieds
Costs is a non-GAAP measure that shows the Trading Costs for H1 18 of $162.5m (as reconciled on page 30) less the Costs associated with the Digital Classified platforms
launched in H1 18. For H1 17, these costs are the same as Trading Costs as reconciled on page 31.
Page
7
Continued audience
growth and engagement
•Total audience 3.3m
•10% YoY growth in NZ Herald weekly brand audience
1
and 8.5% increase in engagement
on nzherald.co.nz
2
•Radio audience stable
•Strong audience growth in the new Digital Classifieds
Return advertising revenue
to growth
•Advertising revenue in H1 impacted by declining business confidence
•Increasing or maintaining share across all channels in all measurable markets
•Digital revenue growth offset ~70% of the print advertising decline in H1
•Improved trends in radio revenue
Effective cost and capital
management
•$3.4m decrease in costs
3
•Cost out initiatives in H1 will benefit H2 performance
Develop our talent and
people
•New prime time shows launched on ZM (“Bree & Clint” Drive show)
and Coast (“Jase & Bernie” Breakfast show)
•Building the profile of journalists ahead of paid content launch
•Board renewal completed - two new directors appointed
Grow new revenue streams
•$3.1m opex invested in launching three new Digital Classifieds
•Initial reception and engagement positive, but still early days
•Paid subscription capability on nzherald.co.nz on track for end of H2
Stuff Merger
•Appeal heard in Court of Appeal in June 2018. Judgement expected in H2
NZME H1 18 OPERATIONAL PRIORITIES
1
Nielsen CMI Q2 17 – Q1 18 AP 15+. 2Nielsen Market Intelligence, Domestic Traffic, 2018.
3
Trading Costs excluding Digital Classifieds Costs.
CHANNEL
RESULTS
Page
8
Page
9
1
IAB / PwC New Zealand Q1 2018 Interactive Advertising Spend Report; digital excluding search and directories, and social media (NZ market only).
2
SMI New Zealand Agency
Advertising Expenditure Report June 2018. 3Faifax Media Limited Full Year 2018 and Half Year 2017 Reports.
NZME H1 18 MARKET COMPARABLES
MAINTAINING OR GROWING ACROSS ALL CHANNELS
Print
Radio & Experiential
Digital & e-Commerce
16%
H1 17 14%
28%
H1 17 28%
56%
H1 17 58%
Print
NZME Ad Revenue -8%
YoY in H1 18
Stuff Ad Revenue -20%3
YoY H1 18 comparative
NZME Circulation -4%
Revenue
YoY H1 18
Stuff Circulation -8%3
Revenue
YoY H1 18 comparative
NZME > Market
Digital &
e-Commerce
NZME > Market
Display & Mobile Revenue
NZME +20%
YoY to Q1 18
Market
YoY to Q1 18
NZME = Market
Radio &
Experiential
Agency Revenue
NZME Flat
YoY in H1 18
Market Flat
2
YoY in H1 18
+13%
1
Page
10
NZME PRINT
NZME Print Revenue ($m)
H1 18H1 17% Change
Advertising Revenue55.560.2(8%)
Circulation Revenue40.441.9(4%)
Other Revenue
1
7.78.4(9%)
Total Print Revenue103.6110.6(6%)
•Print advertising revenue continues to decline
at historical rates.
•Growth continues in readership and audience.
•Circulation volume decline has been largely
offset by increases in yield. Cover price increase
implemented across all titles on 1 July 2018.
•Other revenue includes printing and distribution
services provided to Stuff NZ and other third
parties.
1
Other Revenue consists of External printing & distribution revenue of $4.3m (H1 17: $4.6m) and Other revenue of $3.4m (H1 17: $3.8m) as disclosed in note 2.1 of
the Consolidated Interim Financial Statements for the period ended 30 June 2018.
Page
11
The NZ Herald Mon-Sat Average
Issue Readership
1
NZ Herald Daily Brand Audience
3
NZ HERALD AUDIENCE GROWING,
SUBSCRIBER REVENUES STABLE
1
Nielsen CMI Q2 2017 – Q1 2018, NZ Herald AIR trend, AP15+
2
Subscriber volume drives revenue and represents the count of individual “paid” papers delivered, including
the NZ Herald, Herald on Sunday and Regionals (includes paid trials). Subscriber yield includes promotional volumes.
3
Nielsen CMI Q2 17 – Q1 18, AP15+.
1100
1050
1000
950
900
850
800
750
700
650
600
Daily Brand Audience (000s)
Q3 15 - Q2 16
Q4 15 - Q3 16
Q1 16 - Q4 16
Q2 16 - Q1 17
Q3 16 - Q2 17
Q4 16 - Q3 17
Q1 17 - Q4 17
Q2 17 - Q1 18
NZME Subscriber Volume and Yield
2
Yield ($)
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
1.90
1.80
1.70
1.60
1.50
1.40
1.30
1.20
1.10
1.00
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
Q1 18
Q2 18
Subscriber Volume (millions)
Subscriber VolumeYield
490
470
450
430
410
390
370
350
Readership (000s)
Q2 13 - Q1 14
Q4 13 - Q3 14
Q2 14 - Q1 15
Q4 14 - Q3 15
Q2 15 - Q1 16
Q4 15 - Q3 16
Q2 16 - Q1 17
Q4 16 - Q3 17
Q2 17 - Q1 18
Page
12
NZME RADIO & EXPERIENTIAL
•Radio and experiential revenue declined just
3% after being down 5% in FY17 and
6% in the first half of last year.
•Focus for H2 on continuing the positive
momentum in radio revenue.
•Audience is down slightly in the key 18-54
y/o demographic, from our peak a year ago.
Newstalk ZB remains #1 radio station in NZ.
•iHeart Radio registered users up 24% YoY to
more than 782,000
4
and average monthly
streams up 159% YoY to 18.2 million.
5
NZME Radio & Experiential Revenue ($m)
H1 18
Trading
1
H1 17
Trading
1
% Change
Radio & Experiential Revenue48.850.4(3%)
Other Revenue (inc. iHeart and Events)2.22.11%
Total Radio & Experiential Revenue51.052.6(3%)
1
Trading measures are non-GAAP measures that are explained and reconciled in the supplementary information on pages 30-31.
2
Previous corresponding period.
3
GfK Radio
Audience Measurement, Commercial Stations. NZME & Partners in Major Markets Trended to T2/2018. Station Share %. Mon-Sun 12mn-12mn, 18-54.
4
iHeartMedia, 2017-2018;
Adobe Analytics, 2018.
5
AdsWizz and StreamGuys, 2017-2018.
Change in Radio Revenue % of pcp
2
1%
0%
-1%
-2%
-3%
-4%
-5%
-6%
-7 %
-8%
Q1 17
Q2 17
Q3 17
Q4 17
Q1 18
Q2 18
NZME Major Markets 18-54 y/o
Station Share
3
T1 2016
T2 2016
T3 2016
T1 2017
T2 2017
T3 2017
T4 2017
T1 2018
T2 2018
42
37
32
27
22
17
12
Station Share (%)
Page
13
91.0
BREE
CLINT
4PM-7PM
INTRODUCING
Page
14
NZME DIGITAL & E-COMMERCE
•Digital advertising revenue grew across
all products, outperforming the market.
•Washington Post ARC platform has enabled
improved audience analytics and monetisation.
•Native video delivered 6% YoY growth across
all sites to more than 2 million views per week
2
.
•Digital revenue growth in H1 offset ~70%
of the decline in print advertising revenue.
•nzherald.co.nz continues to attract more than
3.8 million unique browsers per month with
mobile audience comprising almost 75% of
total audience, up from 60% last year
3
.
•GrabOne (e-Commerce) revenues stabilising,
reflecting change of model, improved traffic
and email personalisation.
NZME Digital & e-Commerce Revenue ($m)H1 18 H1 17 % Change
Digital Revenue
4
23.920.517%
e-Commerce Revenue 5.05.5(8%)
Total Digital & e-Commerce Revenue29.026.012%
1
Nielsen Market Intelligence Average Weekly UB’s 2017 – 2018.
2
Bright cove analytics, 2017-2018. Native = viewed on an NZME platform.
3
Nielsen Market Intelligence, Domestic
Traffic, 2017-2018.
4
Digital revenue consists of Advertising revenue of $20m (H1 17: $19.4m) and Other revenue of $3.9m (H1 17: $1.1m) as disclosed in note 2.1.1 of the
Consolidated Interim Financial Statements for the period ended 30 June 2018.
3.9
3.8
3.7
3.6
3.5
3.4
3.3
3.2
3.1
3.0
Q1 17
Q2 17
Q3 17
Q4 17
Q1 18
Q2 18
nzherald.co.nz Average Weekly
Unique Browsers
1
Average (Millions)
Page
15
GET MORE THAN A JOB AT
.co.nz
WE’RE HERE TO
LAUNCH CAREERS
SO WE GOT A
MICROBIOLOGIST
TO LAUNCH US
NME0030 GrowIt Digi Screen 540x540px_V4.indd 127/03/18 10:14 AM
• Needs based search
• Integrated data insights
• Lead generation for agents
• Unique tools for buyers
and sellers
• Targets active and passive
candidates
• Championing the candidate
DIGITAL CLASSIFIEDS
Page
16
AUDIENCE
•Strong audience growth since launch, supported by extensive
brand advertising
•Currently reaching ~65% of realestate.co.nz audience
OneRoof Weekly Unique Browsers
2
Mar 18
Apr 18
May 18
Jun 18
500
450
400
350
300
250
200
150
100
50
-
Weekly Unique Browsers (000s)
Homes.co.nzOneRoof.co.nzrealestate.co.nztrademe.co.nz/property
REVENUE
OPPORTUNITIES
•Premium listings
•Branded content
•Sponsorship
•Bundled cross-channel packages
•Agent subscriptions
•Agent profiles
LISTINGS
•Launched March 20181
•Currently ~50% of the total market 'for sale' listings on site
•3 out of 5 major agency groups now on site
•4th to go live in Q3
•Targeting 75% of the 'for sale' market by December 2018
OneRoof Listings as a % of Total "For Sale" Listings
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Apr 18
May 18
Jun 18
Jul 18
Sep 18
Dec 18
4th
Agency
Area of
Focus
1
OneRoof is a joint venture between NZME (80% share) and the developer of the platform (20% share). The entity is fully consolidated in the NZME Consolidated Interim Financial
Statements.
2
Nielsen Market Intelligence, Domestic Traffic (1 Jan 18 - 30 June 18).
LISTINGS
+AUDIENCE
REVENUE
Page
17
Page
18
DRIVEN Weekly Unique Browsers
1
•Relaunched site in March 2018
•H2 focus on launching unique tools
for buyers and sellers
•Currently have ~60% of all dealer
listings in New Zealand
•DRIVEN audience has increased
from 6% to ~20% of Trademe Motors'
audience
LISTINGS
AUDIENCE
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
Jan 18
Feb 18
Mar 18
Apr 18
May 18
Jun 18
1
Nielsen Market Intelligence, Domestic Traffic (1 Jan 18 - 30 June 18).
YUDU Weekly Unique Browsers
1
GET MORE THAN A JOB AT
.co.nz
WE’RE HERE TO
LAUNCH CAREERS
SO WE GOT A
MICROBIOLOGIST
TO LAUNCH US
NME0030 GrowIt Digi Screen 540x540px_V4.indd 127/03/18 10:14 AM
•Launched March 2018
•Currently have 33% of total job
market listings
LISTINGS
•YUDU audience has increased
from 1% to ~30% of Trade Me
Jobs' audience
AUDIENCE
•Branded content •Targeted advertising
•Listings
REVENUE
OPPORTUNITIES
Mar 18
Apr 18
May 18
Jun 18
60,000
50,000
40,000
30,000
20,000
10,000
-
Page
19
MONETISING OUR CONTENT
Global Learnings
•Audience willingness to pay for digital content
has increased significantly.
•Majority of global news publishers charge
for digital content.
•“Freemium” has become the preferred
business model.
nzherald.co.nz Average Site Duration
1
Minutes and seconds
3.30
3.10
2.50
2.30
Jan 18
Feb 18
Mar 18
Apr 18
May 18
Jun 18
Jul 18
Washington Post ARC Partnership
•New Content Management System
•A/B testing of content
•Personalisation
•Launched Premium & InDepth content
on nzherald.co.nz
2017
Audience Registration
•Utilising data insights
•Targeted content
•Enhancing talent profiles
•Expanding premium content offering
•Building engagement
2018
Paid Content Capability
•Freemium model for local premium content
and premium international business content
•Frictionless user experience and payment
options
•Bundled print and digital subscriptions
NZME PAID PROPOSITION
1
Nielsen Market Intelligence, Domestic Traffic (1 Jan 18 - 30 June 18).
Page
20
1
2
3
Opinion writer of the year
Discover now at nzherald.co.nz
Steve Braunias
Political journalist of the year
Discover now at nzherald.co.nz
Audrey Young
H1 18
FINANCIALS
Page
21
Page
22
NZME TRADING RESULT
•The statutory results reflect the impact of
NZ IFRS 15 Revenue from Contracts with
Customers on Revenue. For presentation
purposes the H1 18 Trading result is provided
on a basis consistent with the FY17 result to
enable a like-for-like comparison. Refer to page
30 of this presentation and note 2.1.1 of the
Consolidated Interim Financial Statements for
further detail.
•Trading revenue down 3% due to decline
in Print advertising which has been in part
offset by growth in Digital.
•Other income primarily relates to the provision
of financial back office services to third parties.
•Cost savings have been largely invested in the
new Digital Classifieds which has had a flow on
effect to NPAT.
•Amortisation has increased reflecting recent
investments in software assets.
$m
H1 18
Trading
1
H1 17
Trading1
% Change
Revenue183.5189.1(3%)
Other Income2.21.913%
Total Revenue & Other Income185.7191.0(3%)
Costs(162.5)(162.8)(0%)
EBITDA23.228.2(18%)
Depreciation and amortisation(13.1)(12.1)9%
EBIT1 0.116.2(37%)
Net Interest(2.1)(2.3)(6%)
NPBT8.013.9(43%)
Tax(2.4)(4.0)(39%)
Trading NPAT5.59.9(44%)
Trading earning per share (cps)2.85.0(44%)
1
All Trading measures shown here are non-GAAP measures that are explained and reconciled in the Supplementary Information on pages 30-31.
Page
23
NZME COSTS
EXCEPTIONAL ITEMS
•Underlying costs
3
down 2% reflecting the
ongoing impact of cost efficiency programs.
•Print and distribution costs are lower due
to reduced print volumes and efficiency
benefits from the closed loop colour
registration upgrade.
•The increase in content costs reflects
investment in video content production.
•$3.1m invested in launching the three Digital
Classifieds. The majority of this investment
has been in people, marketing, data and
technology licensing.
$m
H1 18
Trading
1
H1 17
Trading1
% Change
People costs & contributors79.382.1(3%)
Print & distribution costs31.234.4(9%)
Agency commission & marketing1 7.61 7. 51%
Property10.310.8(4%)
Content7.15.627%
IT & communications6.25.95%
Other7.76.715%
Total Costs excluding Digital Classifieds Costs159.4162.8(2%)
Costs associated with Digital Classifieds3.1--
Total Trading Costs162.5162.8(0%)
$mH1 18H1 17
Redundancies2.11.4
Costs in relation to one-off projects0.41.2
Total Exceptional Items
2
2.52.6
1
All Trading measures shown here are non-GAAP measures that are explained and reconciled in the Supplementary Information on pages 30-31.
2
Refer to Note 2.3.2
of the Consolidated Interim Financial Statements for the period ended 30 June 2018 for a more detailed explanation of exceptional items.
3
Trading Costs excluding
Digital Classifieds Costs.
Page
24
NZME BALANCE SHEET
•The balance sheet remains strong with
net debt of $106m stable year on year.
•Lower payables reflects reduced print costs,
timing of incentives, and the migration to
software as a service.
•The movement in net working capital
has been driven predominantly by the
timing of tax payments.
•Bank facilities of $160m expire on
1 January 2020. Undrawn bank facilities
as at 30 June 2018 totalled $41.2m.
•NZME has engaged an external adviser
to review our capital structure, dividend policy
and advise on the refinance of our bank
facilities.
$mJun 18Dec 17Jun 17
Trade, other receivables and inventory54.257. 258.4
Trade and other payables(50.0)(56.9)(59.8)
Current tax (liability)/receivable2.6( 7.6 )(0.3)
Net working capital (excluding cash)6.8( 7. 3 )(1.7 )
Fixed, intangible and other assets395.3401.3406.2
Net interest bearing liabilities(106.1)(90.2)(106.8)
Other liabilities(14.8)(14.8)(15.9)
Net Assets281.3289.0281.7
Rolling 12 month Trading EBITDA161.266.26 7. 5
Trading¹ net interest cover14.515.212.3
Net debt to trading EBITDA1.71.41.6
1
All Trading measures shown here are non-GAAP measures that are explained and reconciled in the Supplementary Information on pages 30-31.
Page
25
NZME CASH FLOW
•Solid operating cash flow in H1 18 has
been applied to tax payments, dividends and
capex.
•Key items broadly stable on same period
last year, but increased tax due to payment
timing.
$m
H1 18
Trading1
H1 17
Trading1
Trading EBITDA23.228.2
Share based payment scheme (non-cash)0.20.2
Movement in payables and receivables(4.0)(9.3)
Cash from operations19.61 9.1
Net interest expense(2.0)(2.2)
Capital expenditure( 7.1 )(6.8)
Exceptional items(2.5)(2.6)
Dividends paid (11.8)(11.9)
Tax paid (11.9)(6.5)
Movement in net debt(15.9)(10.9)
1
All Trading measures shown here are non-GAAP measures.
Page
26
•H1 18 advertising revenue declined 4% on the same period last
year. Advertising bookings for Q3 are consistent with the H1
result, down 4% year on year. Agency advertising spend remains
challenged and softening economic conditions have the potential
to weaken or delay advertising revenue in H2.
•NZME continues to hold or increase share across all channels.
•The benefit of cost initiatives implemented in H1 18
are expected to be reflected in H2 18 but are not expected
to be sufficent to offset the softening advertising revenue
in the underlying business.
•In addition, we continue to invest in Digital Classifieds to
create new future revenue streams and shareholder value.
FY18 EBITDA will reflect this softened market and investment
in Digital Classifieds.
OUTLOOK
Page
27
H2 18 FOCUS ON OPERATIONAL PRIORITIES
Grow audience and
engagement
•Expand range of Premium content on nzherald.co.nz
•Implement registration on the site to improve personalisation and engagement
•Embed new radio shows and continue momentum in audience growth
Return advertising
revenue to growth
•Maintain improved direct channel momentum
•Leverage integrated audience sell across all channels to offset the impact of challenging
advertising market
Effective cost and capital
management
•Cost out initiatives implemented in H1, will benefit H2 performance,
partially offset by continued investment in Digital Classifieds
•Have engaged external adviser to review our capital structure
Develop our talent and people
•Continue to develop the profile of our journalism team ahead of the launch of
paid content
•Attract new talent to further enhance premium proposition
•Prepare for transition of new talent on key Newstalk ZB shows
Grow new revenue streams
•Continue to invest in listings and audience on OneRoof, DRIVEN and YUDU
•Deliver paid content capability in late 2018
Stuff Merger
•Evaluate following release of Court of Appeal judgement (expected in H2)
Q+A
Page
28
AUCKLAND 89.4FM
SUPPLEMENTARY
INFORMATION
Page
29
Page
30
NZME H1 18
RECONCILIATION OF TRADING RESULT TO
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
$m
H1 18
Trading
NZ IFRS
15
1
Exceptional
Items7
H1 18
Financial
Statements
Segment revenue2
- Print
103.6
--
103.6
- Radio
51.0
3.8-
54.8
- Digital
29.0
--
29.0
Other Income
3
2.2
--
2.2
Total Revenue and Other Income185.73.8-189.5
Costs
4
(162.5)
(3.8)(2.5)
(168.9)
EBITDA23.2-(2.5)20.7
Depreciation and amortisation
( 1 3 .1 )
--
( 1 3 .1 )
EBIT1 0.1-(2.5)7. 6
Net interest expense
5
(2.1)
--
(2.1)
NPBT8.0-(2.5)5.4
Tax
6
(2.4)
-0.7
(1.8)
N PAT5.5-(1.8)3.7
Earnings per share (cps)2.8--1.9
1
For a detailed explanation of the NZ IFRS 15
adjustment please refer to Note 2.1.1 of the
Consolidated Interim Financial Statements
2
Segment revenue in the H1 18 Financial Statements
column agrees with the segment revenue as
disclosed in notes 2.1 and 2.3 of the Consolidated
Interim Financial Statements for the period ended
30 June 2018. The H1 18 Segment revenue excludes
the NZ IFRS 15 adjustment to ensure a like-for-like
comparison with the H1 17 information that are not
restated for the effects of NZ IFRS 15.
3
Other Income consists of revenue from the shared
service centre of $1.7m and other income of $0.5m
as disclosed in note 2.1 of the Consolidated Interim
Financial Statements.
4
Costs in the H1 18 Financial Statements agrees to
Expenses from operations before finance costs,
depreciation and amortisation as disclosed in the
Consolidated Interim Income Statement.
5
Net interest expense is made up of Finance Cost
of $2.2m (as disclosed in the Consolidated Interim
Income Statement) less Finance income of $0.1m as
disclosed in note 2.1.
6
Trading tax payable has been calculated using
NZME's effective tax rate on NPBT excluding
exceptional items of 30%.
7Exceptional Items consist of redundancies and
costs in relation to one-off projects (as disclosed
in the note 2.3.2 of Consolidated Interim Financial
Statements).
Page
31
NZME H1 17
RECONCILIATION OF TRADING RESULT TO
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
$m
H1 17
Trading
Result
Excepional
Items
H1 17
Statutory
Result
Segment Revenue1
- Print
110.6
-
110.6
- Radio
52.6
-
52.6
- Digital
26.0
-
26.0
Other Income
2
1.9
-
1.9
Total Revenue and Other Income191.0191.0
Costs
3
(162.8)
(2.6)
(165.5)
EBITDA28.2(2.6)25.6
Depreciation and amortisation
(12.1)
-
(12.1)
EBIT16.2(2.6)13.5
Net interest expense
4
(2.3)
-
(2.3)
NPBT13.9(2.6)11.2
Tax
5
(4.0)
0.5
(3.5)
N PAT9.9(2.1)7. 8
Earnings per share (cps)5.0(1.0)4.0
1
Segment revenue agrees
with the segment revenue as
disclosed in notes 2.1 and 2.3 of
the Consolidated Interim Financial
Statements for the period ended
30 June 2018.
2
Other Income consists of revenue
from the shared service centre
of $1.5m and other income of
$0.4m as disclosed in note 2.1 of
the Consolidated Interim Financial
Statements.
3
Costs in the H1 17 Financial
Statements agrees to Expenses
from operations before finance
costs, depreciation and
amortisation as disclosed in the
Consolidated Interim Income
Statement.
4
Net interest expense is made
up of Finance Cost of $2.4m (as
disclosed in the Consolidated
Interim Income Statement) less
Finance income of $0.1m as
disclosed in note 2.1.
5
Trading tax payable has been
calculated using NZME's effective
tax rate on NPBT excluding
exceptional items of 29%.
---
APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumber
Date
Nature of event
BonusIf ticked,
Rights Issue
Tick as appropriate
Issue
state whether:Taxable
/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
X
whether:
Interim
X
YearSpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISIN
class of securities
If unknown, contact NZX
Number of Securities toMinimum
Ratio, e.g
be issued following eventEntitlement
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Tick if
provide an
pari passu
OR explanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per securityPayment
(does not include any excluded income)
Excluded income per security
(only applicable to listed PIEs)
SupplementaryAmount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Imputation Credits
issue state strike priceWithholding Tax(Give details)
Foreign
FDP Credits
Withholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date.
Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
EMAIL: announce@nzx.com
Notice of event affecting securities
NZME Limited
Michael BoggsDirector's resolution
09 379 50502382018
ORDINARY SHARESNZNZME0001S0
In dollars and cents
RETAINED EARNINGS
$0.02000
$0.0000
Enter N/A if not
applicable
$$0.001389$0.007778
$
NZD$0.003529
$0.02000
Date Payable
26 October, 2018
16 October, 201826 October 2018
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
Other issuers discussed similar conditions around this time
Matched by meaning across NZX announcement text, not keywords — based on our semantic index of announcement bodies.
- NZX — NZX Limited: NZX Half Year 2018 & Interim Report Published2018-08-14
“NZX Limited Results for announcement to the market Reporting Period 6 months to 30 June 2018 Previous Reporting Period 6 months to 30 June 2017 Amount (000s) Percentage change Revenue from ordinary activities $NZ 33,423 2.0% Profit (loss) from ordinary activities…”
- NZX — NZX Limited: NZX Half Year 2018 & Interim Report Published2018-08-14
“NZX Limited Results for announcement to the market Reporting Period 6 months to 30 June 2018 Previous Reporting Period 6 months to 30 June 2017 Amount (000s) Percentage change Revenue from ordinary activities $NZ 33,423 2.0% Profit (loss) from ordinary activities…”
- CHI — Channel Infrastructure NZ Limited: Half Year Announcement 20182018-08-22
“Interim Announcement 2018 The New Zealand Refining Company Limited Results for announcement to the market Reporting Period six months to 30 June 2018 Previous Reporting Period six months to 30 June 2017 The Directors of The New Zealand Refining Company Limited…”