On the back of some solid advertising revenue increases, TVNZ has reported underlying earnings of $32 million for the financial year ended 30 June 2011, a $19.8 million or 164 percent increase on the previous financial year. And across town, Sky also announced impressive financial results and subscriber numbers.
TVNZ's total revenue was $378 million, an increase of $23 million (6.4 percent), and ad revenue was $303 million, $18 million or 6.5 percent higher than the year before. It increased its share of ad revenue to 63 percent from 61 percent and secured 81 percent of the market's total growth of five percent. So, given TVNZ's slashing of agency commission from 20 to ten percent at the start of this year, this shows the rumoured—but always fairly unlikely—agency boycotts obviously never eventuated. TVNZ spokesperson Georgie Hills says this proves the decision has had no adverse effects.
And TVNZ chief executive Rick Ellis says the advertising revenue and share growth are a testament to the strength of our programming and our strategy of Inspiring New Zealanders on Every Screen.
"19 of the 20 most watched programmes appeared on TVNZ channels," he says. “... The results for the past year confirm the growing strength of television in the modern media mix. In addition, TVNZ’s growing portfolio of digital channels and digital media solutions was being embraced by clients and their advertising agency partners."
TVNZ reported an after tax profit of $2.1 million, compared with an after tax loss of $26 million for the prior year. It has impaired its investment in Hybrid Television Services (ANZ) Pty Ltd, recognised a share of operating losses and made provision for future operating costs, which resulted in a one-off charge of $17.7 million being recognised. This is largely made up of the $14.8 million writedown on TiVO outlined in its half yearly results.
“While the investment in Hybrid has not produced the expected returns, TVNZ is committed to Hybrid’s ongoing support of the TiVo PVR product in Australia and New Zealand," he says.
Excluding this one-off adjustment, the normalised after tax profit was $19.7 million, a $12.8 million (184 percent) increase on the normalised after tax profit for the prior year. A dividend of $13.8 million would be paid out to the state, an increase of $4.9 million on last year.
Its total assets dropped $228 million from $259 million the year before, debt was reduced by $26 million and shareholders' equity remained fairly static on $154 million, although this was down down from $192 million 18 months earlier.
During the year the company launched two new channels, free-to-air channel U, and a second pay channel, TVNZ Kidzone 24, which joined Heartland on Sky. But, much to the chagrin of those who believes its role as a public broadcaster is no more, it's set to say goodbye to digital-only channels TVNZ6 and 7 after the government funding was cut.
Speaking of Sky, its net profits rose 17 percent to $120 million, with revenue of $797 million for the year to June 30, up seven percent year on year.
There was an 11.3 percent increase in revenue from wholesale customers (Sky has recently signed a three-year renewal of its wholesale agreement with Telecom) and subscriber numbers increased by 27,024 to a record 829,421, more than 35 percent of them with MySky.
“Sky has had another excellent year, continuing to show gains across all key areas including growth in subscriber numbers, increased average revenue earned per subscriber and a continued reduction in churn," says John Fellet, Sky chief executive. "We have also been pleased with the performance of our free-to-air channel, Prime, which has continued to increase its share of advertising revenue."