Chair John Anderson sees growth in NZME.'s digital offerings ahead of listing

Friday 10th October 2014

Veteran company director John Anderson sees future growth in the digital offerings of NZME., the New Zealand media operations of Australia's APN News & Media, after being appointed chairman ahead of the company's planned listing on the NZX this year.

Anderson has been appointed "chairman designate" for a new company which will own the recently rebranded NZME., which bundled The New Zealand Herald, The Radio Network and GrabOne under one banner, and ultimately take the company public. Sydney-based parent APN is expected to hold on to a 40 percent stake of the business.

The traditional media industry is under pressure, as businesses are yet to figure out how to make money from online news, while audiences and advertisers are increasingly difficult to capture. Publishers of The New Zealand Herald have flagged a paywall for their online content, possibly next year, as they look to further monetise the paper's online readership.

"Over time I can see growth in the market," Anderson told BusinessDesk. "In an evolving environment like we've got, there are ways to make money online, in other areas, not necessarily in the media, and you can translate that to some extent I believe over time."

Paywalls weren't the only way to make money from the news, although Anderson said that decision was in the company's future, while strengthening NZME.'s digital operations across its range of media outlets would bring in cash.

"We're not just in print," Anderson said. "Everything is moving digital and of course NZME. has the radio side, the GrabOne side, as well as the classified print side going digital."

NZME. has finished presentations to banks and will issue a request for proposal to manage its initial public offer shortly with the intention to list on the NZX by the end of this year.

"We haven't knuckled down exact timing, but it will be done this year," Anderson said. "I wouldn't put it as a big growth opportunity. There is a dividend stock on one side, and there's a growth aspect on the other side, as things do grow."

An initial public offer of 60 percent of NZME. would generate some A$308.6 million of gross proceeds, based on the carrying value of the unit. Of that, some A$169.4 million would be raised through the float, and a further NZ$150 million from a 'note payable' as a result of restructuring the New Zealand unit, according to the offer documents APN released when it was attempting to raise US$250 million in an unsecured note offer to American investors. It has since abandoned the US notes plan, after they were assigned a sub-investment, or junk grade rating, by the major three rating agencies.

In August, APN's New Zealand unit reported an 8 percent decline in first-half revenue to A$201.6 million, and a 9 percent fall in earnings before interest, tax, depreciation and amortisation to A$34.6 million, reflecting the sale of South Island and Wellington community newspapers, and several magazine titles, including the weekly Listener magazine, to Germany’s Bauer Media.

"The balance sheet is going to be strong - they've still got 40 percent and we're still doing a lot of things together," Anderson said. "It's still part of the family on one side and it gives the New Zealand public the chance to get exposure to media stocks."

Anderson, the former head of ANZ National Bank and National Bank of NZ, currently heads the boards of the Steel & Tube Holdings and National Property Trust, is deputy chair of Turners & Growers and a director of the Commonwealth Bank of Australia. He was previously the chair of Television New Zealand, the NZ Venture Investment Fund and PGG Wrightson.

Separately, NZME. announced former Tower chief financial officer Michael Boggs will join the media company in the same role, it said in a statement.

“My experience is focused on managing large scale and diverse assets to create clear analysis and strategy for growth,” Boggs said. “At Tower I lead a strategic financial review which culminated in the development of a five-year growth strategy."

Shares of dual listed-APN last traded at 82.3 Australian cents on the ASX and were unchanged at 90 cents on the NZX.

BusinessDesk.co.nz

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