Huzzah! It’s reporting season. So here’s a selection of results from some of the country’s major media and tech companies.
TVNZ
TVNZ’s interim result for the six months ended 31 December 2014 delivered an after tax net profit of $19.8 million, down from the $20.8 million posted a year earlier.
In its official statement, TVNZ attributed this dip to a difficult market, which saw advertising revenue drop from $177.5 million to $171.9 million. Operating revenue was down from $202 million in 2013 to $196 million for the six months ended December 2014.
“Growth in digital media and a stronger share of television advertising revenue failed to fully offset the impact of a weak advertising environment, and together with year on year changes in cost phasing resulted in a drop in the after tax net profit …”
With the increase in streaming, digital media revenue rose 34 percent compared with the same period in the previous year (it didn’t specify how much that was, but in its FY2014 report last year it was up from $10 million to $13 million).
TVNZ said the strong Kiwi dollar over the course of last year also played a role in diminishing profits.
“The revaluation of currency hedging held at 31 December 2014, noted in the financial report as an unrealised net foreign exchange loss of $3.6 million, had a negative impact due to the strength of the NZ dollar,” the report said.
Despite the dip in ad revenue, TVNZ’s share of overall television advertising spend increased from 60.9 percent to 61.6 percent and the company also shouted about having all 20 of the top 20 most-watched shows in the country in its lineup.
Sky
In Sky’s annual report for 2014, chairman Peter Macourt admitted that the market for television advertising was a “challenging” but that Sky had still enjoyed another strong period.
- Check out the annual results here.
“We reported an increase of 3.7 percent to $70.5 million, this is another all-time high and a superb effort given market conditions,” said Macourt at the time.
And it seems this is set to continue, with the interim results for 2015 again showing gains, with a net profit in 2015’s interim period of $92.5 million compared to last year’s $82.1 million. 
However, the NBR’s Chris Keall wrote that Sky may be getting too comfortable in its “golden handcuffs” after raking it in from its satellite decoder business, saying perhaps Sky’s board might not be motivated to invest in new media platforms.
While revenue and profit was up, the total number of subscribers dipped to 856,348 from the 865,055 it had six months ago. Sky’s household penetration also dipped from 48.7 percent to 48.3 percent.
Fairfax
Fairfax media’s chief executive Greg Hywood also mentioned the c word—challenging—to Stuff in regard to print advertising, saying its New Zealand advertising income fell 6.2 percent during the six months before December 28 2014, compared to the previous half year.
- Check out the annual report here.
“Strong sales of real estate and motoring advertisements were more than cancelled out by weak retail and employment advertising, the company said.
The operating profit of the New Zealand business fell 18.8 percent on the same time last year, which it out down to the transition to shared printing arrangements with NZME and investment in digital product development and marketing. However, Hywood told Stuff the “digital momentum” was pleasing, with digital income growing by a quarter, although that’s off a low base.
As a whole, Fairfax reported a net profit of A$26.3 million ($27.2 million), which is down from A$193.8m a year earlier. However, the profit was affected by several significant one-off costs including a A$54.7 million charge for restructuring and redundancies and an A$19.4 million write-down. Those costs were partly offset by a A$16.3 million tax benefit. Ignoring those costs, the profit was down 11 percent at A$83 million.
MediaWorks
Radio has helped MediaWorks return to profitability after receivership, according to the Auckland-based company’s financial statements from BusinessDesk, with a profit of $12 million in the 10 months and 22 days ending 30 September 2014. Sales were $246.9 million while costs were $221.8 million over the trading period. The broadcaster’s former holding company, GR Media Holdings, previously reported a net loss of $90 million for the year ending 31 August 2012, before being tipped into receivership in June 2013.
The company’s investments earnings before interest, tax, depreciation and amortisation was roughly $50 million in the abbreviated period, a MediaWorks spokesperson said in the financial statement. “MWL’s radio business was the strongest contributor, the performance of the television business was healthy, and digital grew well through the year.”
MediaWorks spent $7.4 million buying new radio broadcast licenses to expand its national coverage last year. The company also announced plans to merge its television, radio and digital newsrooms as part of a reorganisation across the business.
“This is the first financial report for MediaWorks since the group’s lenders completed their recapitalisation of the company in November 2013. That reduced the company’s debt levels to about $100 million from more than $700 million beforehand. The transaction put a value of $285 million on MediaWorks, according to the Overseas Investment Office’s August approval of the deal.”
Chief executive Mark Weldon, who was appointed in August last year, said in a statement the company ended the 2014 financial year in “ruddy financial health” and with “strong financial prospects”.
“Alongside our new strategic direction, and last year’s major structural reorganisation, this provides an excellent foundation for growing a thriving, integrated media business,” he says. “2015 will see the company’s performance benefit from major investments in television content, digital infrastructure, and the acquisition of new radio frequencies,” Weldon said. ” We have announced new relationships with Sky and Radio Tarana, and will look to form other strategic partnerships where they benefit the business and its shareholders.”
APN/NZME
APN’s full year results from 2014 show a profit increase of 27 percent with net profits after tax and before exceptional items sitting at $75 million, according to a market announcement report. Operating expenses were down 2.4 percent from $1.4 million to $1.36 million.
- Check the report here
“Earnings before interest, tax, depreciation and amortisation from continuing operations and before exceptional items was up one percent to $164.1 million, with revenue from continuing operations up three per cent to $843.2 million.”
Following the integration of APN’s New Zealand businesses and the brand launch of NZME, APN also reported on the performance of its combined New Zealand businesses for the first time.
“Overall revenues were down six percent year on year on a local currency basis to $410.2 m while EBITDA was down 11 percent to $75.1 million. This is slightly above the NZME Business Update forecast provided to the market in November 2014. Revenue trends improved during the year; H2 revenue was flat on the prior year on a like for like basis. Reported H2 earnings reflect investment in new initiatives and integration costs. Underlying H2 trading performance has improved across all businesses compared to H1.”
The report also showed that NZME saw a revenue decline of four percent (after adjusting for the impact of the sale of the South Island and Wellington newspaper titles) with an improved H2 where revenue was down two percent. EBITDA was down 15 percent for the year.
However, the report showed that NZME radio performed well with revenue up five percent to $116.8 million and EBITDA up seven percent on a local currency basis, “This growth was driven by strong direct revenues which grew eight percent year on year”.
“In December 2014, the New Zealand government auctioned a number of radio licences previously being leased to radio broadcasters. NZME invested $7 million in securing licences. While this impacted the cash generation target for the year, this investment was essential to ensure transmission to all major cities in the country and consolidate the position of NZME’s NewstalkZB as the country’s number one radio station.”
NZME saw its eCommerce (GrabOne) revenue decline by four percent, with EBITDA down 22 percent, both on a local currency basis. “This downward trend has recently been reversed due to the staged release of an upgraded operating platform making deals more accessible across platforms. NZME eCommerce’s performance improved in the fourth quarter following its strategy to diversify revenues and more closely align with NZME’s other businesses.”
Snakk
Snakk Media released its Q3 sales recently, showing record-breaking results with a 47 percent growth on year-on-year sales of $3.3 million from 1 October to 31 Dec 2014 compared to the previous year’s third quarter sales of $2.3 million.
Snakk Group chief executive Mark Ryan said: “The final three months of the calendar year have traditionally been our strongest, and it’s pleasing to report that this is our largest sales quarter ever.”
The company recently consolidated its ranks by bringing investing in a number of senior hires. Among these was ex-Google executive Bob Mohan, who was brought in as Snakk’s first chief financial officer. However, Mohan left the company shortly thereafter. Ryan told the NBR that Mohan did not fit in at Snakk after more than ten years at Google.
Like many tech start-ups, Snakk has in its early years not yet been profitable. Last year in June, the company’s preliminary results for the year ending March 2014 showed a net loss after tax of $1.8 million. However, according to its financial report released in June 2014, “While the loss increased 58 percent year-on-year, revenues almost doubled. Snakk is continuing to invest to scale the business for growth, and begins its 2015 financial year strongly with more than $NZ6.3 million in cash and cash equivalents to fund its expansion plans.”
“Our losses are slowing down, while our revenue continues to grow,” said the chief executive at the time. “From day one, we’ve been saying that this a long-term play, in which we aim to grow the business by capitalising on the increase in mobile ad spend.”
And Ryan says that the company will continue this trend of investing in technology in an effort to create scope for further growth.
“We will continue to introduce more partnerships and technology innovations to our product portfolio, a strategy that has kept us a step ahead of the competition. While the company has $2.86 million in cash and cash equivalents as at December 2014, we intend on raising more funds in the next few months to allow us to continue to significantly scale up the company.”
Spark
Spark had a big year last year, after its rebranding from Telecom, which according to managing director Simon Moutter in its annual report, “was driven by the fundamental realisation that our customers wanted us to change, and that our future success depends on them”. He said the company spent $101 million in “restructuring related expenses”.
- Check out the report here.
“Spark New Zealand’s net earnings after tax for FY14 was $460 million, an increase of $222 million, or 93.3 percent, from FY13.
This included net earnings from discontinued operations of $137 million following the sale of the AAPT business.”
Spark released its half year results on February 19, 2015 which showed that its revenue growth was down 2.7 percent from $1.8 billion in the first half of 2014, to $1.79 billion for the first half of this year. EBITDA earnings were down 3.5 percent from $452 million to $436 million, with net earnings so far at $147 million, unchanged from the first half results from 2014.
Capital expenditure was also up by 53 percent from $266 million to $407 million.
Mobile revenues grew by $12 million, or 2.4 percent, with 108,000 additional connections. Its IT services revenue grew by $19 million, or 6.9 percent, in line with the growing trend towards Cloud computing and supported by an investment in data centres and the acquisition of Appserv in July 2014.
