Release Date: February 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NZME Ltd (NZSE:NZM, Financial) reported operating free cash flow of $17.3 million, a 17% increase from the previous year.
- The company declared a fully imputed final dividend of $0.06 per share, bringing the total normal dividends for the year to $0.09 per share.
- NZME Ltd's radio market revenue share grew to 43.1%, the highest since measurement began in 2016.
- Digital audio revenue increased by 23%, showcasing strong growth momentum.
- OneRoof digital listings revenue grew by 5% despite a challenging real estate market.
Negative Points
- Operating revenue decreased by 5% to $346.6 million due to a weak advertising market.
- Net profit after tax was $12.2 million, significantly impacted by the revenue decline.
- Digital publishing advertising revenue was weaker, partially offset by digital subscription revenue growth.
- Print publishing advertising revenue reduced, contributing to a 6% decline in total advertising revenue.
- The EBITDA for 2023 was $56.2 million, 13% lower than the previous year.
Q & A Highlights
Highlights of NZME Ltd (NZSE:NZM) Earnings Call
Q: What was the performance in reader revenues like in January and February, and what level of EBITDA growth was the business generating year-on-year in these months?
A: Reader revenue showed continued growth year-on-year. Digital subscription growth continued into the New Year, and overall profitability is expected to improve with increasing revenues.
Q: Are there consolidation opportunities for OneRoof that would help realize value more quickly? Would you consider offering a minority stake in OneRoof?
A: While there are no substantial consolidation opportunities currently focused on, the Board is open to opportunities that help accelerate OneRoof's business. Currently, strong organic growth is being delivered.
Q: Can you remind me of the current facility limit and if there is any intention to upsize it?
A: The current facility is $50 million, and there are no plans to change that at the moment. The capital management policy ensures debt remains within 0.5 to 1x EBITDA.
Q: Can we expect to see yield improvements in corporate digital reader revenues as early as the first half of 2024?
A: Yes, yield improvements in corporate digital reader revenues are expected in the first half of 2024.
Q: Was digital advertising in publishing showing signs of growth in January and February?
A: Yes, digital advertising in publishing showed signs of growth in January and February.
Q: How did BusinessDesk and Viva perform during the period, and what are their prospects?
A: Both BusinessDesk and Viva delivered strong growth and continue to perform well.
Q: Was Cyclone Gabriel a significant factor in the real estate market's performance, and has the market recovered?
A: Cyclone Gabriel had some impact, but the market has now recovered to its prior state.
Q: What is the outlook for the radio market, especially considering forward bookings?
A: The radio market is benefiting from reductions in broadcast TV, and this trend is expected to accelerate. Confidence in the radio market remains strong.
Q: What are the prospects for OneRoof in terms of profitability and market share?
A: OneRoof achieved breakeven in the second half of last year and is now focused on profitability. The business is competitive and leveraging NZME's resources effectively.
Q: What is the strategy for the print business given its profitability and long-term trends?
A: The print business is expected to continue well past 2029, with a key decision point around the print plant lease in 2029. The focus remains on growing digital subscriptions while maintaining a profitable print business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
