Just notes...
Financial Overview
2024 Performance: NZME reported a net loss of NZ$16 million, primarily due to a NZ$24 million non-cash impairment on publishing assets. Despite this, operating revenue increased by 2% to NZ$345.9 million, and operating EBITDA was NZ$54.2 million, slightly down from the previous year.
Digital Growth: The company's digital initiatives are gaining traction:
OneRoof, NZME's real estate platform, saw a 51% increase in digital revenue, contributing 61% to its total revenue.
Digital audio revenue grew by 32%, and podcast revenue surged by 67%.
Digital subscription revenue for publishing increased by 10%, with a 16% rise in digital subscription uptake year-on-year.
Dividend: Despite the loss, NZME declared a fully imputed final dividend of 6.0 cents per share, bringing the total dividends for 2024 to 9.0 cents per share.
⚠️ Challenges and Risks
Governance Turmoil: Activist investor James Grenon, holding nearly 10% of NZME, is leading a campaign to overhaul the board, criticizing executive compensation and advocating for strategic shifts. This has led to resignations and heightened tensions within the company.
Regulatory Scrutiny: The New Zealand Takeovers Panel is investigating whether Grenon and his allies acted in concert, which could have implications for shareholding and control dynamics.
Operational Restructuring: In response to financial pressures, NZME has undertaken significant restructuring, including job cuts and the closure of community newspapers, raising concerns about editorial capacity and public perception.
✅ Investment Considerations
Digital Transformation: NZME's focus on digital platforms, particularly OneRoof and digital audio, positions it well for future growth in these segments.
Dividend Yield: The company maintains a consistent dividend payout, which may appeal to income-focused investors.
Market Position: As a leading media company in New Zealand, NZME has a substantial audience reach, which can be leveraged for advertising and subscription revenue.
Final Thoughts
Investing in NZME offers exposure to a company undergoing significant digital transformation with promising growth in certain segments. However, the current governance issues and recent financial setbacks introduce a level of uncertainty. Potential investors should weigh the prospects of digital growth against the risks associated with corporate restructuring and market challenges.
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