TVNZ ekes out 1.4 percent lift in annual profit, ahead of forecast, misses revenue target

Television New Zealand, the state-owned broadcaster, lifted annual profit 1.4 percent, slightly ahead of its Statement of Intent forecast, though missed its target for revenue.

Net profit rose to $14.4 million in the 12 months ended June 30, from $14.2 million a year earlier, and ahead of the $14 million forecast in the SOI, the Auckland-based company said in a statement. Underlying earnings fell 5.7 percent to $26.3 million, and 5.1 percent was trimmed from operating expenses to $335.8 million.

Total revenue dropped 5.2 percent to $362.1 million, with the broadcaster losing $19.7 million in government funding for the TVNZ7 channel. That meant it missed the $372.8 million forecast in the 2013 SOI. The broadcaster anticipates revenue of $357.3 million in the 2014 financial year.

Television advertising revenue declined 2.1 percent to $311.1 million. Online revenue jumped 21 percent to $9.9 million.

"Consumer demand for greater viewing choice and flexibility has been the driver for this (gain in online revenue), boosted by the launch of our OnDemand app for Apple devices in February, which immediately translated into a step change in viewership," chief executive Kevin Kenrick said in a statement.

Ericsson ConsumerLab research published last week found about 28 percent of New Zealanders watch TV and video content on tablet devices, 30 percent watch streaming video on smartphones and 6 percent view live TV shows on smartphones.

TVNZ's board didn't declare a dividend, having forecast a $7.7 million return in the statement of intent.

In a separate statement on the $10.6 million sale of property to SkyCity Entertainment Group, the company said it reached an agreement with shareholding ministers Bill English and Craig Foss to forgo dividends and allow TVNZ to spend the proceeds on refurbishing its Victoria St West building and upgrading its online technology.

TVNZ's two-year upgrade of its online services comes as major rival, MediaWorks NZ, undergoes a change of ownership. The privately-owned broadcaster's lenders will take control at the end of the month, having tipped MediaWorks into receivership in June.

That restructure transfers the broadcaster's assets to a new company chaired by Australian businessman Rod McGeoch. Former Eyeworks Touchdown boss Julie Christie, best known in New Zealand for a string of reality TV series, and ex-PBL director Martin Dalgleish will join him on the board.

(BusinessDesk)