TVNZ: had a better year than last

Television New Zealand today reported underlying earnings (before reorganisation costs, programme amortisation revision, interest, financial instruments, share of associates and tax) of $12.9 million for the financial year to 30 June 2010, a $2.8 million (28%) increase on the previous financial year.
 
TVNZ Chief Executive Rick Ellis said today that the company would be paying a dividend to the Shareholder (the government) of $4.87 million, an uplift on the previous year dividend of $1.47 million.
 
Mr Ellis said the performance of the company, in the middle of the media industry’s greatest international downturn, had been very pleasing.
 
“The hard work of management and staff to respond rapidly to the downturn in advertising revenue, to reduce costs and maintain advertising market share have produced this great result.”
 
TVNZ reported total revenue of $355.3 million and advertising revenue of $284.3 million, a decline of $14.1 million (4.7%) on the prior year.  Share of television advertising revenue held constant at 60.6%, according to PriceWaterhouse Coopers.
 
Total operating costs were $342.4 million, a reduction of $32.3 million (8.6%) on the prior year, reflecting the company’s disciplined approach to managing costs. This approach included a number of redundancies.
 
“Despite the challenging year, the company continued the implementation of a new sales go-to-market approach, committed to key strategic digital infrastructure capital investments and progressed transformational projects focused on delivering ongoing efficiency gains to the company’s operations.”
 
He said highlights of the year included TVNZ programmes making up 20 of the top 20 most watched by New Zealanders, the launch of the company’s first digital pay TV channel, TVNZ Heartland, on the SKY TV platform, extending the highly acclaimed TVNZ Ondemand service to the Sony PlayStation 3 and launching a successful iPhone news application.
 
TVNZ is reporting an after tax loss of $26.0 million as a result of two non- recurring accounting adjustments. They are a change to the expensing of programme stock to accelerate the period over which the cost is recognised that has resulted in a one-off charge of $26.8 million, and the impact of the Government’s recently announced changes to income tax legislation including tax depreciation of buildings which resulted in a one-off charge of $14.2 million. These non-cash adjustments were excluded from the results when the Board declared the dividend from this year’s operating results. After tax profit, excluding adjustments, was $6.96 million and the dividend is 70% ($4.87 million) of that.
 
Mr Ellis said continued structural changes in the industry and uncertainty over the economy would still challenge all media companies in FY2011.
 
“While TVNZ has adapted to the new digital era better than most, the economic recovery remains patchy. The company needs to continue to be mindful of costs but also not be afraid to continue with its strategy of transformation and diversification.
 
“The company has come through the recession well and is cautiously optimistic about the year ahead.”
 
The Annual Report is expected to be tabled in Parliament in early October.