Half Year 2026 NZME Ltd Earnings Call Transcript
Key Points
- NZME Ltd (ASX:NZM) returned to revenue growth with operating revenue up 1% to $167 million, driven by strong Audio performance.
- Operating EBITDA increased 11% to $26.5 million, reflecting positive operating leverage from disciplined cost management.
- Statutory NPAT improved from a $0.4 million loss to a $6.6 million profit, with free cash flow up $5.1 million to $7.3 million.
- Net debt reduced by $13.9 million to $19.4 million, lowering leverage to 0.4 times EBITDA, well below the target range.
- Audio revenue grew 8%, with digital audio up 16%, and the business delivered 15 consecutive months of year-on-year audio revenue growth.
- Digital Publishing EBITDA grew 11% to $6.3 million, with digital subscriptions up 6% to 250,000 and 70% now digital-only.
- OneRoof EBITDA grew 9% despite soft Auckland market, with regional listings revenue up 13% and app users up 54%.
- The company declared a fully imputed interim dividend of $0.03 per share, maintaining shareholder returns.
- A new cost-out program is expected to deliver $4 million in annualized savings from Q4 2026 and a further $3 million in H1 2027.
- The 10-year iHeartRadio partnership extension provides long-term certainty for digital audio strategy.
- NZME Ltd (ASX:NZM) faces a challenging trading environment with weak domestic demand and soft advertising conditions across consumer categories.
- OneRoof revenue performance was below expectations, particularly in Auckland, where properties take longer to sell and vendors remain cautious.
- Print revenue continues to decline, with print subscriber volumes down 9% and print advertising down 5% in Publishing.
- Digital advertising revenue fell 4% due to a deliberate reduction in low-margin third-party performance marketing, which also impacted overall revenue.
- Reader revenue declined 3% as print subscriber losses outpaced digital subscription growth.
- The company expects the trading environment to remain volatile, with consumer confidence still soft and discretionary spending constrained.
- OneRoof faces aggressive pricing from competitor Trade Me, which could pressure market share and pricing power.
- The Google content supply agreement concludes in December 2026, and renewal is uncertain, posing a risk to future revenue.
- The new print plant investment of up to $15 million will not deliver savings until 2028, with payback expected within three years of becoming operational.
- IFRS 16 accounting changes from the Central Auckland lease will reduce reported NPAT in the medium term.
Good morning and welcome to New Zealand Media and Entertainment's 2026 half year results webcast. My name is Kelly Gunn and I'm the GM for Communications at NZME. I'll be facilitating all questions at the end of today's presentation. Presenting on the call today is Michael Boggs, NZME's Chief Executive Officer and Jo Hempstead, NZME's Chief Financial Officer.
Following the presentation today, we will open the webcast to shareholders and analysts for questions. If you wish to ask a question, you can click raise hand at the bottom of your screen. I'll then prompt you to unmute your microphone so you can speak. Please note that only participants joining from the webcast can ask a question. If you have any technical issues, please use the chat function on your screen and one of our team will help.
I will now hand over to our CEO, Michael Boggs.
Good morning, everyone. Thanks for joining us today. As Kelly said, I'm joined by our Chief
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