NZME Half Year Results to 30 June 2021
NZX/ASX RELEASE
24 August 2021
NZME 2021 Half Year Results
Please refer to the following documents in relation to the NZME Half Year Results to 30 June
2021:
1. NZME 2021 Half Year Results NZX Form
2. NZME 2021 Half Year Results Announcement
3. NZME 2021 Half Year Results Investor Presentation
4. NZME 2021 Consolidated Interim Financial Statements
5. Distribution Notice - NZX Form
Chief Executive Officer Michael Boggs, and Chief Financial Officer David Mackrell, will discuss
the HY21 results by webcast at 10.00am New Zealand time today. The webcast will be
available later today at www.nzme.co.nz/investor-relations/webcasts.
To register to attend please click the below link:
https://NZME.zoom.us/webinar/register/WN_ZJjhTvjvRgKBW4Yu7707tg
ENDS
Authorised by Michael Boggs, Chief Executive Officer.
For further information:
David Mackrell
Chief Financial Officer
T: +64 21 311 911
Email: david.mackrell@nzme.co.nz
---
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Results for announcement to the market
Name of issuer NZME
Reporting Period 6 months to 30 June 2021
Previous Reporting Period 6 months to 30 June 2020
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$173,035 8%
Total Revenue $173,035 8%
Net profit/(loss) from
continuing operations
$5,564 85%
Total net profit/(loss) $5,564 85%
Interim/Final Dividend
Amount per Quoted Equity
Security
$ 0.03000000
Imputed amount per Quoted
Equity Security
$0.01166667
Record Date 10 September 2021
Dividend Payment Date 22 September 2021
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$(0.04) $(0.17)
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer to attached NZX results announcement commentary, the
2021 Consolidated Interim Financial Statements and the 2021
Half Year Results Presentation for full commentary on the
results.
Authority for this announcement
Name of person
authorised
to make this announcement
Michael Boggs, CEO
Contact person for this
announcement
David Mackrell, Chief Financial Officer
Contact phone number 021 311 911
Contact email address david.mackrell@nzme.co.nz
Date of release through MAP
24/08/2021
Unaudited financial statements accompany this announcement.
---
NZX/ASX RELEASE
24 August 2021
NZME LIMITED 2021 HALF YEAR FINANCIAL RESULTS
Continued momentum as strategic digital growth delivers returns for shareholders.
Auckland, 24 August 2021: NZME Limited (NZX: NZM, ASX: NZM) (“NZME”) has today
announced its financial results for the half year ended 30 June 2021, reporting Statutory Net
Profit After Tax (“NPAT”) of $5.6 million, up 85% on the corresponding period in 2020.
NZME also announced growth in Operating Earnings before Interest, Tax, Depreciation and
Amortisation (EBITDA)
1
to $30.1 million for the half year, representing 4% growth in Operating
EBITDA against the first half of 2020. Operating revenue
1
was $172.5m which was 9% higher
than the first half of 2020.
“NZME is delighted to share a set of results that feature earnings growth and a further reduction
in net debt,” said NZME CEO Michael Boggs.
“Emerging from the significant disruption encountered in 2020 NZME has maintained a
steadfast focus on key strategic priorities. This has meant that as New Zealand’s many
commercial sectors are steadily rebuilding their investment in audience engagement, NZME’s
advertising revenues continue to approach the levels achieved in 2019, before the pandemic
struck,” said Boggs.
NZME’s Net Debt was reduced by a further $15.2 million during the half year to $18.6 million
and is now below NZME’s target leverage ratio.
“A rigorous commercial discipline and a continual focus on managing the cost base as business
activity recovers has improved NZME’s ongoing Capital Management performance and has
supported the continued strengthening of NZME’s Balance Sheet,” said NZME Chairman Barbara
Chapman.
NZME today announced that given the significant reduction in debt and based on the business
outlook and NZME’s capital requirements the NZME board has declared a fully imputed and
fully franked dividend of 3.0 cps.
“That NZME is in a position to return a dividend to its shareholders, while navigating the
extraordinary and ongoing challenges posed by the impacts of the pandemic reinforces NZME’s
position as a robust, resilient, and agile multi-media business,” said Chapman.
The board was in a position to approve and announce a capital return to shareholders.
However, given the Covid-19 uncertainties that have emerged in the past week, the board has
chosen to pause at this time.
NZME 2021 Half Year Results at a glance:
Statutory Net Profit After Tax of $5.6 million, up 85% on HY 2020.
Operating EBITDA
1
of $30.1 million, up 4% on HY 2020.
Operating Revenue
1
of $172.5 million, up 9% on HY 2020.
1
Operating Results exclude exceptional items to allow for a like-for-like comparison between 2020 and 2021
Half Years. Please refer to pages 33-34 of the 2021 Half Year Results presentation for a detailed reconciliation.
Operating NPAT
1
of $7.8 million, up 14% on HY 2020.
Operating Earnings per Share
1
of 3.9 cents per share, up from 3.5 cents per share in
HY 2020.
Net Debt of $18.6 million, down by $15.2 million on FY 2020.
Achieved continued growth in NZME’s Radio revenue market share.
New Zealand Herald subscriber base growth continues to 178,000 subscribers.
Including 67,000 paid digital NZ Herald Premium subscribers.
Grown OneRoof digital revenue by 145% with OneRoof total revenue up 30%.
nzherald.co.nz, has now been New Zealanders’ preferred digital news provider for 11
months in a row.
Maintained growth in revenue market share achieved across all key channels.
“It’s been very pleasing to see growth across a number of NZME’s digital platforms such as NZ
Herald Premium, OneRoof digital classifieds and overall digital advertising being the major
drivers of performance that have supported NZME’s ongoing return to earnings growth,” said
Boggs.
With advertising adversely impacted by COVID-19 in 2020, NZME’s focus has been on returning
advertising revenue to 2019 levels.
“Our commercial partners are rebuilding their investment in advertising after the challenges in
2020”.
“In the first 3 months of this year, advertising revenue was 5.5% down on 2019, in the second
quarter we were down just 1% on the same quarter in 2019. And, in June advertising revenue
was actually higher than June 2019 which is very pleasing,” said Boggs.
Sale of GrabOne
NZME has also announced it has reached a conditional agreement to sell its GrabOne business
to Global Marketplace New Zealand Limited (GMP) for NZD$17.5 million (payable in cash on
completion). NZME retains the net liabilities to settle as they fall due.
The sale is not subject to any regulatory conditions. It is conditional on no material adverse
change to the performance of GrabOne occurring prior to completion, and on GMP completing
funding arrangements by 15 October 2021. The sale is expected to be completed no later than
31 October 2021.
The agreement follows NZME’s announcement in November 2020 that GrabOne was not a core
strategic focus and that opportunities to divest the ecommerce platform would be explored.
(Note: a separate announcement regarding the sale of GrabOne has been provided to
NZX/ASX).
NZME 2021 Outlook Update:
NZME has advised shareholders its outlook is one of cautious optimism.
“We should all be under no illusions that ongoing Covid-19 related issues, such as the
nationwide lockdown currently in place, will continue to impact the recovery,’ said Chapman.
“Our commercial partners remain wary of Covid-19 cases, uncertainty over international travel
bubbles and the more recent challenges of labour force shortages and inflationary pressures
on their cost bases.
“However, it is in this environment that the NZME business has proven it has the resilience and
agility to perform well,” said Chapman.
NZME’s 2021 Half Year Results Investor Presentation includes the following Outlook
statements:
Given that New Zealand has moved into Level 4 lockdown over the past week, we are
wary of the potential impacts of this outbreak.
We have been pleased to see advertising revenues track closer to 2019 levels. Q3 2021
had been tracking to be in line with 2019 levels prior to the outbreak.
Real Estate markets have been active and provide an opportunity for OneRoof to grow.
On the basis of the trends to date and on New Zealand containing any outbreaks
quickly, we would expect profit growth over 2020 for the full year 2021. However, this
may become challenging depending on the duration of the lockdowns.
Google has announced that it will bring Google News Showcase to New Zealand by the
end of 2021. We look forward to discussing with both Google and Facebook
arrangements in regard to accessing and supporting editorial content.
We will update NZME’s Capital Management position further when market conditions
become clearer and the sale of GrabOne has been concluded.
“Maintaining NZME’s growth momentum will require a continual focus on delivering great
content for New Zealand audiences and on a relentless dedication to supporting our commercial
partners.
“I’d like to thank our people and our commercial partners for their ongoing loyalty and their
commitment to NZME,” said Boggs.
Results materials can be found at: https://www.nzx.com/companies/NZM/announcements
ENDS
Authorised by the Board of NZME Limited.
For investor queries:
David Mackrell
Chief Financial Officer
T: +64 21 311 911
Email: david.mackrell@nzme.co.nz
For media queries:
Cliff Joiner
GM Communications
T: +64 21 270 9995
Email: cliff.joiner@nzme.co.nz
About NZME
New Zealand Media and Entertainment (NZME) is an integrated media company, with a
portfolio of market leading news, entertainment and real estate brands strategically
positioned across a network of digital, print and audio platforms.
With an audience of 3.4 million New Zealanders
2
, NZME supports commercial partners to
grow customer engagement with a data driven, audience and customer centric approach.
2
SOURCE: Nielsen CMI Fused Q2 20 – Q1 21 June 2021 AP15+
---
2021 HALF YEAR RESULTS
Six months to 30 June 2021
24 August 2021
EVERYONE’S HERE.
2
AGENDA
Results Summary
3
Market Dynamics
4
Divisional Performance and Strategy
8
2021 Half Year Financial Results
22
Capital Management
27
Outlook
29
Q&A
30
Supplementary Information
31
3
3.0cps
Interim Dividend
Payable on 22 Sep 2021
$172.5m
Operating Revenue
1
H1 2020 $157.8m9%
1.Operating results presented include the impact of standard NZ IFRS 16adjustments, however,
exclude exceptional items to allow for a like for like comparison between 2020 and 2021 financial
years. Please refer to pages 33-34of this results presentation for a detailed reconciliation.
Operating and statutory results include $8.6 million (net) of Covid-19 government wage subsidy
received in H1 2020.
•Earnings growth reflects continued progress on strategic priorities
and revenue recovery post Covid-19:
•Continued growth in Radio revenue market share
and iHeartRadio listening.
•Growth of NZ Herald subscribers with 178,000 subscribers of
which –more than 67,000 are paid digital subscribers.
Total reader revenue up 3%.
•OneRoofcontinues to grow; digital revenue increasing 145%
compared to the same period last year, with total OneRoofrevenue
up 30%.
•Annualised $20 million of permanent cost-basereduction versus 2019
is reflected in the results, with overall higher costs versus 2020 as a
result ofincreased revenue and volume.
•Operating EBITDA
1
$30.1 million, up 4% despite 2020 including
$8.6 million of government subsidies.
•Statutory Net Profit After Tax of $5.6 million, up 85%.
•Net debt reduced by $15.2 million, in the half, to $18.6 million.
•Fully imputed and fully franked interimdividend declared of 3.0cents per
share.
RESULTS
SUMMARY
For the half year ending 30 June 2021
$30.1m
Operating EBITDA
1
H1 2020 $28.9m4%
$7.8m
Operating NPAT
1
H1 2020$6.8m 14%
$5.6m
Statutory NPAT
H1 2020$3.0m85%
3.9cps
Operating EPS
1
H1 20203.5cps13%
$18.6m
Net Debt
Reduced by $15.2m
4
MARKET
DYNAMICS
5
•Agency advertising market was up 6% in the first half of 2021 compared to H1 2019.
In the platforms where NZME operates, the agency trends for the total market
compared to H1 2019 are as follows:
•Radio advertising down 2%.
•Newspaper advertising down 31%
•Digital advertising was up 20%
2. Standard Media Index (SMI) NZ Data Release, June 2021
AGENCYMARKET
RETURNED TO
GROWTH
2
7
10
(2)
4
13
(4)
(2)
0
2
4
6
8
10
12
14
Jan-21
Feb-21Mar-21
Apr-21
May-21
Jun-21
Monthly agency revenue growth % vs 2019
2
•The ANZ Business Confidence Index
1
for New Zealand had continued
to be positive in February following the December 2020 reading, then
dropping back nearing the end of June 2021.
1. Net Index (% expecting improvement minus % expecting deterioration)
(19)
(64)
(67)
(42)
(34)
(32)
(42)
(29)
(16)
(7)
9
7
(4)
(2)
2
(1)
(80)
(70)
(60)
(50)
(40)
(30)
(20)
(10)
0
10
20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20Sep-20
Oct-20
Nov-20Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Monthly Business Confidence –Net Index
IMPROVED
BUSINESS
CONFIDENCE
6
-
5.0
10.0
15.0
20.0
25.0
JanFebMarAprMayJun
201920202021
•NZME is focused on advertising revenue performance
compared to 2019.
•Advertising revenue for H1 2021 was 3.2% lower than
the first half of 2019. However, for the month of June,
revenue was higher than June 2019.
•The first quarter of 2021 was tracking down 5.5%
compared to Q1 2019. In the second quarter
advertising revenue has continued to recover, with a
decline of 1% on Q2 2019.
REVENUE
ISRECOVERING
POST COVID
NZME Advertising Revenue excludes ‘other revenue’, such as news fees, production costs and
othersundry revenue.
Advertising Revenue (millions)
NZME Total Advertising Revenue H1 2019-2021
Advertising Revenue
% change
(H1 2020)
% change
(H1 2019)
Audio18.5%(3.6%)
Publishing22.1%(3.9%)
OneRoof45.8%(0.9%)
Q1 2021 vs 2019 (-5.5%)Q2 2021 vs 2019 (-1.0%)
7
NZME CONTINUES TO
OUTPERFORMTHEMARKET
1.Nielsen CMI Fused Q2 20 –Q1 21, People 15+.
2.PwC NPA quarterly performance comparison report, 6 months to June 2021 compared to 2020, rolling 4-quarter average for market share.
3.PwC Radio advertising market benchmark report, 6 months to June 2021 compared to 2020, rolling 12-month average for market share. Note: report excludes independent broadcasters and contra revenue.
4.IAB NZ Digital advertising revenue report–Total Display, Q1 2021 compared to Q1 2020, rolling 4-quarter average for market share up till Q1 2021.Q2 report not available yet. Note: excludes digital audio
5.This includes publishing and OneRoofprint advertising revenue
H1 2021 Total Segment Revenue $170.6m
Audio Advertising
$51.2m 30%
Publishing Digital
Advertising
$26.3m 15%
GrabOne$4.4m
3%
OneRoof Digital
$3.5m 2%
OneRoof Print
$7.0m 4%
Publishing Print
Advertising
$33.3m 19%
Print subscribers
$27.2m 16%
Retail sales$7.8m
5%
Digital
Subscriptions
$5.1m 3%
Other$4.8m
3%
Print advertising (YoY growth)
NZME print advertising revenue
5
14.5%
Market movement –Print revenue
2
11.1%
Print circulation (YoY growth)
NZME print circulation revenue(4.0%)
NZME movement –print readership
1
23.4%
Market movement –print readership
1
11.3%
Print readership Market Share
NZME print readership market share
1
56.7%
Print advertising Market Share
NZME print revenue market share
2
47.8%
Radio advertising (YoY growth)
NZME radio advertising revenue18.5%
Market movement –Radio revenue
3
15.4%
Digital display advertising (YoY growth)
NZME total display advertising revenue
4
22.7%
Market movement –total display revenue
4
21.5%
Digital display advertising Market Share
NZME total display revenue market share
4
24.3%
Radio advertising Market Share
NZME radio revenue market share
3
40.9%
8
DIVISIONAL
PERFORMANCE
9
89% of residential for-sale
listings nationwide
4
#1 25-54 year-old
breakfast show in NZ
2
#1 Daily newspaper in NZ
1
NZ’s #1 radio station and
favouritebreakfast talk show
2
NZ’s #1 digital news provider
3
Now over 119,000 digital
subscribers
1.Nielsen CMI Q2 20 –Q1 21 AP15+
2.GfK RAM, Commercial Radio, Total NZ 2/2021, M-S 12mn-12mn, M-F 6am-9am, Share %, AP10+ & M-F 6am-9am, Share %, AP25-54
3.Nielsen Online Ratings June 2021 AP15+ (excludes APP)
4.OneRoof'slistings as a percentage of residential for-sale real estate listings on trademe.co.nz as atJune 2021.
5.Nielsen CMI Fused Q2 20 –Q1 21 June 2021 AP15+
LEADING AUDIENCE AND
CUSTOMER CENTRIC BRANDS
32 print publications
9 audio brands
16 websites
17 real estate publications
NZMEreaches over 3.4million New Zealanders
5
10
$ millionH1 2021H1 2020% changeH1 2019
Radio advertising
49.642.317%52.4
Digital audio advertising
1.60.970%0.7
Other
0.64.6(87%)0.9
Audio revenue
51.847.98%54.0
People & Contributors
(25.8)(24.3)6%(26.4)
Agency Commission & Marketing
(9.4)(7.0)33%(9.5)
Content
(3.2)(2.8)17%(3.7)
Other
(4.5)(4.2)7%(6.5)
Audio expenses
(42.9)(38.3)12%(46.0)
Audio EBITDA
1
(incl. NZ IFRS 16)
8.89.6(8%)7.9
NZ IFRS 16 Adjustment
(3.7)(3.0)24%(3.4)
Audio EBITDA
1
(pre NZ IFRS 16)
5.16.6(23%)4.6
EBITDA
1
Margin (pre NZ IFRS 16)10%14%-4 ppt
8%
1.EBITDA is a non-GAAP measure which excludes exceptional items (redundancy costs, one-off projects and other exceptional items).
2.PwC Radio advertising market benchmark report, June 2021, 6 months to 30 June 2021 vs 6 months to 30 June 2020. Note: report excludes independent broadcasters and contra revenue.
3.iHeartMedia, Adobe Analytics, June 2021.
Note: Totals may not sum due to rounding
•Advertising revenue growth for H1 2021 more than offset
the lower ‘other’ revenue due to the government wage
subsidy received in 2020 ($3.7m). Audio advertising
revenue was 3.6% below H1 2019 as market recovers.
•Radio revenue market share grew year-on-year to 40.8%
in 2021, up from 39.7% for the comparable period
2
.
•iHeartRadio revenue grew 70% in 2020 to $1.6 million,
supported by significant growth in users and engagement
in music and podcasts
3
.
•Higher advertising revenue has resulted in higher costs in
terms of contentlicencefees and sales commissions.
•EBITDA
1
margin was higher than H1 2019, given the
permanent cost reductions.H1 2020 margin was
artificiallyhigh due to the impact of the wagesubsidy.
AUDIO
For the 6 months ending 30 June 2021
10
11
Market Share (%)
1.GfK Radio Audience Measurement, Commercial Stations, NZME and Partners, Cumulative Audience, Total NZ, S1 2019-S2 2021. AP10+.
2.GfK Radio Audience Measurement, Commercial Talk Stations, NZME, Market Share, Major Markets, S1 2019-S2 2021, AP10+.Note:RadioSport closed prior to S3 2020.
3.GfK Radio Audience Measurement, Commercial Music Stations, NZME, Market Share, Major Markets, S1 2019-S2 2021, AP25-54. Note: Gold included from S3 2020.
4.AdsWhizzand StreamGuys, TLH as at EOM
Weekly Listeners (000’s)
NZME Radio weekly listeners
–Total including partners
1
Market Share (%)
NZME Talk Radio –
Major Markets All 10+ Share
2
NZME Music Radio –
Major Markets 25-54 Share
3
iHeartRadio Monthly Total
Listening Hours (million)
4
Listening hours (millions)
AUDIO LISTENERS
MARKET SHARE
11
5
10
15
20
25
30
S1/2018S2/2018S3/2018S4/2018S1/2019S2/2019S3/2019S4/2019S1/2020S3/2020S4/2020S1/2021S2/2021
5
6
7
8
9
10
11
12
13
14
15
S1/ 2018S2/ 2018S3/ 2018S4/ 2018S1/ 2019S2/ 2019S3/ 2019S4/ 2019
S1/2020S3/2020S4/2020S1/2021S2/2021
1,500
1,600
1,700
1,800
1,900
2,000
2,100
S1/2019S2/2019S3/2019S4/2019S1/2020S3/2020S4/2020S1/2021S2/2021
0
1
2
3
4
5
6
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Closure
ofRadio
Sport
Content
changes
made
12
1.GfK Radio Audience Measurement, Commercial Stations, NZME excl. Partners, Market Share %, S4 2020 –S2 2021, AP10+. 1* Cumulative Audience (000s), S2 2021compared to S1 2021, AP25-54
2.PwC Radio advertising market benchmark report, Dec 2020, 12 months to 31 Dec 2020, 2* June 2021 Rolling 12-month average. Note: report excludes independent broadcasters and contra revenue.
3.EBITDA is a non-GAAP measure and is presented as excluding the impact of NZ IFRS 16, however excluding exceptional items (redundancy costs, one-off projects and other exceptional items).
4.AdswizzAudioMetrixinclTableau TLH Jan-Jun 2021, SpreakerJan-Jun 2021
NEW ZEALAND’S LEADING
AUDIO COMPANY
12
Metric
FY 2020
Achievement
H1 20212023 TargetProgress Update
NZME share of total
audience
35.6%
1
34.4%
1
> 1% share
point growth per
annum
•Breakfast show audiences have grown for the 25-54 demographic across 8 of the 9 radio
brands
1*
•Key on-air hostcontracts extended across major brands
•Frequency extension and optimisation in Northland supporting Hits, Coast and Flava
•New local shows added in Manawatu, Taranaki and Wellington
•iHeartRadio growth with total listening hours across radio brands up 9% YOY and podcast
consumption is up 14%
4
Radio Revenue Share40.4%
2
40.9%
2*
> 1% share
point growth per
annum
•Radio revenue share 12 month rolling average is now at 40.9%
•Enhanced regional management structures have been established. Sales academies and
sales management training completed
•Localised tactical revenue growth strategies in place including best sales and on-air talent
Digital audio revenue
as a % of total audio
revenue
2.4%3.2%5%
•Producing more shows and partnering with existing shows to create more ad inventory,
with ad impressions doubling year-on-year
•Delivering higher yield rates through iHeartRadio, increasing 63% from the start of H1 to
Jun 21
•Head of Digital Audio commenced in H1 2021
EBITDA
3
Margin Target
(pre NZIFRS16)
14%10%15 –17%
13
$ millionH1 2021H1 2020% changeH1 2019
Print subscriptions
27.227.5(1%)27.8
Digital subscriptions
5.12.4111%0.2
Retail outlet sales
7.88.9(13%)10.7
Total reader revenue
40.238.93%38.7
Print advertising
33.329.413%41.8
Digital advertising
26.319.435%20.2
Total advertising revenue
59.648.922%61.9
Other
4.49.5(54%)10.0
Publishing revenue104.1
97.37%110.6
People & Contributors
(39.0)(38.2)2%(42.5)
Print & Distribution(22.2)
(19.8)12%(26.0)
Agency Commission & Marketing
(10.9)(8.3)31%(9.9)
Content
(3.9)(3.3)17%(3.5)
Other
(6.3)(7.1)(12%)(7.8)
Publishing expenses
(82.2)(76.8)7%(89.8)
Publishing EBITDA
1
(incl. NZ IFRS 16)
22.020.57%20.9
NZ IFRS 16 Adjustment
(4.1)(3.7)10%(4.3)
Publishing EBITDA
1
(pre NZ IFRS 16)
17.916.86%16.5
EBITDA
1
Margin (pre NZ IFRS 16)17%17%0 ppt15%
•Growth in total reader revenue of 3% with significant growth in
digital reader revenue offsetting the 4% decline in print reader
revenue year-on-year.
•Print subscriber revenue decline of 1% due to a 4% decline in
volume,partially offset by a 3% increase inyield.
•Digital subscriber revenue growth of $2.7 million driven by
subscriber volume -14,000 digital subscribers added in the half.
•Print advertising revenue is up 13% year-on-year, largely due to
the recovery of revenue after the impacts of Covid-19 on H1 2020
revenues.
•Digital advertising revenue growth of 35%, as a result
of increased demand post Covid-19 and improved yield.
•Total advertising revenue up 22% and within4% of 2019
advertising revenues.
•Other publishing revenue in 2020 included $4.2 million
of government wage subsidy received in H1 2020.
•Print & Distribution expenses are up 12% year on year due to
increased volume relating to Covid-19 impacts on H1 2020.
•Content expenses are up 17% year on year reflecting the
increased re-sale ofdigital services.
•EBITDA
1
increased year-on-year by $1.5 million,
with EBITDA margin increasing from 2019.
PUBLISHING
For the 6 months ending 30 June 2021
13
1.EBITDA is a non-GAAP measure which excludes exceptional items (redundancy costs, one-off projects and other exceptional items).
Note: Totals may not sum due to rounding
14
Brand Audience (000’s)
1.Nielsen CMI Q2 17 –Q1 21, AP 15+, average issue readership trend.
2.Nielsen CMI Q1 20 –Q1 21, June 2021, AP 15+.
Readership (000’s)
NZ Herald (Mon-Sat) and Herald on
Sunday Average Issue Readership
1
NZ Herald Daily and Weekly
Brand Audience
1
14
BRAND AUDIENCE INCREASING
Audience (000’s)
200
250
300
350
400
450
500
550
600
650
700
Q2 17 - Q1 18Q3 17 - Q2 18Q4 17 - Q3 18Q1 18 - Q4 18Q2 18 - Q1 19Q3 18 - Q2 19Q4 18 - Q3 19Q1 19 - Q4 19Q2 19 - Q1 20Q3 19 - Q2 20Q4 19 - Q3 20Q1 20 - Q4 20Q2 20 - Q1 21
NZ HeraldHerald On Sunday
500
700
900
1,100
1,300
1,500
1,700
1,900
2,100
2,300
Q2 17 - Q1 18Q3 17 - Q2 18Q4 17 - Q3 18Q1 18 - Q4 18Q2 18 - Q1 19Q3 18 - Q2 19Q4 18 - Q3 19Q1 19 - Q4 19Q2 19 - Q1 20Q3 19 - Q2 20Q4 19 - Q3 20Q1 20 - Q4 20Q2 20 - Q1 21
Daily Brand AudienceWeekly Brand Audience
NZME Total Monthly Digital Users
2
High readership
engagement
during Covid-19
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
3,000
Jan-20
Feb-20Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20Sep-20
Oct-20
Nov-20Dec-20
Jan-21
Feb-21Mar-21
Apr-21
May-21
Jun-21
NZME Totalnzherald.co.nz
15
Subscriptions Mix
# of subscribers
15
TOTAL SUBSCRIBERS GROWING
1.Subscriber volume drives revenue and represents the count of individual paid papers delivered including the NZ Herald,
Herald on Sunday and Regionals. Subscriber yield includes promotional volumes.
Print Subscriber Volume and Yield
1
Yield ($)
Subscriber Volume (millions)
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Apr-19
Jun-19
Aug-19
Oct-19
Dec-19
Feb-20
Apr-20
Jun-20
Aug-20
Oct-20
Dec-20
Feb-21
Apr-21
Jun-21
Print OnlyPrint EntiltedDigital Only
# of subscribers
Annual Yield per Subscriber
Digital Subscription Volume and Yield
1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021
Subscriber VolumeYield
$-
$50
$100
$150
$200
$250
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021
Digital Subs VolumeAnnual Yield Per Sub
16
1.Stats.govt.nz Dwelling and household estimates: June 2021 quarter
2.EBITDA is a non-GAAP measure and is presented as excluding the impact of NZ IFRS 16, however excluding exceptional items (redundancy costs, one-off projects and other exceptional items).
3.Nielsen Online Ratings Aug 2020 –Jun 2021
16
NEW ZEALAND’SHERALD
Metric
FY 2020
Achievement
H1 20212023 TargetProgress Update
Subscription
Volume Target
169,000
subscribers
177,545
More than 210,000
subscribers by
2023year-end
•Increased retail and subscription prices of newspapers
•Maintained position as NZ's #1 news site for 11 months
3
•Grew regional content for Wellington and Christchurch
•Partnership with Maori TV, Newshuband PMN to grow diversity in journalism
•Improving funnel and conversion performance utilising enhancedA/B testing
program and introducing Google social sign in to drive registration and logins
•Implemented story commenting for digital subscribers andcomment reading for
registered users to enhance audience engagement
•Launched new email onboarding series to drive 100-day habit
•Commenced development of improved propensity to churn model
Subscription
Volume Mix32% / 68%38% / 62%Digital Only > Print
% Households
Subscribing9%
1
9.5%
1
> 12% by year-end
Advertising
Revenue Mix
42% Digital44%> 45% Digital
•Commenced monetising 1st party audience data
•New native ad products launched
•Personalisation of content recommendations and tailored ad-serving using a
leading NZME-built content recommendation engine
•Demand for programmatic advertising continues, delivering increased volume
and yield
•SEO services added to NZME's Digital Performance Marketing productsuite
EBITDA
2
Margin Target
(pre NZIFRS16)
20%17%19 -20%
17
-32%
-7%
-26%
-100%
-41%
-11%
-4%
11%
-14%
-23%
1%
31%
-35%-35%
-33%
-29%
-1%
-8%
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20Sep-20
Oct-20
Nov-20Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
2020 vs 2019
2021 vs 2019
$ millionH1 2021H1 2020% changeH1 2019
Print
7.05.819%9.3
Digital
3.51.4145%1.3
Other
-0.8(95%)0.1
OneRoof revenue10.5
8.130%10.7
People & Contributors
(3.1)(3.2)(2%)(4.0)
Print & Distribution
(3.7)(2.6)39%(3.6)
Agency Commission & Marketing
(2.3)(0.5)331%(1.0)
Content
(0.6)(0.7)(12%)(0.5)
Other
(0.4)(0.4)(2%)(0.8)
OneRoof expenses
(10.1)(7.4)36%(10.0)
OneRoof EBITDA
1
(incl. NZ IFRS 16)
0.40.6(31%)0.8
NZ IFRS 16 Adjustment
(0.2)(0.2)10%(0.3)
OneRoof EBITDA
1
(pre NZ IFRS 16)
0.20.4(56%)0.5
EBITDA
1
Margin (pre NZ IFRS 16)2%5%-3 ppt4%
Total Real Estate revenue across all
NZME brands
20.515.3
34%20.3
•OneRoofprint revenue significantly impacted for Jan-Apr 2021 given
'booming' property market and reduced periods of advertising.
•Digital classifieds revenue of $3.5 million in H1 2021, of which
70% relates to listings.
•Other revenue included $0.7m of government wage subsidy in H1 2020.
•Increased investment in marketing to continue to grow revenue
and audience.
•EBITDA
1
of $0.4 million, down on H1 2020while investment
made in growing the business.
ONEROOF
For the 6 months ending 30 June 2021
17
1.EBITDA is a non-GAAP measure which excludes exceptional items (redundancy costs, one-off projects and
other exceptional items).
Note: Totals may not sum due to rounding
OneRoof Print Monthly Revenue Growth
18
0%
20%
40%
60%
80%
100%
120%
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20Sep-20
Oct-20
Nov-20Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Auckland %National %
OneRoofAuckland and national residential
for-sale listings as a % of Trade Me
1
1.OneRoof’slistings as a percentage of residential for-sale real estate listings on trademe.co.nz. Note: From June 2021 onwards lifestyle properties and sections were added to the OneRoofcount.
2.Nielsen Online Ratings,Jan 2020 -June 2021
Audience (000’s)
ONEROOF AUDIENCE & LISTINGS
18
Upgrade %
% Listings
OneRoofDigital Residential for-sale
ListingsUpgrade %
OneRoof Monthly Unique Online Audience
2
0
100
200
300
400
500
600
700
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20Sep-20
Oct-20
Nov-20Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Q1 19Q2 19Q3 19Q4 19Q1 20Q2 20Q3 20Q4 20Q1 21Q2 21
19
1.OneRoof’slistings as a percentage of residential for-sale real estate listings on trademe.co.nz as of 30 June 2021.
2.Nielsen Online Ratings, Dec 2020 -June 2021 (FY 20 has been amended to be the gap as of Dec 2020)
3.EBITDA is a non-GAAP measure and is presented as excluding the impact of NZ IFRS 16, however excluding exceptional items (redundancy costs, one-off projects and other exceptional items).
19
YOUR COMPLETE
PROPERTY DESTINATION
Metric
FY 2020
Achievement
H1 20212023 TargetProgress Update
Residential Listings89%
1
89%
1
100% of listings
•New leadership structure in place with changed regional reporting across key
markets of Northland, Bay of Plenty and Hawkes Bay
•National listings penetrationa focus for H2 2021
•Local publications established in North Island
Audience
#2, 460k,
gap to #1 of
271k
2
#2, 543k,
gap to #1
of 281k
2
Reduce gap to #1
•Segmentation of audiences has been completed, creating opportunities
to target real estate audiences with more relevant content and listings.
•New boost products for listings and agents are leveraged to drive overall audience
•New brand campaign launch across paid and owned media channels
with messaging designed to increase awareness
Listings Upgrade %10%12%
50% of residential
listings
•Residential for sale listing upgrades have increasednationally, with Auckland at
23%at the end of H1 2021
•Listing strategies across key markets in place with positive results
in a number of markets
Revenue24% / 76%33% / 67%Digital > Print
•Rural and retirement verticals are in development and expected to be live in
H2 2021
•Sponsorship revenues continue to grow, withkey category sponsors in the pipeline
for H2 2021
EBITDA
3
Margin
Target (pre NZ IFRS16)
9%2%15 -25%
20
For the half year
ended 30 June 2020
$ millionH1 2021H1 2020% changeH1 2019
Revenue4.4
4.19%4.6
People & Contributors
(1.7)(1.9)(9%)(2.5)
Agency Commission & Marketing
(0.4)(0.4)8%(0.4)
Content(0.2)(0.2)0%(0.1)
Other(0.5)(0.6)(15%)(0.5)
Total expenses(2.8)(3.0)(8%)(3.5)
EBITDA
1
(incl. NZ IFRS 16)1.61.158%1.2
NZ IFRS 16 Adjustment(0.1)(0.1)7%(0.1)
EBITDA
1
(pre NZ IFRS16)1.50.965%1.1
EBITDA
1
Margin (pre NZ IFRS16)35%23%12 ppt
22%
•GrabOneis classified as a held-for-sale asset
•On 23 August 2021 NZME entered into a conditional
agreement to sell GrabOneto Global Marketplace New
Zealand Ltd (GMP) for $17.5m (payable in cash on
completion). NZME retains the net liabilities to settle as
they fall due.
•The sale is not subject to any regulatory conditions. It is
conditional on no material adverse change to the
performance of GrabOneoccurring prior to completion,
and on GMP completing funding arrangements for the
acquisition by 15 October 2021.
•GMP will pay NZME abreak fee of $1 million if
thefunding condition is not satisfied by 15 October
2021.
•The sale is expected to be completed no later than 31
October 2021.
•Revenue grew by 9% which combined with 8%
lowerexpenses resulted in a 58% lift inEBITDA.
GRABONE
For the 6 months ending 30 June 2021
1.EBITDA is a non-GAAP measure which excludes exceptional items (redundancy costs, one-off projects and
other exceptional items).
Note: Totals may not sum due to rounding
21
For the half year
ended 30 June 2020
$ millionH1 2021H1 2020% changeH1 2019
Revenue
1.60.4265%1.1
People & Contributors
(1.9)(1.6)19%(2.0)
Agency Commission & Marketing
(0.1)(0.2)(50%)(0.3)
Content
(0.2)(0.2)0%(0.3)
Other
(2.2)(1.3)65%(1.7)
Total expenses
(4.4)(3.4)32%(4.3)
EBITDA
1
(incl. NZ IFRS 16)
(2.8)(2.9)(3%)(3.1)
•Revenue, which includes Driven and Events, increased
due to the reinstatement of events, cancelled during
Covid-19 lockdowns during H1 2020.
•Other expenses include corporate overheads, with
increases reflecting the cost of delivering events, in line
with revenue increase.
CORPORATE
& OTHER
For the 6 months ending 30 June 2021
1.EBITDA is a non-GAAP measure which excludes exceptional items (redundancy costs, one-off projects and
other exceptional items).
Note: Totals may not sum due to rounding
22
2021 HALF YEAR
FINANCIAL RESULTS
23
•Operating EBITDA
1
grew 4% in 2021.
•Segment revenue increased 16% to $170.6
million reflecting the significant impacts of Covid-
19 on advertising revenue in 2020.
•Other revenue in 2020 includes an $8.6 million
(net) government wage subsidy in H1 2020.
•H1 2021 operating expensesreflects the
permanent cost base reduction of $20million per
annum versus H1 2019.
•Cost increases associated with increased
revenue volumes were partially offset by the cost
initiatives implemented in response to Covid-19
pandemic.
•Net interest expense reduced in line with the
reduction in Net debt.
•Operating NPAT
1
increased $1.0 million to
$7.8million, and Operating earnings per share
increased to 3.9 cents per share.
$ million
H1 2021H1 2020% changeH1 2019
Segment revenue170.6147.316%178.3
Other revenue
1.810.5(82%)2.8
Operating Revenue
1
172.5
157.89%181.1
Operating expenses
1
(142.4)(128.9)10%(153.5)
Operating EBITDA
1
30.1
28.94%27.6
Depreciation and amortisation on owned
assets
(9.3)(8.7)8%(10.6)
Depreciation on leased assets(5.9)(6.3)(6%)(6.4)
Net interest expense on loans(1.3)(1.6)(24%)(2.4)
Interest expense on leases(2.6)(2.3)12%(2.5)
Operating NPBT
1
10.9
9.910%5.6
Taxation expense(3.1)(3.1)0%(1.6)
Operating NPAT
1
7.86.8
14%
4.1
Operating Earnings per Share
1
3.93.5
13%
2.1
1.Operating results presented include the impact of standard NZ IFRS 16, however exclude NZ IFRS 16 "one-offs" and
exceptional items to allow for a like for like comparison between 2021 and 2021 financial years.Please refer to pages 33-34of
this results presentation for a detailed reconciliation. Operating and statutory results include $8.6 million (net) of Covid-19
government wage subsidy received in H1 2020.
Note: Totals may not sum due to rounding
For the 6 months ended 30 June 2021
OPERATING
RESULTS
24
•People and contributors expense increased
3%reflecting the temporary salary sacrifice
reductions made by NZME's people in H1 2020.
•Printing and distribution expense
increased15%due to increased volumes given
H1 2020 included thetemporary suspension of
some print products due to Covid-19, and third-
party print volumes.
•Agency commission and marketing expense
increased 41%reflecting increased revenue and
activity in H1 2021.
•Content expenses are up year on year reflecting
the increased re-sale ofdigital services.
•Impairment of assets in H1 2021 includes an
impairment for Graham Street office fitout costs
in relation to the area of Graham street thathas
been sub-leased. Expected annualised cash
inflow from 2022 of ~$1 million per annum.
1.The $1.5m of NZ IFRS 16 adjustments relates to rent concessions received in 2020 in response to Covid-19 which are
included in the Other revenue of $2.9 million on slide 34.
Note: Totals may not sum due to rounding
For the 6 months ended 30 June 2021
EXPENSES
$ million
H1 2021
H1 2020
% change
H1 2019
People and contributors71.669.23%77.4
Print and distribution25.922.515%29.6
Agency commission and marketing23.016.441%21.1
Content8.17.213%8.1
Other expenses:
Property2.92.86%3.4
IT and communications5.46.0(10%)5.8
Other5.54.813%8.1
Total other expenses13.813.61%17.3
Total operating expenses142.4128.910%153.5
Exceptional and other items:
Redundancies0.37.03.2
One off projects and other exceptional items0.40.21.1
Profit on sale of Mt Victoriatransmission tower(0.5)--
Share of loss of JV’s0.4--
Impairment ofassets2.6--
NZ IFRS 16 adjustments(0.1)(1.5)
1
-
Total exceptional items3.15.84.3
25
$ million30 June 2021
31 December 2020
Trade, other receivables and inventory
45.645.4
Trade and other payables(45.9)
(43.8)
Current tax payable(1.5)
(2.7)
Net assets held for sale (WC)
(5.0)(6.0)
Net working capital excluding cash
(6.7)(7.2)
Plant property & equipment, intangibles and
other non-current assets
184.7193.5
Right of use assets (NZ IFRS 16)
77.885.4
Lease liabilities (NZ IFRS 16)
(101.4)
(107.5)
Net interest-bearing liabilities
(18.6)(33.8)
Deferred tax
1.1(0.3)
Net assets held for sale (FA/IA)
1.21.9
Net Assets
138.3132.1
As at 30 June 2021
BALANCE
SHEET
•Increase in trade and other payables is largely
due to higher people cost accrual,due to the
timing of salary payment dates.
•Higher deferred tax relates to timing
differences, primarily relating to impairment
due to the sub-lease of Graham Street.
•Net assets held for sale represents GrabOne
business with a net liability of$3.8m.
•Right of use assets have reduced by $7.6m
primarily due to annual depreciation and
impairment of Graham Street due to a partial
sublease.
•Lease liabilities have reduced due to annual
principal repayments.
•Net debt reduced by $15.2 million to
$18.6million as at 30 June 2021.
Note: Totals may not sum due to rounding
26
$ million
H1 2021H1 2020
Operating EBITDA
1
30.1
28.9
NZ IFRS 16 interest paid on leases
(2.6)(2.3)
Dividends received0.1-
Interest paid on bank facilities(1.3)(1.5)
Working capital movement(0.5)11.0
Exceptional items(0.7)(7.2)
Tax paid(4.7)(1.2)
Non-cash items1.5(0.2)
Cash flow from operations
21.927.7
Capital expenditure(2.7)(3.3)
Proceeds from sale of plant, property and equipment
1.8
-
NZ IFRS 16 lease liability principal repayment(5.6)(4.8)
Cash movement in Net Debt
15.3
19.6
Non-cash borrowing costs
(0.1)(0.1)
Movement in Net Debt
15.219.5
For the 6 months ended 30 June 2021
CASH
FLOWS
•Operating
1
cash flows of $21.9m is lower than
H1 2020, as 2020 benefited from a significant
reduction in working capital.
•Capital expenditure was $2.7 million in H1
2021, compared to $3.3 million in H1 2020.
•Capital expenditure is expected to be around
$10 million for the full year.
•The sale of Mt Victoria transmission site was
completed in April 2021.
•Lease liability principal repayments have
increaseddue to notransmission cost relief or
rent concessions in H1 2021.
1.Operating results presented include the impact of standard NZ IFRS 16, however exclude NZ IFRS 16 "one-offs" andexceptional
items to allow for a like for like comparison between 2021 and 2021 financial years.Please refer to pages 33-34ofthis results
presentation for a detailed reconciliation.Operating and statutory results include $8.6 million (net) of Covid-19government wage
subsidy received in H1 2020.
Note: Totals may not sum due to rounding
27
•Continued net debt reductionby $15.2 million in
6 months,to $18.6 million as at
30 June 2021.
•Leverage ratio (Net Debt to 12-month Operating
EBITDA pre IFRS 16
1
) decreased to 0.3 times
as at 30 June 2021.
•Leverage ratio now below target range.
30 June 202131 December 2020
12-months Operating EBITDA (pre NZ IFRS 16)
1
53.053.0
Interest Expense2.52.9
Net interest cover (Operating EBITDA
(pre NZIFRS 16)
1
/ Interest Expense)
21.118.1
Net Debt ($ million)18.633.8
Leverage Ratio (Net debt / 12-month Operating
EBITDA (pre NZ IFRS 16)
1
)
0.30.6
1.Operating results presented include the impact of standard NZ IFRS 16, however exclude NZ IFRS 16 "one-offs"
andexceptionalitems to allow for a like for like comparison between 2021 and 2021 financial years.Please refer to pages 33-
34ofthis resultspresentation for a detailed reconciliation.Operating and statutory results include $8.6 million (net) of Covid-
19government wagesubsidy received in H1 2020.
For the 6 months ended 30 June 2021
CAPITAL
MANAGEMENT
1.4
1.4
1.8
1.5
1.0
0.6
0.3
-
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
-
20.0
40.0
60.0
80.0
100.0
120.0
FY16FY17FY18FY19H120FY20H121
Leverage Ratio
(Net Debt / 12 month Operating
EBITDA)
Net Debt ($m)
Net Debt (LHS)Leverage Ratio (RHS)
28
Dividend Policy
NZME intends to pay dividends of 30-50% of Free Cash Flow subject to being
within its target leverage ratio and having regard to NZME's capital requirements,
operating performance and financial position.
Target Leverage Ratio of 0.5 to 1.0 times rolling 12 month EBITDA
1
(pre NZ IFRS
16).
Full dividend policy is available at www.nzme.co.nz/investor-relations/dividends/
•The board have declared a fully imputed and fully franked dividend of 3.0
cps.
•During the first half of 2021, the company has confirmed that A$9.2 million
of franking credits are available for use.
•The dividend will be paid on 22 September 2021, for registered
shareholders as at 10 September 2021.
•The board recognisesthe company’s strong capital position. In the absence
of opportunities to invest, it will return capital to shareholders.
•The board was in a position to approve and announce a capital return to
shareholders. However, given the current Covid-19 uncertainties that
emerged last week has chosen to pause at this time.
DIVIDEND AND
CAPITAL RETURN
29
•Given that New Zealand has moved intoLevel 4 lockdown
1
over the past week,
we are wary of the potential impacts of this outbreak.
•We have been pleased to see advertising revenuestrack closer to 2019 levels.
Q3 2021had been tracking to be in line with 2019 levels prior to the outbreak.
•Real Estate markets have been active and provide an opportunity for OneRoof
to grow.
•On the basis ofthetrends to date andon New Zealand containing any
outbreaksquickly,wewouldexpect profit growth over 2020 for the full year
2021.However,this may becomechallenging depending on the duration of the
lockdowns.
•Google has announced that it will bring Google News Showcase to New
Zealand by theend of 2021. We look forward to discussing with both Google
and Facebookarrangementsin regard toaccessing and supporting editorial
content.
•We will update you on the Capital Management position further when market
conditions become clearer and the sale of GrabOnehas been concluded.
•We also look forward to updating you at a NZME Investor Day to be held in
November 2021.
OUTLOOK
1.https://covid19.govt.nz/alert-levels-and-updates/about-the-alert-system/
30
Q&A
31
SUPPLEMENTARY
INFORMATION
32
For the full year
ended 31 December 2020
$m
Audio
PublishingOneRoofGrabOneOtherH1 21 TotalH1 20 Total% Change
Reader Revenue:
-Print-35.0---35.036.5(4%)
-Digital-5.1---5.12.4111%
Reader Revenue-40.2---40.238.93%
Advertising Revenue:
-Radio49.6----49.642.317%
-Print-33.37.0--40.335.314%
-Digital1.626.33.5-0.431.922.045%
Advertising Revenue51.259.610.5-0.4121.799.722%
Other Revenue0.64.4-4.41.210.619.2(45%)
Total Revenue51.8104.110.54.41.6172.5157.89%
People and Contributors(25.8)(39.0)(3.1)(1.7)(1.9)(71.6)(69.2)3%
Print & Distribution-(22.2)(3.7)--(25.9)(22.5)15%
Agency Commission & Marketing(9.4)(10.9)(2.3)(0.4)(0.1)(23.0)(16.4)41%
Content(3.2)(3.9)(0.6)(0.2)(0.2)(8.1)(7.2)14%
Other(4.5)(6.3)(0.4)(0.5)(2.2)(13.8)(13.6)1%
Total Costs(42.9)(82.2)(10.1)(2.8)(4.4)(142.4)(128.9)10%
Operating EBITDA
1
8.822.00.41.6(2.8)30.128.94%
NZ IFRS 16 Adjustments(3.7)(4.1)(0.2)(0.1)(0.1)(8.2)(7.1)16%
EBITDA (pre NZ IFRS 16)
2
5.117.90.21.5(2.9)21.821.80%
EBITDA (pre NZ IFRS 16)
2
Margin %10%17%2%35%-13%14%-1 ppt
Cost pools that relate to
multiple divisions have
been allocated based on
revenue, geography and
headcount.
Other Revenue in2020
includes $8.6 million (net)
of Government wage
subsidy.
1.Operating results presented include the impact of standard NZ IFRS 16, however exclude NZ IFRS 16 "one-offs" andexceptionalitems to allow for a like for like comparison between 2021 and 2021 financial
years.Please refer to pages 33-34ofthis resultspresentation for a detailed reconciliation.Operating and statutory results include $8.6 million (net) of Covid-19government wagesubsidy received in H1 2020.
2.EBITDA is a non-GAAP measure equivalent to Operating EBITDA but excluding NZ IFRS 16 "one-offs" andexceptionalitems.
Note: Totals may not sum due to rounding
2020 DIVISIONAL PERFORMANCE
33
6 MONTHS ENDED 30 JUNE 2021
$ million
Operating Results
excl. NZ IFRS 16
NZ IFRS 16
Adjustments
Operating Results
incl. NZ IFRS 16
Exceptional and
Other Items
Per Financial
Statements
Segment revenue
170.6
-
170.6
-
170.6
Other revenue
1.8
-
1.8
0.62.4
Total revenue
172.5
-
172.5
0.6173.0
Expenses
(150.6)
8.2
(142.4)
(0.7)(143.1)
EBITDA
21.8
8.2
30.1
(0.1)29.9
Depreciation and amortisation
(9.3)
(5.9)
(15.3)
-(15.3)
EBIT
12.5
2.3
14.8
(0.1)14.7
Share of loss of JVs
-
-
-
(0.4)(0.4)
Impairment of assets
-
-
-
(2.6)(2.6)
Net interest expense
(1.3)
(2.6)
(3.9)
-
(3.9)
Net profit/(loss) before tax
11.2
(0.3)
10.9
(3.1)
7.8
Tax
(3.1)
-
(3.1)
0.8
(2.3)
Net profit/(loss) after tax
8.1
(0.3)
7.8
(2.2)5.6
RECONCILIATION OF OPERATING RESULTS
TO FINANCIAL STATEMENTS
Note: Totals may not sum due to rounding
34
6 MONTHS ENDED 30 JUNE 2020
$ million
Operating Results
excl. NZ IFRS 16
NZ IFRS 16
Adjustments
Operating Results
incl. NZ IFRS 16
Exceptional and
Other Items
Per Financial
Statements
Segment revenue
147.3
-
147.3-147.3
Other revenue
1
10.5
-
10.52.9
1
13.4
Total revenue
157.8
-
157.82.9160.7
Expenses
(136.0)
7.1
(128.9)(8.6)(137.5)
EBITDA
21.8
7.1
28.9(5.7)23.2
Depreciation and amortisation
(8.7)
(6.3)
(15.0)-(15.0)
EBIT
13.2
0.7
13.9(5.7)8.2
Net interest expense
(1.6)
(2.3)
(4.0)-(4.0)
Net profit/(loss) before tax
11.5
(1.6)
9.9(5.8)4.2
Tax
(3.1)
-
(3.1)1.9(1.2)
Net profit/(loss) before tax
8.4
(1.6)
6.8(3.8)3.0
1.$1.5 million of this revenue relates to the accounting treatment of rent concessions received as a direct result of Covid-19 which, under an NZ IFRS16 practical expedient provision, has been classified as other
revenue. $1.4m of this revenue relates to the Government wages subsidy(WS)that was received for employees who were made redundant.
2.This table is restated from that in last year's presentation with the reclassification of the WS that was originally netted against redundancy costs.
Note: Totals may not sum due to rounding
RECONCILIATION OF OPERATING RESULTS
TO FINANCIAL STATEMENTS
35
DISCLAIMER
The information in this presentation is of a general nature and does not constitute
financial product advice, investment advice, legal, financial, tax or any other
recommendation or advice. This presentation constitutes summary information
only, and you should not rely on it in isolation from the full detail set out in NZME’s
Consolidated Financial Statements for the half year ended 30 June 2021.
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.
The Group adopted NZ IFRS16 Leases on 1 January 2019. Operating results as
stated throughout this presentation refer to results including the adjustments for
the adoption of NZ IFRS16 and prior to exceptional items. Please refer to pages
33-34 of this presentation for a detailed reconciliation to these results excluding
NZ IFRS 16 adjustments and to the statutory results.
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) give any warranty or representation
(express or implied) as to the accuracy, completeness or reliability of the
information contained in it nor take any responsibility for it. The information in this
presentation has not been, and will not be, independently verified or audited.
---
For the six months ended 30 June 2021
CONSOLIDATED
INTERIM FINANCIAL
S TAT EMEN T S
NZME Limited
KEEPING
KIWIS IN
THE KNOW.
Chairman's and Chief Executive Officer's Report
4
Directors' Statement
6
Consolidated Interim Income Statement
7
Consolidated Interim Statement of Comprehensive Income
8
Consolidated Interim Balance Sheet
9
Consolidated Interim Statement of Changes in Equity
10
Consolidated Interim Statement of Cash Flows
11
Notes to the Consolidated Interim Financial Statements*
Basis of Preparation
12
Group Performance
14
Operating Assets and Liabilities
19
Capital Management
23
Group Structure and Investments in Other Entities
29
Other Notes
33
Independent Auditors' Review Report
34
* In an attempt to make these financial statements easier to read, the notes to the financial statements have been
grouped into six sections; aimed at grouping items of a similar nature together. The Basis of Preparation section
presents a summary of material information and general accounting policies that are necessary to understand
the basis on which these consolidated interim financial statements have been prepared. A summary of the key
judgments and estimates is also included under the Basis of Preparation section on page 13.
CONTENTS.
Consolidated Interim Financial Statements
for the six months ended 30 June 2021 (unaudited)
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 3
CHAIRMAN AND
CHIEF EXECUTIVE REPORT.
NZME BUSINESS HAS PROVEN
IT HAS THE RESILIENCE AND
AGILITY TO PERFORM WELL.
Kia ora, and welcome to the New Zealand Media and
Entertainment (NZME) interim report for the half year
ended 30 June 2021.
The 2021 year has started strongly, but as with 2020,
it is also proving to be a year of challenges associated
with the ongoing impacts of COVID-19.
Your board, the Executive and senior leadership
having made the difficult but necessary decisions to
protect the business from the worst of the revenue
impacts of Covid-19, have provided a strong platform
for 2021 and beyond.
Across the economy, New Zealand’s many
commercial sectors are steadily rebuilding their
investment in audience engagement, such that
NZME’s advertising revenues are now approaching
the levels achieved in 2019.
H1 2021 Financial Results
We are pleased to report growth in Operating Earnings
before Interest, Tax, Depreciation and Amortisation
(EBITDA) to $30.1 million for the half year. This
represents 4% growth in Operating EBITDA against the
first half of 2020 despite 2020 including $8.6 million in
government wage subsidies.
Operating revenue grew 9% in the half to $172.5 million
from $157.8 million for the corresponding half in 2020.
NZME’s Statutory Net Profit After Tax (NPAT) was $5.6
million, up 85% on the corresponding period in 2020.
Operating NPAT was $7.8 million an increase of 14% on
the 2020 half year and Operating Earnings per Share is
3.9 cents per share, up from 3.5 cents per share in the
2020 half year.
We are also pleased to advise that NZME has reached
a conditional agreement to sell its GrabOne business
to Global Marketplace New Zealand Limited (GMP) for
NZD$17.5 million (payable in cash on completion).
The sale is due to be completed no later than
31 October 2021, subject to satisfaction of the
conditions, including GMP completing its funding
arrangements. The agreement follows NZME’s
announcement in November 2020 that GrabOne was
not a core strategic focus and that opportunities to
divest the ecommerce platform would be explored.
Capital Management
Rigorous commercial discipline and a continual focus
on managing the cost base as business activity rebuilds
has improved NZME’s ongoing Capital Management
performance. Net Debt was reduced by a further $15.2
million during the half year to $18.6 million and is now
below our target leverage ratio.
NZME has been able to strengthen its Balance Sheet
during such challenging times due to a relentless focus
on its key strategic priorities supported by the guiding
principles introduced by the Board during 2020.
You will see from the detail included in this report
that growth across a number of NZME’s digital
platforms such as NZ Herald Premium, OneRoof digital
classifieds and overall digital advertising have been
the major drivers of performance to return NZME’s
earnings to growth.
The 2021 interim result once again reinforces NZME’s
position as a robust, resilient, and agile multi-media
business.
With growing mass audiences across a broad mix of
digital and traditional platforms, NZME continues to
leverage off its loyal audience base to accelerate our
digital transition across all NZME platforms.
The board is pleased to advise that given the significant
reduction in debt and based on the business outlook
and capital requirements the board has declared a fully
imputed and fully franked dividend of 3.0 cps.
It is testimony to NZME’s disciplined and rigorous
approach to Capital Management, and a determined
focus on our strategic priorities that while navigating
the extraordinary and ongoing challenges posed by
the impacts of the pandemic, NZME is in a position to
return a dividend to its shareholders for the first time
since 2018.
Continued momentum as strategic digital growth
delivers returns for shareholders.
4 NEW ZEALAND MEDIA AND ENTERTAINMENT
Barbara Chapman
Chairman
Michael Boggs
Chief Executive Officer
The board was in a position to approve and announce
a capital return to shareholders. However, given the
Covid-19 uncertainties that have emerged in the past
week, the board has chosen to pause at this time.
We will update you on the Capital Management
position further when market conditions become
clearer and the sale of GrabOne has been concluded.
Outlook
While we remain cautiously optimistic, we should all be
under no illusions that ongoing Covid-19 related issues
will continue to impact the recovery.
Given that New Zealand has moved into Level 4
lockdown over the past week, we are conscious of
the potential impacts of these events.
Our commercial partners remain wary of Covid-19
outbreaks, uncertainty over international travel
bubbles and the more recent challenges of labour
force shortages and inflationary pressures on their
cost bases.
However, it is in this environment that the NZME
business has proven it has the resilience and agility to
perform well.
We acknowledge the ongoing support of our
shareholders and thank you for the confidence you have
shown as the business continues its positive trajectory.
We would also like to express our thanks and gratitude
to all the people of NZME. Thank you for choosing
NZME to share your talents and expertise.
And especially, thank you for your commitment to the
Kiwi communities that we serve by delivering news,
information and entertainment that is world class.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 5
DIRECTORS'
STATEMENT.
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 2021,
incorporating the consolidated interim financial statements and the independent auditor's 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
and the NZX Listing Rules.
The consolidated interim financial statements for the Group as presented on pages 7 to 33 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
Barbara Chapman Carol Campbell
Chairman Director
Date: 23 August 2021
6 NEW ZEALAND MEDIA AND ENTERTAINMENT
Note
June 2021
$’000
June 2020
$’000
Revenue2.1
172,283
149,039
Finance and other income2.1
752
11,669
Total revenue and other income
2.1
173,035
160,708
Expenses from operations before finance costs, depreciation
and amortisation
(143,091)
(137, 50 0)
Depreciation and amortisation2.3.2
(15,288)
(14,997)
Finance costs2.3.2
(3,884)
(4,024)
Share of joint ventures and associates net loss after tax
(354)
-
Impairment of assets2.3.2
(2,582)
-
Profit before income tax expense7, 8 3 6
4,187
Income tax expense
(2,272)
(1,176)
Net profit after tax5,564
3,011
Profit for the period is attributable to:
Owners of the Company
5,719
3,217
Non-controlling interests
(155)
(206)
5,564
3,011
Cents
Cents
Earnings per share attributable to the ordinary
shareholders of the Company
Basic earnings per share (cents per share)2.2
2.89
1.64
Diluted earnings per share (cents per share)2.2
2.82 1.61
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 2021 (unaudited)
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 7
CONSOLIDATED INTERIM STATEMENT
OF COMPREHENSIVE INCOME.
for the six months ended 30 June 2021 (unaudited)
June 2021
$’000
June 2020
$’000
Net profit after tax
5,564
3,011
Other comprehensive income
Items that may be reclassified to profit or loss
Effective gain / (loss) on hedging instruments
260
(810)
Reclassification to profit or loss
129
(25)
Tax impact of hedging transactions
-
234
Net gain / (loss) on hedging instruments
389
(601)
Exchange differences on translation of foreign operations
(26)
(40)
Other comprehensive income / (loss) net of taxation
363
(641)
Total comprehensive income
5,927
2,370
Total comprehensive income attributable to:
Owners of the Company
6,082
2,576
Non-controlling interests
(155)
(206)
5,927
2,370
The above Consolidated Interim Statement of Comprehensive Income should be read in conjunction with the
accompanying notes.
8 NEW ZEALAND MEDIA AND ENTERTAINMENT
CONSOLIDATED INTERIM
BALANCE SHEET.
Note
June 2021
(unaudited)
$’000
December 2020
(audited)
$’000
Current assets
Cash and cash equivalents
10,948
11,560
Trade and other receivables
43,226
43,882
Inventories3.5
2,377
1,480
Derivative financial instruments
34
-
56,585
56,922
Assets classified as held for sale5.3.1
1,354
2,165
Total current assets57,9 3 9
59,087
Non-current assets
Intangible assets3.1
146,890
150,478
Property, plant and equipment3.2
29,623
34,978
Right-of-use assets3.3
7 7, 8 31
85,382
Capital work in progress3.4
2,656
2,275
Other financial assets
815
815
Equity accounted investments5.2.2
3,747
4,162
Other receivables and prepayments
955
1,079
Derivative financial instruments
29
-
Deferred tax assets
1,148
-
Total non-current assets263,694
279,169
Total assets321,633
338,256
Current liabilities
Trade and other payables
4 5,7 74
43,838
Current lease liabilities4.2.2
11,077
10,931
Derivative financial instruments
-
16
Current tax provision
1,609
1,575
58,460
56,360
Liabilities directly associated with assets classified as held for sale5.3.1
5,080
7,3 3 8
Total current liabilities63,540
63,698
Non-current liabilities
Non-current lease liabilities4.2.2
90,281
96,521
Interest bearing liabilities4.2.1
29,503
45,379
Derivative financial instruments
-
310
Deferred tax liabilities
-
260
Total non-current liabilities119,784
142,470
Total liabilities183,324
206,168
Net assets138,309
132,088
Equity
Share capital
361,758
361,758
Reserves
4,142
3,485
Retained earnings
(2 2 7, 5 6 1)
(233,280)
Total Company interest138,339
131,963
Non-controlling interests(30)
125
Total equity138,309
132,088
The above Consolidated Interim Balance Sheet should be read in conjunction with the accompanying notes.
as at 30 June 2021
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 9
CONSOLIDATED INTERIM STATEMENT
OF CHANGES IN EQUITY.
Attributable to owners of the company
Share
capital
$’000
Reserves
$’000
Retained
earnings
$’000
To t a l
$’000
Non-
controlling
interests
$’000
To t a l
Equity
$’000
Balance at 1 January 2020
360,7682,984(247,7 12)
116,040
430
116,470
Profit / (loss) for the period--3,217
3,217
(206)
3,011
Other comprehensive (loss) -(641)-
(641)
-
(641)
Total comprehensive (loss) / income
-(641)3,217
2,576
(206)
2,370
Share based payments-212-
212
-
212
Balance at 30 June 2020
360,768 2,555(244,495)
118,828
224
119,052
Balance at 1 January 2021
361,7583,485(233,280)
131,963
125
132,088
Profit / (loss) for the period--5,719
5,719
(155)
5,564
Other comprehensive income-363-
363
-
363
Total comprehensive income / (loss)
-3635,719
6,082
(155)
5,927
Share based payments-294-
294
-
294
Balance at 30 June 2021
361,7584,142(2 27, 56 1)
138,339
(30)
138,309
The above Consolidated Interim Statement of Changes in Equity should be read in conjunction with the
accompanying notes.
for the six months ended 30 June 2021 (unaudited)
10 NEW ZEALAND MEDIA AND ENTERTAINMENT
CONSOLIDATED INTERIM STATEMENT
OF CASH FLOWS.
Note
June 2021
$’000
June 2020
$’000
Cash flows from operating activities
Receipts from customers
170,681
158,514
Payments to suppliers and employees
(140,290)
(136,198)
Government grants
-
10,235
Dividends received
61
-
Interest received
20
50
Interest paid on bank facilities
(1,263)
(1,450)
Interest paid on leases
(2,604)
(2,302)
Income taxes paid
(4,720)
(1,175)
Net cash inflows from operating activities
4.3
21,885
27,674
Cash flows from investing activities
Payments for property, plant and equipment and intangible assets
(including work in progress)
(2 ,734)
(3,300)
Proceeds from sale of property, plant and equipment
1,853
-
Net cash (outflows) from investing activities(881)
(3,300)
Cash flows from financing activities
Proceeds from borrowings
10,500
4,000
Repayments of borrowings
(26,500)
(13,000)
Payments for lease liability principal
(5,616)
(4,777)
Net cash (outflows) from financing activities(21,616)
(13,777)
Net (decrease) / increase in cash and cash equivalents
(612)
10,597
Cash and cash equivalents at beginning of the period
11,560
14,416
Cash and cash equivalents at end of the period10,948
25,013
The above Consolidated Interim Statement of Cash Flows should be read in conjunction with the accompanying notes.
for the six months ended 30 June 2021 (unaudited)
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 11
The material accounting policies used in the preparation
of these consolidated interim financial statements are
generally consistent with those used in the audited
consolidated financial statements for the year ended
31 December 2020. Where there have been changes
to accounting policies or the Directors consider it
necessary to disclose an accounting policy in these
consolidated interim financial statements, accounting
policies have been included in the relevant note.
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
23 August 2021. These consolidated interim 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.
1.2.1 Comparatives
Certain prior period information has been re-presented
to ensure consistency with current year disclosures
and to provide more meaningful comparison. The prior
period information that has been re-presented is:
• In note 2.1 $1,318,795 of print other revenue
has been reclassified to external printing and
distribution.
• In note 2.1 net $2,594,855 of digital advertising
revenue has been reclassified to other revenue.
• The total wage subsidy included in finance and other
income is $9,966,184 of which $1,406,715 was offset
against redundancy costs for the period ended
30 June 2020 with the remaining $8,559,469
recorded as other income. This presentation was
changed for the consolidated financial statements
for the year ended 31 December 2020 with the
total wage subsidy restated as other income. The
comparatives information for 30 June 2020 has been
restated to be consistent with the presentation in the
annual financial statements. Note 2.1 has also been
restated to reflect this change.
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 2020.
These consolidated interim financial statements are
presented for the Group.
NOTES TO THE CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(UNAUDITED).
12 NEW ZEALAND MEDIA AND ENTERTAINMENT
1.3 SIGNIFICANT ACCOUNTING ESTIMATES
AND JUDGMENTS
The preparation of the consolidated interim financial
statements requires the use of certain significant
judgments, accounting estimates and assumptions,
including judgments, 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 2020 and are as follows:
Areas of significant accounting
estimates or judgments
Note
Determination of the number of
reportable segments
2.3.1
Assumptions and judgments used
in the impairment review of indefinite
life intangible assets
3.1.1
1.4 NEW STANDARDS AND INTERPRETATIONS
ADOPTED IN THE CURRENT PERIOD
There have been no changes to accounting policies
or new standards adopted during the period.
1.5 COVID-19
The global pandemic that was declared by the World
Health Organisation on 11 March 2020 continues to
impact the world while New Zealand remains relatively
isolated with closed borders. In the 6 months to
30 June 2021 New Zealand has experienced three
regional lockdowns, although these had little impact
on the Group's results.
The following items and amounts are included in
the 2020 comparatives in relation to Government
assistance received by NZME in response to the
pandemic:
• Government wage subsidy: the total received was
$10,235,441 which is included in the cash flow, with
$9,966,184 included in the income statement in
finance and other income. Note 2.3.2 (footnote A)
provides further detail of the treatment of the total
amount received.
• Rent concessions of $1,452,480 are included in
finance and other income in the income statement
and comprise $994,325 in respect of transmission
tower rental savings under the Government's Media
Relief package and $458,155 from various landlords.
The gain recognised in the income statement
resulted from the Group's adoption of the practical
expedient to NZ IFRS 16 where the reduction in lease
liabilities from rent concessions could be recognised
as a gain in the income statement.
The risks and uncertainty faced by the Group relate to
(and are not limited to):
• the impact of wider economic pressures in
New Zealand and globally; and
• a potential outbreak at one of the Group's facilities
warranting closure may significantly affect
operations.
On 18 August 2021 New Zealand was placed at level 4*
lockdown in response to a community Covid-19
outbreak. NZME’s core news and broadcast media
business is an essential service and continues to
operate safely under level 4* lockdown with all staff
able to, working from home. This development
highlights the uncertainty of Covid-19 impacts into the
future, but at this stage does not change the company’s
judgments or estimates.
*These levels are defined at covid19.govt.nz
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 13
2.0 GROUP PERFORMANCE
2.1 DISAGGREGATION OF REVENUE AND OTHER INCOME
Print
$’000
Radio
$’000
Digital &
e-Commerce
$’000
To t a l
$’000
For the six months ended 30 June 2021
Advertising40,27051,16830,584
122,022
Circulation and subscription35,007-5,148
40,15 5
External printing and distribution2,359--
2,359
Other1,1653974,514
6,076
Segment revenue from integrated media
and entertainment activities
78,80151,56540,246
170,612
Shared services centre
694
Events
977
Total revenue from external customers172,283
Rental income from sub-leases
190
Gain on disposal of property, plant
and equipment
(23)
Lease adjustments
100
Gain on sale of transmission site
465
Other income732
Finance income
20
Total finance and other income752
Total revenue and other income 173,035
NOTES TO THE CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
CONTINUED.
14 NEW ZEALAND MEDIA AND ENTERTAINMENT
Print
$’000
Radio
$’000
Digital &
e-Commerce
$’000
To t a l
$’000
For the six months ended 30 June 2020
Advertising35,28543,29621,724
100,305
Circulation and subscription36,473-2,437
38,910
External printing and distribution2,351--
2,351
Other1,2274454,106
5,778
Segment revenue from integrated media
and entertainment activities
75,3364 3,74128,267
147,3 4 4
Shared services centre
1,694
Events
1
Total revenue from external customers149,039
Government grants
9,966
Rental income from sub-leases
201
Lease rent concession
1,452
Other income11,619
Finance income
50
Total finance and other income11,669
Total revenue and other income 160,708
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 15
2.2 EARNINGS PER SHARE
June 2021
$’000
June 2020
$’000
Reconciliation of earnings used in calculating basic / diluted earnings per share ("EPS")
Profit attributable to owners of the parent entity
5,719
3,217
Profit attributable to owners of the parent entity used in calculating EPS
5,719
3,217
June 2021
Number
June 2020
Number
Weighted average number of shares
Weighted average number of shares for calculating basic EPS
197,570,061
196,555,998
Adjusted for calculation of diluted EPS
5,006,966
3,024,181
Weighted average number of shares in the denominator
in calculating diluted EPS
202,577,027
199,580,179
June 2021
Cents
June 2020
Cents
Basic / diluted earnings per share
Basic earnings per share (cents per share)
2.89
1.64
Diluted earnings per share (cents per share)
2.82
1.61
2.3 SEGMENT INFORMATION
2.3.1 Determination and description of segments
Significant judgment: 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 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 principal 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.
NOTES TO THE CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
CONTINUED.
16 NEW ZEALAND MEDIA AND ENTERTAINMENT
2.3.2 Segment revenues and results
The segment information provided to the Directors and Executive Team for the six months ended 30 June 2021
is as follows:
June 2021
$’000
June 2020
$’000
Revenue from external customers by channel
Print
78,801
75,336
Radio
51,565
4 3,741
Digital and e-Commerce
40,246
28,267
Segment revenue from integrated media and entertainment activities170,612
147,3 4 4
Revenue from shared services centre
694
1,694
Events
977
1
Total revenues from external customers172,283
149,039
Government grants
A
-
8,559
Rental income from sub-leases
B
190
201
Gain on disposal of property, plant and equipment
(23)
-
Expenses from operations before finance costs, depreciation, amortisation
and exceptional items
(142,390)
(128,888)
Total segment adjusted EBITDA
C
30,060
28,911
Depreciation and amortisation on owned assets
(9,345)
(8,658)
Depreciation on right-of-use assets
(5,943)
(6,339)
Total depreciation and amortisation(15,288)
(14,997)
Interest expense on bank facilities
(1,280)
(1,699)
Interest expense on leases
(2,604)
(2,325)
Total finance cost(3,884)
(4,024)
Impairment of right-of-use asset
D
(1,230)
-
Impairment of property plant and equipment
D
(1,352)
-
Total impairment of assets(2,582)
-
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 17
NOTES TO THE CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
CONTINUED.
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.
June 2021
$’000
June 2020
$’000
Interest income
20
50
Other lease adjustments
E
100
1,452
Share of joint ventures and associates net loss after tax
(354)
-
Exceptional items:
Gain on disposal of transmission site
465
-
Redundancies and associated costs
F
(292)
( 7,0 17 )
Costs in relation to one-off projects
G
(409)
(188)
Profit before tax7, 8 3 6
4,187
A
2020 Government grants relate to the wage subsidy
received from the Government in response to the
effect of Covid-19 on businesses. The total received
was $10,235,441 of which $9,966,184 is included in
finance and other income in the consolidated income
statement and in trade and other payables on the
balance sheet ($269,256) where the amount received
was in respect of employees who subsequently
left the company. For segment reporting the wage
subsidy is allocated to other income ($8,559,469),
where it related to employees who continued to work
in the business, and exceptional costs ($1,406,715),
where the subsidy related to employees who were
made redundant and who were given extended
notice period, and is offset against redundancies and
associated costs.
B
Rental income of $125,621 was received from the sub
lease of right-of-use assets (2020: $122,036).
C
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 Board.
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.
D
The Group has entered into an agreement to sub-
lease part of 2 Graham Street. The portion to be sub
let is 24.8% of the headlease which has resulted in an
impairment to the Graham Street right-of-use asset
and an impairment to property, plant and equipment
in relation to the Graham Street building fitout costs.
E
The 2021 lease adjustments primarily relate to
changes in building leases. The 2020 amount is the
rent concessions received by the group that reduced
lease liabilities by $1,452,480 with a corresponding
amount recognised within other income in the
income statement as permitted by the practical
expedient under NZ IFRS 16 in relation to Covid-19
rent concessions.
F
The redundancies and associated costs relate to the
restructuring and integration of the New Zealand
operations. The 2020 costs include the wage subsidy
offset for those employees who were given an
extended notice period.
G
The 2021 costs primarily relate to onerous contracts
and the potential sale of GrabOne. The 2020 costs
are primarily in relation to the Group's attempt to
acquire Stuff Ltd.
18 NEW ZEALAND MEDIA AND ENTERTAINMENT
3.0 OPERATING ASSETS & LIABILITIES
3.1 INTANGIBLE ASSETS
Goodwill
$’000
Software
$’000
Masthead
brands
$’000
Radio
licences
$’000
Brands
$’000
To t a l
$’000
As at 31 December 2020
Cost166,3977 7,8 0 9146,97678,47959,019
528,680
Accumulated amortisation
and impairment
(166,397)(60,366)(74,336)(47, 25 3)(29,850)
(378,202)
Net book value-17, 4 4 372,64031,2262 9,169150,478
For the period ended 30 June 2021
Opening net book amount-17,44372,64031,22629,169
150,478
Additions---25-
25
Disposals-(9)---
(9)
Transfer to assets held for sale-343---
343
Amortisation-(3,540)-(1,524)-
(5,064)
Transfers from capitalised work in
progress
-1,116-1-
1,117
Net book value-15,35372,64029,7282 9,169146,890
As at 30 June 2021
Cost166,39778,260146,97678,50559,019
529,157
Accumulated amortisation
and impairment
(166,397)(62,907)(74,336)(48,777)(29,850)
(382,267)
Net book value-
15,35372,64029,72829,169
146,890
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 19
3.1.1 Half year impairment review
Significant judgment: As disclosed in note 2.3.1 the Group has one reportable segment - being "Integrated
Media and Entertainment". The Directors have also determined that this is the only cash generating unit for
the purposes of impairment testing. In the consolidated financial statements for the year ended 31 December
2020 it was stated by Management that there were no reasonably possible changes to key assumptions
which could result in impairment. Management has conducted a review of possible impairment indicators
as at 30 June 2021 and concluded that there are no such indicators which would require a full impairment
assessment to be performed. Specifically, Management has considered the trading performance of the
Group compared to forecasts used in the impairment assessment at 31 December 2020 as well as the market
capitalisation of the Group at 30 June 2021, which has increased from 31 December 2020.
3.1.2 Software as a service
The Group has capitalised as intangible assets the
costs incurred in configuring and customising certain
suppliers’ application software in cloud computing
arrangements. The Group considered that it would
benefit from the implementation costs incurred in
relation to the cloud-based software over a number of
years and has been amortising the capitalised costs
over the years for which it believed the benefit would
be derived.
Following the publication of IFRS Interpretations
Committee (IFRIC) agenda decision on Configuration
or Customisation Costs in a Cloud Computing
Arrangement in March 2021 (ratified by the International
Accounting Standards Board (IASB) in April 2021), the
Group has commenced a review of these capitalised
costs to determine whether they may need to be
expensed or reclassified as prepayments in line with the
agenda decision.
The IFRIC concluded that costs incurred in configuring
or customising software in a cloud computing
arrangement can be recognised as intangible assets
only if the activities create an intangible asset that
the entity controls and the intangible asset meets
the recognition criteria. Costs that do not result in
intangible assets are expensed as incurred unless they
meet certain criteria where they can be treated as a
prepayment and expensed over the term of the cloud
computing arrangement.
At the time of finalising the 30 June 2021 interim
financial statements, the Group's review was still
in progress due to limited time available from the
IFRIC agenda decision to the reporting date and the
complexity of the various arrangements. The initial
review of the Group's cloud computing arrangements
has identified intangible assets requiring re-assessment
with a total cost and net book value of approximately
$9.5 million and $5.9 million, respectively. While the
final financial impact of the revised accounting policy
is still being quantified, it may be material for financial
reporting purposes. The Group expects to implement
the updated accounting policy in the second half
of the year with the full impact of the change in
accounting policy, including retrospective restatement,
reflected in the consolidated financial statements
for the year ended 31 December 2021. The change
in accounting policy may decrease intangible assets
and its associated amortisation, increase operating
expenses, and reclassify costs incurred from an
investing to an operating cash flow. Prepayments may
also be recognised as a result.
NOTES TO THE CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
CONTINUED.
20 NEW ZEALAND MEDIA AND ENTERTAINMENT
3.2 PROPERTY, PLANT AND EQUIPMENT
Freehold
land
$’000
Buildings
$’000
Leasehold
improvements
$’000
Plant and
equipment
$’000
To t a l
$’000
As at 31 December 2020
Cost or fair value2656714,727339,327
354,386
Accumulated depreciation
and impairment
-(7)(8,645)(310,756)
(319,408)
Net book amount265606,08228,57134,978
For the period ended 30 June 2021
Opening net book amount265606,08228,571
34,978
Additions---8
8
Disposals--(7)(311)
(318)
Depreciation-(1)(589)(3,691)
(4,281)
Impairment--(1,076)(276)
(1,352)
Transfers from capitalised
work in progress
--36552
588
Net book amount
265594,44624,853
29,623
As at 30 June 2021
Cost or fair value2656714,750338,277
353,359
Accumulated depreciation
and impairment
-(8)(10,304)(313,424)
(323,736)
Net book amount
265594,44624,853
29,623
3.3 RIGHT-OF-USE ASSETS
Buildings
$’000
Transmission
$’000
Vehicles
$’000
Other
$’000
To t a l
$’000
As at 31 December 2020
Net book amount
58,39925,9859944
85,382
For the period ended 30 June 2021
Additions--217-
217
Depreciation(3,853)(1,740)(346)(4)
(5,943)
Impairment of right-of-use assets (1,230)---
(1,230)
Changes in lease payments
or lease terms
(611)34(18)-
(595)
Net book amount
52,70524,279847-
7 7, 8 31
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 21
3.4 CAPITAL WORK IN PROGRESS
June 2021
$’000
As at 31 December 20202,275
Additions
2 ,15 5
Disposals
(69)
Transfers to property, plant and equipment
(588)
Transfers to intangible assets
(1,117)
As at 30 June 20212,656
Capital work in progress 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.
3.5 INVENTORIES
Inventories is predominantly the stock of newsprint held at the Ellerslie print plant and is valued at cost. The stock
of newsprint held is, on average, ten to twelve weeks' supply. The longevity of the commodity, and the short period
of time that stock is on hand, reduces the Group's risk of holding obsolete stock.
3.6 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 2021
$’000
December 2020
$’000
Total assets
321,633
338,256
(Less): intangible assets
(146,890)
(150,478)
(Less): total liabilities
(183,324)
(206,168)
Net tangible assets / (liabilities)(8,581)
(18,390)
Number of shares issued (in thousands)
1 97, 570
197, 570
Net tangible assets / (liabilities) per share($0.04)
($0.09)
NOTES TO THE CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
CONTINUED.
22 NEW ZEALAND MEDIA AND ENTERTAINMENT
4.0 CAPITAL MANAGEMENT
4.1 DIVIDENDS
4.1.1 Dividends paid
No dividends were paid by NZME Limited during the six months ended 30 June 2021.
On 23 June 2021 an inter-company dividend was paid by NZME Investments Limited, with A$9,163,691 of franking
credits attached, to NZME Limited.
4.1.2 Dividends declared after balance date
On 23 August 2021, the Board of Directors declared a fully imputed and franked dividend of 3 cents per share,
to be paid on 22 September 2021 to registered shareholders as at 10 September 2021 (total amount to be paid
$5,927,102). The dividend was approved by the Board to be paid out of profits from NZME Limited, as a standalone
legal entity, which had been specifically earmarked as being available for the declaration of the dividend and had
not been appropriated or earmarked for other purposes.
4.1.3 Franking and imputation credits
June 2021
$’000
December 2020
$’000
Imputation credits available for subsequent reporting periods based on the
New Zealand 28% tax rate for the Group
NZ$ 20,081
NZ$ 18,061
Franking credits available to the Company for subsequent reporting periods
based on the Australia 30% tax rate for the Group
A$ 9,164
A
AU$ 0
A
A
Franking credits of A$9,163,691 are now available for use by the Company following the payment of the inter-company
dividend in June (see note 4.1.1). At 31 December 2020 the Company did not have any franking credits available for
use although other entities within the Group had A$9,163,691 available that Directors expected to be available to the
Company in future periods.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 23
4.2 INTEREST BEARING LIABILITIES
4.2.1 Secured bank loans
June 2021
$’000
Bank loans
As at 31 December 2020
45,379
Cash flows
(16,000)
Amortisation of borrowing costs
124
As at 30 June 202129,503
Cash and cash equivalents
As at 31 December 2020
(11,560)
Cash flows
612
Total debt less cash and cash equivalents as at 30 June 202118,555
Capitalised borrowing costs of $497,014 (31 December 2020: $621,268) are included in the secured bank loans
balance at 30 June 2021. Capitalised borrowing costs are the costs incurred on acquiring the loan less accumulated
amortisation to 30 June 2021 with the costs being amortised over the period of the loan.
The Group is funded from a combination of its own cash reserves and NZ$100 million bilateral bank loan facilities,
which NZME refinanced on 21 November 2018 and 22 July 2020, of which $30.0 million (December 2020: $46.0
million) is drawn and $70.0 million (December 2020: $74.0 million) is undrawn as at 30 June 2021. The facility limit
will step down by $10 million from 1 July 2022 and by a further $5 million from 1 January 2023. This facility expires
on 1 July 2023.
The interest rate for the drawn facility is the BKBM plus credit margin.
The NZME bilateral facilities contain undertakings which are customary for facilities 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 31 March, 30 June, 30 September and 31 December.
The Group has complied with these covenants throughout the reporting period.
NOTES TO THE CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
CONTINUED.
24 NEW ZEALAND MEDIA AND ENTERTAINMENT
4.2.2 Lease liabilities
June 2021
$’000
As at 31 December 2020
Current lease liabilities
10,931
Non-current lease liabilities
96,521
Total lease liabilities
1 07, 4 5 2
(Add): Interest on lease liabilities
2,604
(Add): New leases
217
(Less): Adjustments
(695)
Total lease liabilities before cash payments
109,578
(Less): Interest paid on leases
(2,604)
(Less): Principal payments
(5,616)
Total cash payments
(8,220)
Total lease liabilities at 30 June 2021
101,358
Current lease liabilities
11,077
Non-current lease liabilities
90,281
Total lease liabilities at 30 June 2021
101,358
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 25
4.3 CASH FLOW INFORMATION
June 2021
$’000
June 2020
$’000
Reconciliation of cash
Cash at end of the period, as shown in the statement of cash flows, comprises:
Cash and cash equivalents
10,948
25,013
Reconciliation of net cash inflows / (outflows)
from operating activities to profit for the period:
Profit for the period
5,564
3,011
Depreciation and amortisation expense
15,288
14,997
Borrowing cost amortisation
124
96
Net loss on sale of non-current assets
23-
Gain on sale of transmission site
(465)
-
Change in current / deferred tax payable
(2,448)
1
Lease adjustments
(100)
(1,452)
Interest accrual on leases
-
23
Impairment of property plant and equipment
1,352
-
Impairment of right-of-use asset
1,230
-
Group's share of retained losses in joint ventures
and associates net of distributions received
415
-
Share based payment expense
294
212
Changes in assets and liabilities:
Trade and other receivables
1,013
13,068
Inventories
(897)
272
Prepayments
(222)
490
Trade and other payables and employee benefits
714
(3,044)
Net cash inflows from operating activities
21,885
27,674
NOTES TO THE CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
CONTINUED.
26 NEW ZEALAND MEDIA AND ENTERTAINMENT
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 (excluding leasehold improvements).
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).
4.4.2 Recognised fair value measurements
June 2021
$’000
December 2020
$’000
Recurring fair value measurements
Financial assets (Level 2)
Derivative financial instruments current assets / (current liabilities)
34
(16)
Derivative financial instruments
non-current assets / (non-current liabilities)
29
(310)
Financial assets (Level 3)
There are no financial assets carried at fair value.
Total financial assets63
(326)
Non-financial assets (Level 3)
Freehold land and buildings
Freehold land
265
265
Buildings (excluding leasehold improvements)
59
60
Total non-financial assets324
325
All fair value measurements referred to above are either level 2 or level 3 of the fair value hierarchy and there were
no transfers between levels.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 27
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.
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 2021, the
borrowing rates were determined to be between 3.0%
and 3.3% (December 2020: between 2.5% and 4.0%),
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 for its
freehold land and buildings (classified as property,
plant and equipment in note 3.2), less subsequent
depreciation for buildings, with sufficient regularity to
ensure that the carrying value of the assets is materially
consistent with their fair value. All resulting fair value
estimates for properties are included as level 3.
NOTES TO THE CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
CONTINUED.
28 NEW ZEALAND MEDIA AND ENTERTAINMENT
5.0 GROUP STRUCTURE AND INVESTMENTS IN OTHER ENTITIES
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 2021.
June 2021 June 2021
Ownership Ownership
InterestInterest
December 2020
Ownership
Interest
Name of entity
GrabOne Limited
A
100%
100%
NZME Australia Pty Limited
B
100%
100%
NZME Educational Media Limited
100%
100%
NZME Holdings Limited
100%
100%
NZME Investments Limited
100%
100%
NZME Print Limited
100%
100%
NZME Publishing Limited
100%
100%
NZME Radio Investments Limited
100%
100%
NZME Radio Limited
C
100%
100%
NZME Specialist Limited
100%
100%
The Hive Online Limited
100%
100%
New Zealand Radio Network Limited
100%
100%
The Radio Bureau Limited
100%
100%
OneRoof Limited
80%
80%
A
GrabOne Limited is classified as held for sale (see note 5.3).
B
Incorporated in, and operates in, Australia.
C
One "Kiwi Share" held by the Minister of Finance. The rights and obligations are set out in the NZME Radio constitution.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 29
NOTES TO THE CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
CONTINUED.
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:
June 2021 June 2021
Ownership Ownership
InterestInterest
December 2020
Ownership
Interest
Eveve New Zealand Limited
A
40%
40%
New Zealand Press Association Limited
A
38.82%
38.82%
Restaurant Hub Limited
A
38%
38%
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%
The Newspaper Publishers Association of New Zealand Incorporated
C
Online Media Association
C
New Zealand Media Council
C
Radio Broadcasters Association Incorporated
C
A
These entities are classified as joint ventures or associates and are accounted for using the equity method in the
consolidated financial statements.
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 financial statements.
C
These are bodies with which entities in the Group have memberships, but no ownership interest.
30 NEW ZEALAND MEDIA AND ENTERTAINMENT
5.3 ASSETS HELD FOR SALE
At 30 June 2021 GrabOne Limited is classified as held for sale and for information purposes additional disclosures
in respect of GrabOne Limited's performance are shown in note 5.3.2.
Subsequent to the balance date NZME reached a conditional agreement to sell GrabOne. See note 6.3 for details.
5.3.1 Carrying values of net assets held for sale
June 2021
$’000
Trade and other receivables
112
Intangible assets
1,007
Property, plant and equipment
189
Deferred tax asset
46
Assets classified as held for sale 1,354
Trade and other payables
5,080
Liabilities directly associated with assets classified as held for sale5,080
Net liabilities held for sale3,726
5.2.2 Equity accounted investments
June 2021 June 2021
$’000
As at 31 December 20204,162
Share of losses in joint ventures and associates
(354)
Dividends received
(61)
As at 30 June 20213,747
The equity accounted investments are not considered to be material to the Group's operations or results and
therefore no disclosures of the summarised financial information for these investments have been made.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 31
NOTES TO THE CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
CONTINUED.
5.3.2 Income statement for GrabOne Limited
June 2021
$’000
Revenue and other income
4,415
Expenses from operations before finance costs, depreciation and amortisation
(1,999)
Depreciation and amortisation
(343)
Profit before income tax expense2,073
Income tax expense
(575)
Profit after tax1,498
5.3.3 Cash flows from GrabOne Limited
June 2021
$’000
Net cash inflows from operating activities
1,335
Reconciliation of net cash inflows / (outflows) from operating activities
to profit for the year:
Profit for the year
1,498
Depreciation and amortisation expense
343
Change in current / deferred tax payable
575
Changes in assets and liabilities:
Trade and other receivables
46
Prepayments
71
Trade and other payables and employee benefits
(1,198)
Net cash inflows from operating activities1,335
32 NEW ZEALAND MEDIA AND ENTERTAINMENT
6.0 OTHER NOTES
6.1 RELATED PARTIES
The Beacon Printing & Publishing Company Limited
purchased advertising from the Group during the six
months ended 30 June 2021 totalling $624 (2020: $270)
and reimbursed $1,493 (2020: $nil) for paper used.
The Group has commitments to provide future services
(such as house advertising, occupancy space at NZME
offices, business as usual finance and human resources
support) to certain joint ventures and associates. During
the period such services were provided to Eveve New
Zealand Limited, valued at $13,996 (2020: $13,996)
and Restaurant Hub Limited, valued at $6,004 (2020:
$6,004). The outstanding balances for future services
are included in the table below, along with other
receivables and payables.
During the period the Group received advertising
revenue from The Wairoa Star Limited totalling $2,874
(2020: $1,736). The Wairoa Star Limited also purchased
other services totalling $810 (2020: $nil) from the Group.
The Group purchased services from The Wairoa Star
Limited totalling $723 (2020: $904) during the year.
June 2021
Receivables
$’000
December 2020
Receivables
$’000
June 2021
Payables
$’000
December 2020
Payables
$’000
Balances with related party
Restaurant Hub Limited
20
37
44
64
Total related party receivables
and payables
20
37
44
64
6.2 CONTINGENT LIABILITIES
The Group did not have contingent liabilities as at 30 June 2021.
6.3 SUBSEQUENT EVENTS
On 23 August 2021 NZME entered into a conditional agreement to sell GrabOne to Global Marketplace New Zealand
Limited (GMP) for $17.5 million (payable in cash on completion).
The sale is not subject to any regulatory conditions. It is conditional on no material adverse change to performance
of GrabOne occurring prior to completion, and on GMP completing funding arrangements for the acquisition by
15 October 2021.
GMP will pay NZME a break fee of $1.0 million if the funding condition is not satisfied by 15 October 2021.
The sale is expected to be completed no later than 31 October 2021.
The change to New Zealand lockdown levels is discussed in note 1.5.
The Directors are not aware of any other material events subsequent to the reporting date.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 33
Indepen den t auditor ’s r ev iew r epor t
To the shareholders of NZME Limited
Report on the consolidated interim financial statements
Our conclusion
We have reviewed the consolidated interim financialstatements of NZME Limited (the Company) and
its subsidiaries (the Group), which comprise the consolidatedinterim balance sheet as at 30 June
2021, and the consolidated interim income statement,the consolidated i
nterim statement of
comprehensive income, the consolidated interim statementof changes in equity and the consolidated
interim statement of cash flows for the six monthsended on that date, and significant accounting
policies and other explanatory information.
Based on our review, nothing has come to our attentionthat causes us to believe that the
accompanying consolidated interim financial statementsof
the Group do not present fairly, in all
material respects, the financial position of the Groupas at 30 June 2021, and its financial performance
and cash flows for the six months then ended, in accordancewith International Accounting Standard
34Interim Financial Reporting(IAS 34) and New ZealandEquivalent to International Accounting
Standard 34Interim Financial Reporting(NZ IAS 34).
Basis for conclusion
We conducted our review in accordance with the NewZealand Standard on Review Engagements
2410 (Revised)Review of Financial Statements Performedby the Independent Auditor of the Entity
(NZ SRE 2410 (Revised)). Our responsibility is furtherdescribed in theAuditor’s responsibility for the
review of the consolidated interim financial statementssection of our report.
We are independent of the Group in acco
rdance withthe relevant ethical requirements in New
Zealand relating to the audit of the annual financialstatements, and we have fulfilled our other ethical
responsibilities in accordance with these ethicalrequirements. In addition to our role as auditor, our
firm carries out other services for the Group in theareas of taxation advisory services, non-audit
assurance in accordance with Rules and Circula
tionAudit Guidelines established by the Audit Bureau
of Circulations Incorporated, agreed upon proceduresfor the benchmarking of market revenue data,
and agreed upon procedures relating to the Group’s return to the Broadcasting Standards Authority. In
addition, certain partners and employees of our firmmay subscribe to NZME services on normal terms
within the ordinary course of the trading activitiesof
the Group. These relationships and provision of
other services have not impaired our independence.
Directors’ responsibility for the consolidated interimfinancial statements
The Directors are responsible on behalf of the Companyfor the preparation and fair presentation of
these consolidated interim financial statements inaccordance with IAS 34 and NZ IAS 34 and for such
internal control as the Directo
rs determine is necessaryto enable the preparation and fair presentation
of consolidated interim financial statements thatare free from material misstatement, whether due to
fraud or error.
Pric ewaterhouseCoopers, PwC Tower , 15 Cus toms S treetWes t, Priv ate Bag 92162, Auc kland 1142 New Zealand
T: +64 9 355 8000,www.pwc.c o.nz
Indepen den t auditor ’s r ev iew r epor t
To the shareholders of NZME Limited
Report on the consolidated interim financial statements
Our conclusion
We have reviewed the consolidated interim financialstatements of NZME Limited (the Company) and
its subsidiaries (the Group), which comprise the consolidatedinterim balance sheet as at 30 June
2021, and the consolidated interim income statement,the consolidated i
nterim statement of
comprehensive income, the consolidated interim statementof changes in equity and the consolidated
interim statement of cash flows for the six monthsended on that date, and significant accounting
policies and other explanatory information.
Based on our review, nothing has come to our attentionthat causes us to believe that the
accompanying consolidated interim financial statementsof
the Group do not present fairly, in all
material respects, the financial position of the Groupas at 30 June 2021, and its financial performance
and cash flows for the six months then ended, in accordancewith International Accounting Standard
34Interim Financial Reporting(IAS 34) and New ZealandEquivalent to International Accounting
Standard 34Interim Financial Reporting(NZ IAS 34).
Basis for conclusion
We conducted our review in accordance with the NewZealand Standard on Review Engagements
2410 (Revised)Review of Financial Statements Performedby the Independent Auditor of the Entity
(NZ SRE 2410 (Revised)). Our responsibility is furtherdescribed in theAuditor’s responsibility for the
review of the consolidated interim financial statementssection of our report.
We are independent of the Group in acco
rdance withthe relevant ethical requirements in New
Zealand relating to the audit of the annual financialstatements, and we have fulfilled our other ethical
responsibilities in accordance with these ethicalrequirements. In addition to our role as auditor, our
firm carries out other services for the Group in theareas of taxation advisory services, non-audit
assurance in accordance with Rules and Circula
tionAudit Guidelines established by the Audit Bureau
of Circulations Incorporated, agreed upon proceduresfor the benchmarking of market revenue data,
and agreed upon procedures relating to the Group’s return to the Broadcasting Standards Authority. In
addition, certain partners and employees of our firmmay subscribe to NZME services on normal terms
within the ordinary course of the trading activitiesof
the Group. These relationships and provision of
other services have not impaired our independence.
Directors’ responsibility for the consolidated interimfinancial statements
The Directors are responsible on behalf of the Companyfor the preparation and fair presentation of
these consolidated interim financial statements inaccordance with IAS 34 and NZ IAS 34 and for such
internal control as the Directo
rs determine is necessaryto enable the preparation and fair presentation
of consolidated interim financial statements thatare free from material misstatement, whether due to
fraud or error.
Pric ewaterhouseCoopers, PwC Tower , 15 Cus toms S treetWes t, Priv ate Bag 92162, Auc kland 1142 New Zealand
T: +64 9 355 8000,www.pwc.c o.nz
Indepen den t auditor ’s r ev iew r epor t
To the shareholders of NZME Limited
Report on the consolidated interim financial statements
Our conclusion
We have reviewed the consolidated interim financialstatements of NZME Limited (the Company) and
its subsidiaries (the Group), which comprise the consolidatedinterim balance sheet as at 30 June
2021, and the consolidated interim income statement,the consolidated i
nterim statement of
comprehensive income, the consolidated interim statementof changes in equity and the consolidated
interim statement of cash flows for the six monthsended on that date, and significant accounting
policies and other explanatory information.
Based on our review, nothing has come to our attentionthat causes us to believe that the
accompanying consolidated interim financial statementsof
the Group do not present fairly, in all
material respects, the financial position of the Groupas at 30 June 2021, and its financial performance
and cash flows for the six months then ended, in accordancewith International Accounting Standard
34Interim Financial Reporting(IAS 34) and New ZealandEquivalent to International Accounting
Standard 34Interim Financial Reporting(NZ IAS 34).
Basis for conclusion
We conducted our review in accordance with the NewZealand Standard on Review Engagements
2410 (Revised)Review of Financial Statements Performedby the Independent Auditor of the Entity
(NZ SRE 2410 (Revised)). Our responsibility is furtherdescribed in theAuditor’s responsibility for the
review of the consolidated interim financial statementssection of our report.
We are independent of the Group in acco
rdance withthe relevant ethical requirements in New
Zealand relating to the audit of the annual financialstatements, and we have fulfilled our other ethical
responsibilities in accordance with these ethicalrequirements. In addition to our role as auditor, our
firm carries out other services for the Group in theareas of taxation advisory services, non-audit
assurance in accordance with Rules and Circula
tionAudit Guidelines established by the Audit Bureau
of Circulations Incorporated, agreed upon proceduresfor the benchmarking of market revenue data,
and agreed upon procedures relating to the Group’s return to the Broadcasting Standards Authority. In
addition, certain partners and employees of our firmmay subscribe to NZME services on normal terms
within the ordinary course of the trading activitiesof
the Group. These relationships and provision of
other services have not impaired our independence.
Directors’ responsibility for the consolidated interimfinancial statements
The Directors are responsible on behalf of the Companyfor the preparation and fair presentation of
these consolidated interim financial statements inaccordance with IAS 34 and NZ IAS 34 and for such
internal control as the Directo
rs determine is necessaryto enable the preparation and fair presentation
of consolidated interim financial statements thatare free from material misstatement, whether due to
fraud or error.
Pric ewaterhouseCoopers, PwC Tower , 15 Cus toms S treetWes t, Priv ate Bag 92162, Auc kland 1142 New Zealand
T: +64 9 355 8000,www.pwc.c o.nz
Auditor’s responsibility for the review of the consolidated interim financial statements
Our responsibility is to express a conclusion on the consolidated interim financial statements based on
our review. NZ SRE 2410 (Revised) 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 IAS 34 and NZ IAS 34. A review of
consolidated interim financial statements in accordance with NZ SRE 2410 (Revised) is a limited
assurance engagement. We perform 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 and International Standards on
Auditing (New Zealand) and consequently does not enable us to obtain assurance that we might
identify in an audit. Accordingly, we do not express an audit opinion on these consolidated interim
financial statements.
Who we report to
This report is made solely to the Company’s, 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.
The engagement partner on the review resulting in this independent auditor’s review report is Lisa
Crooke.
For and on behalf of:
Chartered AccountantsAuckland
23 August 2021
PwC2
34 NEW ZEALAND MEDIA AND ENTERTAINMENT
Indepen den t auditor ’s r ev iew r epor t
To the shareholders of NZME Limited
Report on the consolidated interim financial statements
Our conclusion
We have reviewed the consolidated interim financialstatements of NZME Limited (the Company) and
its subsidiaries (the Group), which comprise the consolidatedinterim balance sheet as at 30 June
2021, and the consolidated interim income statement,the consolidated i
nterim statement of
comprehensive income, the consolidated interim statementof changes in equity and the consolidated
interim statement of cash flows for the six monthsended on that date, and significant accounting
policies and other explanatory information.
Based on our review, nothing has come to our attentionthat causes us to believe that the
accompanying consolidated interim financial statementsof
the Group do not present fairly, in all
material respects, the financial position of the Groupas at 30 June 2021, and its financial performance
and cash flows for the six months then ended, in accordancewith International Accounting Standard
34Interim Financial Reporting(IAS 34) and New ZealandEquivalent to International Accounting
Standard 34Interim Financial Reporting(NZ IAS 34).
Basis for conclusion
We conducted our review in accordance with the NewZealand Standard on Review Engagements
2410 (Revised)Review of Financial Statements Performedby the Independent Auditor of the Entity
(NZ SRE 2410 (Revised)). Our responsibility is furtherdescribed in theAuditor’s responsibility for the
review of the consolidated interim financial statementssection of our report.
We are independent of the Group in acco
rdance withthe relevant ethical requirements in New
Zealand relating to the audit of the annual financialstatements, and we have fulfilled our other ethical
responsibilities in accordance with these ethicalrequirements. In addition to our role as auditor, our
firm carries out other services for the Group in theareas of taxation advisory services, non-audit
assurance in accordance with Rules and Circula
tionAudit Guidelines established by the Audit Bureau
of Circulations Incorporated, agreed upon proceduresfor the benchmarking of market revenue data,
and agreed upon procedures relating to the Group’s return to the Broadcasting Standards Authority. In
addition, certain partners and employees of our firmmay subscribe to NZME services on normal terms
within the ordinary course of the trading activitiesof
the Group. These relationships and provision of
other services have not impaired our independence.
Directors’ responsibility for the consolidated interimfinancial statements
The Directors are responsible on behalf of the Companyfor the preparation and fair presentation of
these consolidated interim financial statements inaccordance with IAS 34 and NZ IAS 34 and for such
internal control as the Directo
rs determine is necessaryto enable the preparation and fair presentation
of consolidated interim financial statements thatare free from material misstatement, whether due to
fraud or error.
Pric ewaterhouseCoopers, PwC Tower , 15 Cus toms S treetWes t, Priv ate Bag 92162, Auc kland 1142 New Zealand
T: +64 9 355 8000,www.pwc.c o.nz
Auditor’s responsibility for the review of the consolidated interim financial statements
Our responsibility is to express a conclusion on the consolidated interim financial statements based on
our review. NZ SRE 2410 (Revised) 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 IAS 34 and NZ IAS 34. A review of
consolidated interim financial statements in accordance with NZ SRE 2410 (Revised) is a limited
assurance engagement. We perform 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 and International Standards on
Auditing (New Zealand) and consequently does not enable us to obtain assurance that we might
identify in an audit. Accordingly, we do not express an audit opinion on these consolidated interim
financial statements.
Who we report to
This report is made solely to the Company’s, 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.
The engagement partner on the review resulting in this independent auditor’s review report is Lisa
Crooke.
For and on behalf of:
Chartered AccountantsAuckland
23 August 2021
PwC2
CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2021 35
TUKUTUKU KŌRERO
Education Gazette
NEW ZEALAND
---
Distribution Notice
Please note: all cash amounts in this form should be provided to 8 decimal places
Section 1: Issuer information
Name of issuer NZME Limited
Financial product name/description Ordinary shares
NZX ticker code NZM
ISIN (If unknown, check on NZX
website)
NZNZME0001S0
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year Quarterly
Half Year X Special
DRP applies
Record date 10/09/2021
Ex-Date (one business day before the
Record Date)
09/09/2021
Payment date (and allotment date for
DRP)
22/09/2021
Total monies associated with the
distribution
1
$ 5,927,101.83000000
Source of distribution (for example,
retained earnings)
Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.04166667
Gross taxable amount
3
$0.04166667
Total cash distribution
4
$0.03000000
Excluded amount (applicable to listed
PIEs)
$
Supplementary distribution amount $0.00529412
Section 3: Imputation credits and Resident Withholding Tax
5
Is the distribution imputed Fully imputed X
Partial imputation
No imputation
1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.
If fully or partially imputed, please
state imputation rate as % applied
6
28%
Imputation tax credits per financial
product
$0.01166667
Resident Withholding Tax per
financial product
$0.00208333
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
%
Start date and end date for
determining market price for DRP
Date strike price to be announced (if
not available at this time)
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
DRP strike price per financial product
$
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
Section 5: Authority for this announcement
Name of person
authorised to make
this announcement
Michael Boggs
Contact person for this
announcement
Allison Whitney
Contact phone number 027 479 0697
Contact email address allison.whitney@nzme.co.nz
Date of release through MAP
24/08/2021
6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.
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.
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