TVNZ nearly triples dividend as it returns to profit on better ad sales
by Paul McBeth
Aug. 26 (BusinessDesk) – State-owned broadcaster Television New Zealand Ltd. will pay a dividend to the government of $13.8 million, nearly 6.5 times net earnings for the latest financial year, and nearly trebling last year's payout.
The Auckland-based national broadcaster made a net profit of $2.1 million in the 12 months ended June 30, compared to a loss of $26 million a year earlier, as it lifted ad revenue 6.4% to $377.9 million.
That result was worse than it might have been, with the broadcaster obliged to take a $17.7 million impairment charge on its Hybrid Television Services joint venture, which has struggled to bring TiVo, a box that lets viewers record and store programmes, into Austrasia.
That charge is up from $14.8 million in the first half of the year.
“The results for the past year confirm the growing strength of television in the modern media mix,” chief executive Rick Ellis said in a statement. “As New Zealand’s leading television and digital media company, TVNZ will continue its strategy of transformation and diversification.”
The failure of the TiVo business comes as Sky Network Television Ltd. today boost net profit almost 17% as it managed to get lift subscriber numbers to its own pre-programmed box, MySky, to 280,000 from 190,000 a year ago.
TVNZ has been cutting costs in recent years as the government demands a better return on investment, and the broadcaster will shut down its TVNZ7 operation in June next year when the funding runs out.
The broadcaster plans to push for more commercial programming on its flagship channels One and TV2, and cut unprofitable and uneconomic business in the upcoming year, according to its latest Statement of Intent.
It also wants greater funding from New Zealand On Air for commercial programmes, such as drama, comedy, entertainment and reality TV. Those genres already get half of the funding through that government agency.
In April, TVNZ said it will sell its 36-year-old production facilities at Avalon in Lower Hutt, meaning almost all of its operations will be Auckland-based.