TVNZ reports 164% increase in UNDERLYING Earnings

26 August 2011

TVNZ reports 164% increase in UNDERLYING Earnings

Television New Zealand today reported underlying earnings1 of $31.8 million for the financial year ended 30 June 2011, a $19.8 million (164%) increase on the previous financial year.

TVNZ Chief Executive Rick Ellis said today that the company would be paying a dividend to the Shareholder of $13.8 million, an uplift on the previous year's dividend of $4.9 million.

TVNZ reported total revenue of $377.9 million, an increase of $22.6 million (6.4%) on the prior year.

Advertising revenue was $302.7 million, $18.4 million (6.5%) higher than prior year. TVNZ increased its share of television advertising revenue to 63%2 from 61% in the prior year and secured 80.6% of the total market growth for the 12 months ended 30 June 2011. (Market growth for the 12 months to June 2011 was 5.1%).

"Our 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."

Rick Ellis said the performance of the company had been a significant achievement.

"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," he said.

During the year the company launched two new channels, free-to-air channel U, and a second pay channel, TVNZ Kidzone 24 on SKY.

"The company completed the implementation of a new multi-million dollar digital infrastructure, enabling it to reach more New Zealanders in more ways with its leading local and international content."

TVNZ earned a number of top industry awards for content, business innovation and creativity. It won the CAANZ Media Brand of the Year 2011 Award, and was named one of New Zealand's top three most attractive employers by Randstad.

"The Christchurch earthquakes and Pike River mine disaster brought home the vital importance of TVNZ's news service to the country. I want to pay special tribute to our hardworking staff who delivered unprecedented news coverage that kept New Zealand informed during these difficult times," said Rick Ellis.

TVNZ reported an after tax profit of $2.1 million, compared with an after tax loss of $26 million for the prior year. TVNZ has impaired its investment in Hybrid Television Services (ANZ) Pty Ltd, recognised a share of operating losses and made provision for future operating costs of the company. This has resulted in a one-off charge of $17.7 million being recognised.

"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."

Excluding this one-off adjustment, the normalised after tax profit was $19.7 million, a $12.8 million (184%) increase on the normalised after tax profit for the prior year. This non-cash adjustment was excluded from the results when the Board declared the dividend from this year's operating results.3

Rick Ellis said that although the business environment remains challenging TVNZ is confident about the future.

"As New Zealand's leading television and digital media company, TVNZ will continue its strategy of transformation and diversification."

The Annual Report is expected to be tabled in Parliament in early October.

ENDS

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