NZME (NZM) H2 2024 earnings summary

Executive summary

• Operating revenue rose 2% to $345.9m year-over-year, driven by digital transformation and strong performance from OneRoof and digital audio, despite a tough advertising market.

• Statutory net loss after tax was $16m, impacted by a $24m non-cash impairment of intangible assets in the Publishing unit.

• Operating EBITDA declined 4% to $54.2m due to challenging trading in Q2 and Q3, but Q4 showed improvement.

• OneRoof delivered 31% revenue growth, a $4m EBITDA improvement, and achieved the number one online audience.

• Final dividend of 6.0cps declared, payable March 2025, consistent with last year.

Financial highlights

• Operating NPAT was $12.1m, down from $14.1m year-over-year.

• Cash flow from operations was $11.3m, down from $17.3m in 2023.

• Net debt increased to $24.1m, within the target leverage range.

• Digital revenue reached $103m, up from $95m in 2023, now representing 31% of total advertising revenue.

• Operating EPS was 6.5cps, down from 7.7cps.

Outlook and guidance

• Early 2025 trading is positive, with Q1 advertising revenue expected to grow 4% year-over-year (adjusted for community newspaper exit).

• OneRoof digital revenue up 30% year-on-year in Jan-Feb 2025.

• Lower capital investment planned for 2025, with continued focus on cost control and margin improvement.

• Market conditions are improving, with business confidence at 10-year highs and house prices expected to recover.

• Improved operating results expected in 2025, subject to continued market recovery.