NZME LIMITED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
KEEPING
KIWIS
IN THE
KNOW
2 NEW ZEALAND MEDIA AND ENTERTAINMENT
C O N T E N T S
ANNUAL REPORT 2023 3
C O N T E N T S
66. Consolidated Financial Statements
121. Independent Auditor’s Report
27. Climate Related Disclosures
10. Financial Commentary
50. Corporate Governance
60. Statutory Disclosures
48. The Executive Team
44. 2023 Awards
46. The Board
126. Directory
14. Our Sustainability Commitment
4 . 2023 Financial Results Summary
5. Division - Key Metrics
6. Chairman’s and CEO’s Report
This annual report is dated 20 February 2024
and is signed on behalf of the Board of Directors by:
Barbara Chapman
Carol Campbell
Chairman
Director
4 NEW ZEALAND MEDIA AND ENTERTAINMENT
2023 FINANCIAL
RESULTS
SUMMARY
$346.6m
$56.2m
Operating Revenue1
2022 $364.6m
Operating EBITDA1
2022 $64.7m
$12.2m
Statutory NPAT
2022 $22.7m
$14.1m
Operating NPAT1
2022 $23.3m
7.7cps
Operating EPS1
2022 12.1cps
6.0 cps
Final Dividend
Payable on 20 March 2024
$17.3m
Operating Free Cash flows
2023 $14.8m
$18.0m
Net Debt
2022 $17.5m
1 Operating results presented are non-GAAP measures that include the impact of NZ IFRS 16, however, exclude exceptional
items to allow for a like for like comparison between 2022 and 2023 financial years. Please refer to pages 38-39 the NZME
2023 Full Year Results Presentation for a detailed reconciliation.
ANNUAL REPORT 2023 5
DIVISION
- KEY METRICS
10
Audio brands
1.9 million
#1 Station
Terrestrial
audience1
and breakfast show
Newstalk ZB1
1.3 million
Digital audience2
37.5%
43.1%
NZME radio brand
audience market share1
NZME radio revenue
market share for 20233
22
2.3 million
222,000
Print publications across
New Zealand
Digital Audience 4
Subscribers across
print and digital6
1.8 million
55.7%
47.2%
Print audience 5
NZME print readership
market share 4
NZME print advertising
revenue market share
for 20237
12
889,000
5%
Real estate
publications
OneRoof
brand audience 4
Increase in total digital
revenue year-on-year6
606,000
89%
Average Q4 monthly
audience on
oneroof.co.nz5
Of Nationwide residential
for-sale real estate
listings8
43.6%
Listings upgrades
in Auckland6
O
I
D
U
A
G
N
I
H
S
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B
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F
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1 GfK RAM, Commercial Radio, Total NZ 4/2023, M-S 12mn-12mn, M-F 6am-9am, Share %, Cume 000, AP10+. 2 Adswizz
monthly reach Jan-Dec 2023 (monthly average). 3 Radio Broadcasters Association Radio Market Report, rolling 12-month
average to 31 December 2023. Note: excludes independent broadcasters, contra revenue, and digital audio. 4 Nielsen
Consumer Media Insights Service (CMI), Q4 22 – Q3 23 Online Fused Nov 2023 People 15+. OneRoof reach of property
visitors (property visitors=unduplicated audience of oneroof.co.nz, trademe.co.nz/property, homes.co.nz & realestate.
co.nz). 5 Nielsen Online Ratings as of Dec 2023 AP15+ (excludes APP). 6 NZME Analysis. 7 PwC NPA quarterly performance
comparison report, Q1 2023 – Q4 2023. Note: report excludes any publishers that are not part of the NPA. 8 OneRoof’s
listings as a percentage of residential for-sale real estate listings on trademe.co.nz. Dec 2023 monthly average.
6 NEW ZEALAND MEDIA AND ENTERTAINMENT
CHAIRMAN AND
CEO REPORT
We are pleased to present New Zealand Media and Entertainment’s Annual
Report for the year ended 31 December 2023
In 2023 we continued our focus on achieving the targets
we set for our three year strategy in 2020. We are pleased
to report that we achieved the majority of our targets albeit
a number of the financial based targets were impacted by
the tough economic environment in 2023.
Like many companies, NZME’s financial results in 2023
were impacted by challenging operating conditions both
in New Zealand and globally. Business confidence was
low for the majority of the year with confidence moving
to positive in the last quarter. Consumer confidence
continues to remain at subdued levels. In addition,
inflationary pressures and higher interest rates made for
a tough operating environment for many New Zealand
businesses. Given this environment, NZME has performed
well, adapting to the challenges and continuing to develop
its digital products alongside its radio and print platforms.
Financial Results – Highlights
For 2023, the operating EBITDA1 was $56.2 million which
was 13% lower than 2022. Statutory net profit after tax was
$12.2 million which was lower than last year’s $22.7 million.
As a result the operating earnings per share was 7.7 cents.
The tough operating environment impacted the demand
for advertising, which together with a weaker real estate
market resulted in NZME’s Operating Revenue and other
income being 5% lower than last year.
Our continued focus on disciplined cost management
and adapting our business resulted in a 3% reduction in
operating expenses.
Our relentless focus on growing our digital business has
led to digital revenues exceeding $100 million per year,
or 29% of total revenue. We continue to drive this growth
through our central objective to deliver on our digital-led
strategy across our three key platforms – Audio, Publishing
and OneRoof.
1 Operating results presented are non-GAAP measures that include
the impact of NZ IFRS 16, however, exclude exceptional items to
allow for a like for like comparison between 2022 and 2023 financial
years. Please refer to pages 38-39 of the results presentation for
a detailed reconciliation. 2 Radio Broadcasters Association Radio
Market Report, rolling 12-month average to 31 December 2023.
Note: excludes independent broadcasters, contra revenue, and
digital audio. 3 Nielsen CMI Fused Q4 22 – Q3 23 Nov 2023 AP15+
(Total NZME = monthly NZME print, weekly NIMS, Weekly Radio
GfK Fused S3 2023 and monthly online fused. Publishing Digital
= nzh.co.nz & driven.co.nz. Publishing Print = monthly print excl
Real Estate. OneRoof Print = Real Estate sections.)
NEW ZEALAND’S
LEADING AUDIO
COMPANY
Create New Zealand’s
best local audio
content
Grow broadcast and
digital reach
Grow market revenue
share and digital
revenue
NEW ZEALAND’S
HERALD
The #1 News brand for
all New Zealanders
Subscriber
first
Be a safe, scalable
destination for
advertisers
YOUR COMPLETE
PROPERTY
DESTINATION
Strengthen core
residential listings
business
Be indispensable
to agents
Expand the portfolio
KEY ACHIEVEMENTS
Our audience and nationwide
reach remains extremely strong
- every month, NZME engages
with more than 3.5 million people
across New Zealand, reaching
85% of Kiwis aged 15+.
Audio
While radio advertising revenue
declined by 2% off the back of a
6% overall market decline, NZME’s
radio market revenue share2
reached 43.1% - the highest since
measurement began in 2016.
Despite difficult market
conditions, NZME continued to
grow its digital audio business,
growing digital audio by 23%.
This reflects the strength of
NZME’s leading digital audio
platform – iHeartRadio and NZME’s
podcast network, with podcast
revenues growing 54%. NZME has
also led New Zealand’s podcast
rankings for 29 consecutive
months, with average monthly
downloads over 10 times that of
our closest competitor.
with our strong entertainment
brands supports continued
improvement of our audio
profitability.
Publishing
We continued to evolve our
Publishing division in 2023,
investing in our digital publishing
platform and a new ‘business
of journalism’ operating model.
This saw us focus on growing
our digital news business further,
which is now a sustainable
and profitable part of NZME,
supporting journalism for future
generations.
Our print business complements
our digital news business and
under a new operating model
we are confident that print will
deliver strong cash flows for
NZME well into the future.
Publishing subscriptions reached
222,000 in 2023 – up from
209,000 the year prior. This
includes 130,000 digital only
subscriptions which is up from
113,000 last year.
NZME is gaining real traction on
its leading podcast position in
New Zealand which will drive
future digital revenue growth.
Our strong position in news,
politics and business together
OneRoof
The OneRoof business is now
demonstrating its potential as
it continues to grow revenue,
reaching the scale that will
be the tipping point for it to
ANNUAL REPORT 2023 7
be profitable. We continue to
reduce the audience gap with the
number one player in market.
OneRoof grew its digital revenue
by 5% year on year, despite a
12% reduction in new residential
real estate listings coming to
market. This was achieved
through improved listing upgrade
conversion rates across the
country and improved yield.
With a clear business strategy
in place to grow OneRoof, it is
well set up for strong delivery
of revenue and profitability
into the future.
Evolved our Key Strategic
Priorities
In November 2023 NZME
released its revised three-year
strategic priorities across its
Audio, Publishing and OneRoof
divisions. The strategy is
digital-led and focused on
delivering superior returns
across the business.
The three new strategic
priorities are to be:
• Number One in Audio
• New Zealand’s leading
news destination
•
Your essential property
platform
8 NEW ZEALAND MEDIA AND ENTERTAINMENT
NUMBER ONE IN AUDIO
NEW ZEALAND'S LEADING
NEWS DESTINATION
YOUR ESSENTIAL
PROPERTY PLATFORM
Create the most
listened to and
loved content
Deliver customer
solutions to grow
revenue share
Grow podcast
engagement and
monetisation
Scalable digital
audience and
advertising news
platform
Expert journalism
that grows subscriber
lifetime value
High quality and
efficient print
business
Superior listings
experience and
performance
Grow listings
revenue
Accelerate non-
listings product
revenue
Number One in Audio
NZME’s Audio business includes
its many radio brands, digital
audio platform iHeartRadio,
and its high-performing podcast
network.
The newly released strategic
priority to be ‘Number One in
Audio’ includes a strong focus
on three key pillars:
• Create the most listened
to and loved content
•
Deliver customer solutions
to grow revenue share
• Grow podcast engagement
and monetisation
New Zealand’s leading news
destination
NZME’s Publishing business
covers its digital platforms
including NZ Herald Premium,
BusinessDesk and VIVA Premium,
as well as its national, regional
and community print products.
The newly released strategic
priority to be ‘New Zealand’s
leading news destination’
includes a strong focus on three
key pillars to deliver:
•
•
Scalable digital audience
and advertising news
platform
Expert journalism that grows
subscriber lifetime value
Your essential property
platform
The OneRoof division includes
the OneRoof digital property
platform together with all of
NZME’s dedicated real estate
publications.
OneRoof's newly released
strategic priority is to be ‘Your
essential property platform’, and
includes a strong focus on three
key pillars:
•
Superior listings experience
and performance
• Grow listings revenue
•
Accelerate non listings
product revenue
We believe this renewed strategy
sets us apart from our competitors
and it is focused on delivering
strong returns for shareholders.
Our Audio business has
significant opportunities that
are already improving our
profitability, in Publishing we
are currently investing in our
digital publishing platform and
a new business of journalism
operating model, and OneRoof
is at a tipping point and we
are confident that significant
shareholder value can be created
from the very large profit pool
that it operates in.
Capital Management
• High quality and efficient
print business
NZME is focused on delivering
value for shareholders and we are
pleased to have made distributions
to shareholders over the past year
of $16.5 million comprising of:
•
•
2022 final dividend of
6 cents per share; total
$11.0 million.
Interim dividend of 3 cents
per share; total $5.5 million.
Net debt remained at the low end
of the target leverage range at
$18.0 million, $0.5 million higher
than last year.
The Board remains committed
to returning excess capital to
shareholders, subject to the
operating environment and
investment opportunities.
Outlook
There are positive signs for
2024, with January and February
advertising revenues pacing
ahead of last year, business
and consumer confidence on
upward trends, and a recovering
real estate market. However,
sentiment among market
commentators remains one of
economic uncertainty and no
clear consensus on the outlook.
Despite the challenging
environment, we are pleased with
the continued growth in digital
across our Audio, Publishing
and OneRoof businesses, and
we are well-positioned to deliver
improved results as market
conditions improve.
ANNUAL REPORT 2023 9
We remain conscious of
continued cost pressures across
our business and will focus
on substantially mitigating
these through disciplined cost
controls.
NZME prides itself on our high
value relationships with our
3.5 million strong audience3,
as well as the huge number of
advertising customers across
multiple platforms, reaching 85%
of the New Zealand population
across a month.
We believe our revised strategy
sets NZME up for strong delivery
of revenue and profitability
growth, and our balance sheet
is strong when compared to
local competitors.
The Annual Shareholders’
Meeting is scheduled for 11 April
2024, and we look forward to
providing a progress update on
our strategic priorities.
Conclusion
Our central key objective is to
relentlessly pursue a digital led
strategy across our three key
platforms. Globally, we know
these digital centric businesses
are valued at much higher
multiples than print peers.
This digital first focus will set us
apart from our competitors and
drive returns for shareholders.
However, we are also focused
on maximising the Print revenues
that will continue to provide
substantial earnings well into
the future.
Thank you to the NZME Board,
the Executive team and team
of 1,200 at NZME for their hard
work, loyalty and commitment
during what was another
challenging year. NZME is well
set up for future growth, and
with signs of improvement in the
market, we are confident 2024
will be a successful year. Thank
you to you all for continuing to
deliver value for our people, our
audiences, clients, customers,
and our shareholders.
Barbara Chapman
Chairman
Michael Boggs
Chief Executive Officer
10 NEW ZEALAND MEDIA AND ENTERTAINMENT
FINANCIAL
COMMENTARY
Financial Results
Balance Sheet and Cash Flow
Given the difficult operating and economic
environment, Statutory NPAT for 2023 was
$12.2 million, compared to last year’s $22.7 million.
Operating EBITDA1 was $56.2 million in 2023 which
was 13% below last year. Operating Revenue1 was
5% lower in 2023 at $346.6 million, compared to
the 2022 operating revenue of $364.6 million.
Operating Expenses1 were $290.4 million,
a reduction of 3% due to:
-
-
People costs were 3% lower than 2022 as
a result of improved efficiencies and lower
incentive payments offsetting inflationary
pressure on salaries and wages.
Print and Distribution costs were 1% lower year
on year with higher distribution costs offset by
lower volumes.
- Content costs were 4% higher due to increased
activity and increased licence costs.
- Other expenses were flat overall with lower
IT costs offsetting other cost increases.
NZME’s Operating NPAT1 for 2023 was $14.1 million,
resulting in an operating earnings per share of
7.7 cents.
Net debt increased by $0.5 million to $18.0 million
as at 31 December 2023 with strong operating cash
flows despite lower earnings, offset by distributions
to shareholders.
Working capital excluding cash increased by
$0.2 million as a result of:
-
-
-
Lower receivables and payables reflecting
the impact of reduced operating revenues
Inventories decreasing due to reduced
paper stock.
Reducing tax payable due to lower earnings.
Cash flows from operations for the year was
$41.5 million, which is higher than 2022 due to a
reduction in the amount of tax paid during the year.
Capital expenditure was $11.0 million, a similar level
to 2022 ensuring the continued development of
key digital products in order to progress our digital
transformation.
Plant property and equipment, intangibles
and other non-current assets decreased due to
depreciation and amortisation exceeding capital
expenditure. Right of Use assets reduced in
line with the reduction in lease liabilities as the
terms reduce.
1 Operating results presented are non-GAAP measures that include the impact of NZ IFRS 16, however, exclude exceptional
items to allow for a like for like comparison between 2022 and 2023 financial years. Please refer to pages 38-39 the NZME
2023 Full Year Results Presentation for a detailed reconciliation.
ANNUAL REPORT 2023 11
AUDIO
The audio division encompasses NZME’s radio
brands as well as its digital audio platform
iHeartRadio.
Total audio revenue was $113.6 million in 2023
which was similar to 2022 despite what has been
a weaker trading environment. Pleasingly digital
audio revenue continued to grow and was 23%
higher than last year at $8.4 million.
NZME grew radio revenue market share to
43.1% year on year, with audience share
remaining similar at 37.5%. Newstalk ZB
continues to be New Zealand’s number
one commercial radio station supported
by leading entertainment audio brands.
Podcasting is an important part of the audio
growth strategy at NZME, and we have led the
New Zealand podcast ranker for 29 consecutive
months, with the average monthly downloads
over ten times its closest competitor.
RADIO BROADCAST CONSUMED DIGITALLY
NZME has a diverse digital audio content
offering including digital streaming of its radio
stations, catch up radio podcasts, original
owned podcasts, partner podcasts and
international content available on iHeartRadio.
NZME won six of the eight premier awards
at the 2023 NZ Radio Awards including
NewstalkZB for Network Station of the Year,
ZM’s Fletch, Vaughan and Hayley for Best Music
Network Breakfast Show, and Newstalk ZB’s
Mike Hosking for Broadcaster of the Year.
Digital Audio Revenue $m
-50% CAGR
)
m
$
(
e
u
n
e
v
e
R
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
-
2019
2020
2021
2022
2023
AUDIO PLATFORM
RANK
PODCAST
REPRESENTATIVE3
2023 2022
%
CHANGE
DIGITAL ONLY AUDIO CONTENT
1
2
3
NZME
rova (MediaWorks)
LISTNR (SCA)
7.3
0.6
0.4
5.4
0.5
0.2
35%
28%
76%
3 Triton NZ Podranker, Sales Representation category
12 NEW ZEALAND MEDIA AND ENTERTAINMENT
G
N
I
H
S
I
L
B
U
P
The Publishing division
includes NZME’s digital
news and journalism products
including NZ Herald and
BusinessDesk together with
its print publications.
Total publishing revenue was
$209.6 million in 2023 which
was 7% lower than 2022.
Reader revenue was down
4% with digital subscription
revenue 4% higher offset by
lower print reader revenue.
Digital only subscriptions
increased from 113,000 last
year to 130,000 while total
publishing subscriptions
reached 220,000 in 2023
– up from 209,000 the
year prior.
Publishing advertising
revenue was impacted by the
tough operating environment
with print advertising
revenue down 13% and digital
advertising revenue 8% lower
than last year.
During the year the Publishing
division was re-organised
into separate digital and
print units creating a truly
digital first model. Content
is produced for digital
publication first and then
separately curated for the
various print publications.
Source: NZME Analysis
Digital Publishing Revenue $m
-6% CAGR -85% CAGR
Advertising revenue
Reader revenue
)
m
$
(
e
u
n
e
v
e
R
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0
250
200
150
100
50
0
2019
2020
2021
2022
2023
Subscriptions Mix
Digital Entitled
Print Only
Digital Only
0
2
c
e
D
1
2
r
a
M
1
2
n
u
J
1
2
p
e
S
1
2
c
e
D
2
2
r
a
M
2
2
n
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J
2
2
p
e
S
2
2
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D
3
2
r
a
M
3
2
n
u
J
3
2
p
e
S
3
2
c
e
D
PUBLISHING
DIVISION
L
A
T
I
G
D
I
I
G
N
H
S
I
L
B
U
P
Content produced
for digital publishing
Revenue from
subscribers and
advertisers
Costs include all
content costs
exclusing specific
print related curation
and production
B
U
H
T
N
I
R
P
Content from digital
journalism curated
into print publications
Revenue from print
subscribers and
advertisers
Costs include only
those required to curate
digital content into print
products and print and
distribution costs
ANNUAL REPORT 2023 13
ONEROOF
The OneRoof division includes the OneRoof
digital property platform together with all of
NZME’s dedicated real estate publications.
Digital OneRoof Revenue $m
-40% CAGR
12.0
10.0
)
m
$
(
e
u
n
e
v
e
R
8.0
6.0
4.0
2.0
-
2019
2020
2021
2022
2023
OneRoof Digital Residential for-sale
Listings Upgrade %
Auckland 2023
Rest of NZ 2023
Auckland 2022
Rest of NZ 2022
55%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
-
OneRoof revenue (print and digital) was $20.8
million for 2023 which was 9% lower than 2022
as a result of a very weak real estate market.
Despite this OneRoof digital revenue grew
by 5% now representing more than half of
OneRoof’s total revenue.
OneRoof digital revenue growth was achieved
through increased listings upgrade conversions
rates together with improved yield on upgraded
listings. Conversion rates were up to 44% in
Auckland and 20% for the rest of New Zealand
by the end of the year.
OneRoof monthly audience continued
to strengthen with the gap to Trade Me
property audience closing over the year.
OneRoof Monthly Audience
i
e
c
n
e
d
u
A
e
u
q
n
U
i
600,000
500,000
400,000
300,000
200,000
100,000
0
n
a
J
b
e
F
r
a
M
r
p
A
y
a
M
n
u
J
l
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g
u
A
p
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S
t
c
O
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o
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D
1
2
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2
2
n
a
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2
2
b
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F
2
2
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a
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2
2
r
p
A
2
2
y
a
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2
2
n
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2
2
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2
2
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2
2
p
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2
2
t
c
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2
2
v
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2
2
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3
2
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3
2
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3
2
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3
2
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3
2
y
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3
2
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3
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3
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3
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3
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2
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3
2
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D
1 Nielsen Online Ratings monthly average Jan 20 - Dec 2022 AP15+ (excludes APP). 2 NZME Analysis
1 NZME Analysis. 2 Nielsen Online Ratings - Domestic Unique Audience, Dec 2021 – Dec 2023 (does not include exclusive
mobile app audience).
14 NEW ZEALAND MEDIA AND ENTERTAINMENT
OUR SUSTAINABILITY
COMMITMENT
At New Zealand Media and Entertainment, we're committed to making
a positive impact for our communities, our people and playing our part
in protecting the environment. We have a responsibility to protect the
craft of journalism and broadcasting, keeping Kiwis in the know.
In 2024 we released our
Sustainability Commitment.
The new commitment also
incorporates NZME’s climate
related disclosures, which
are covered on page 27 of
this report.
As a media and entertainment
business we connect and
empower our communities,
provide a workplace that
fosters innovation, engagement
and inclusion and we take
our responsibility to the
environment seriously.
We are committed to reducing
and mitigating our impact as a
business on the environment
and we are focused on
utilising our platforms to grow
community connections and
engagement on local and global
environmental issues.
We provide a workplace that
fosters innovation, engagement,
and inclusion through promoting
a healthy, diverse and safe
workplace. We are relentlessly
focused on developing our people
and continue to champion and
protect the craft of journalism
and broadcasting.
Our communities, our
customers and our audience of
more than 3.5 million people
motivates our teams every
day. We strive to connect and
empower our communities
across NZME's platforms, as New
Zealand’s largest multi-media
company. This includes ensuring
we provide diverse, balanced,
quality and trusted news and
that we facilitate conversations
about the topics that matter
most to New Zealanders.
NZME’s sustainability
commitment measures against
the UN Sustainable Development
Goals – an international blueprint
to achieve a better and more
sustainable future for everyone.
We also benchmark our efforts
against global sustainability
standards, industry trends, and
our media peers both in New
Zealand and internationally.
We believe NZME’s sustainability
commitment assures the
prosperity of our business to
deliver value for our people, our
customers, audiences and our
shareholders, well into the future.
CASE STUDY: ELECTION 2023
NZME’s election coverage provided a comprehensive and balanced
narrative across our newsrooms. The synergy of in-depth analysis, real-time
updates and diverse perspectives in the build up and on election night,
engaged New Zealanders across the country.
PICTURED: CYCLONE GABRIELLE
In February 2023, New Zealand’s North Island was
subject to extreme weather events, which had a
huge impact on people, homes, businesses, and
infrastructure. NZME kept impacted communities
in the know through continual news updates
and the distribution of a free special edition of
Hawke’s Bay Today containing vital Civil Defence
and public health information.
ANNUAL REPORT 2023 15
We are committed to protecting the craft of journalism and broadcasting to keep Kiwis in the know.
OUR COMMUNITIES
OUR PEOPLE
OUR ENVIRONMENT
We connect and empower our
communities
We provide a workplace that fosters
innovation, engagement and inclusion
We accelerate awareness and
drive meaningful action on
environmental issues
RESPONSIBLE
REPORTING AND
BROADCASTING
CONNECTING
COMMUNITIES
PROMOTING A
HEALTHY, DIVERSE
AND SAFE
WORKPLACE
CHAMPIONING
THE CRAFT AND
DEVELOPING OUR
PEOPLE
REDUCE AND
MITIGATE OUR
IMPACT
GROW
CONNECTION AND
ENGAGEMENT
NZME’s sustainability programme is aligned to the guidelines set out in the UN Sustainable Development Goals
- an international blueprint to achieve a better and more sustainable future for everyone.
16 NEW ZEALAND MEDIA AND ENTERTAINMENT
PICTURED: HERALDS OUR HEROES 2023
It’s a proud tradition that goes back to 1991.
At the end of each year the New Zealand Herald
nominates Our Heroes across news, sport,
business and entertainment, honouring the
men and women who the NZ Herald believe
deserve the widest possible recognition.
OUR COMMUNITIES
We connect and empower our communities.
NZME is deeply involved in our communities, and as one
of New Zealand’s largest media companies we will facilitate
conversations about the topics that matter to Kiwis, and we
continue to partner with charitable organisations throughout
the year. We are proud to provide quality, trusted, diverse
and balanced journalism and entertainment right across
our platforms.
CASE STUDY:
WHAT THE ACTUAL?!
In response to Gen Z’s growing
preference for social and
digital news formats, NZ Herald
launched What the Actual?! in
April 2023 – a new and unique
social media brand aimed at
keeping Kiwi youth in the know on
the issues that matter most to them.
Published across TikTok, Instagram
and YouTube, What the Actual?! delivers
easily consumable, video-led content
covering the biggest breaking stories,
current events, sports, entertainment,
social justice and political news.
CASE STUDY:
MENTAL AS ANYTHING
Mental As Anything is a
podcast series hosted by
Radio Hauraki Day Show
host Angelina Grey, inspired
by the fact that the global
pandemic has seen a 25%
increase in anxiety and
depression worldwide.
INITIATIVE
PROGRESS
ANNUAL REPORT 2023 17
RESPONSIBLE REPORTING
AND BROADCASTING
Through best practice
broadcasting and journalism,
we will provide a diverse and
balanced reporting platform,
promoting the law and holding
the powerful to account.
CONNECTING COMMUNITIES
We are deeply involved in our
communities and as one of
New Zealand’s largest media
platforms we will facilitate
conversations about the topics
that matter to Kiwis.
Where justified in the interests of freedom of expression, open justice
and holding the powerful to account, NZME invests in legal challenges
to suppression, take down orders, access to court files and other media
law challenges. In 2023 NZME participated in 13 legal challenges, some
of which involved continued investment in opposing or appealing
to the High Court, Court of Appeal and the Supreme Court. In 2023
NZME continued with the Open Justice Project, which which covers
local court cases.
NZME strives to adhere to our Editorial Code of Ethics and the principles
and standards of the NZ Media Council and the Broadcasting Standards
Authority (BSA).
Regulator
Number of Upholds
BSA
2022
Nil
Media Council
Three upheld
2023
1
Nil
We have maintained our commitment to our communities through the
presence of local journalists and broadcasters. We employ 565 journalists
and broadcasters nationwide.
We increased diversity of content and contributors across our platforms
in 2023 including:
• Kea Kids News – News made for kids, by kids, hosted on
nzherald.co.nz
• No Such Thing As Normal – 10-part podcast series discussing
Neurodiversity
•
•
12 new cadets entering the award-winning Te Rito programme
Te Wiki o te Reo Māori (Māori Language Week) events, including
Te Reo Māori news bulletins and content, podcasts and video
content across our platforms
• M9 - Supporting the showcase of unique perspectives in celebration
of events such as Te Matatini, Matariki and Te Wiki O Te Reo Māori
•
Transgenerations – Trans Kiwi young and old tell their stories
• NZME continued its media partnership with Auckland Unlimited
across major summer cultural festivals including Diwali, Lantern
Festival and Pasifika.
In 2023 we have championed and supported charitable causes,
providing support to:
NZ Red Cross Disaster Relief Fund, The Funding Network of New
Zealand, Big Clash Cricket Charity Match (Un Ltd), Good Impressions –
GoMedia, Liam Patterns Newsprint supply, Music Helps, Cystic Fibrosis
NZ, Bowel Cancer Awareness, Mindful Fashion Circular Design Awards,
Blue September, Women’s Refuge (Shielded Initiative), Variety New
Zealand, Salvation Army (The Hits’ Fill the Bus Rotorua), Tauranga Food
Bank (The Hits BOP Christmas Movie in the Park), Breast Cancer Cure
(Callum and P’s 600 minutes for 600 lives).
18 NEW ZEALAND MEDIA AND ENTERTAINMENT
CASE STUDY:
CYCLONE GABRIELLE RED CROSS APPEAL
NZME helped raise $13 million through the NZ
Red Cross Disaster Relief Fund following Cyclone
Gabrielle, and helped Aotearoa prepare for, respond
to, and recover from future disasters following
flooding events.
NZME also made $1 million in advertising support
available to support businesses that were impacted
by the weather events themselves, or that were in a
position to help those that had been impacted.
CASE STUDY:
600 MINUTES
FOR 600 LIVES
The Hits Dunedin
Breakfast Show
hosts Callum Proctor
& Patrina Roche
participated in
Breast Cancer Cure
New Zealand’s 600
Minutes for 600 Lives
campaign, walking
around the Octagon as
many times as possible
for 600 minutes (10
hours) to raise funds and
awareness.
ANNUAL REPORT 2023 19
CASE STUDY:
NO SUCH THING AS NORMAL,
funded by NZ on Air, is a 10-part
series that aims to help listeners
better understand those living with
neurodivergence. It is believed that
at least 20 percent of New Zealanders
live with neurodivergence, but there
is little awareness or support for people
with conditions such as ADHD, autism
and dyslexia.
CASE STUDY:
WHAT IT TAKES TO BE A LEADER
The world is changing, New Zealand is
changing and, in response, a new style of
leadership is emerging among Māori women.
Te Ropu Poa, Rena Owen, Dr Maria Baker,
Hūhana Lyndon and Tui Shortland are all
at the top of their game. Jenny Ling spoke
with them to discover what drives them to
succeed and make Aotearoa a better place.
CASE STUDY: TRANSGENERATIONS An eight-part web series tells the stories of transgender Kiwis from their late 70s to early 20s, documenting the history of trans experience in New Zealand and dispelling stereotypes about who trans people are. 20 NEW ZEALAND MEDIA AND ENTERTAINMENT
OUR PEOPLE
We provide a workplace that fosters innovation,
engagement, and inclusion.
PICTURED:
EQUIPPING OUR PEOPLE
The first intake of DevelopMe
launched in 2023, designed to
deliver vibrant and exceptional
leadership across NZME.
Initiatives to support and
promote mental health and
wellbeing included new
neurodiversity workshops
and continued support from
our Employee Assistance
Programme.
CASE STUDY:
TE RITO JOURNALISM CADETSHIP
In 2023 we welcomed 12 new
cadets into the award-winning
Te Rito programme, a media
industry partnership which
aims to inject the industry with
voices that better reflect our
diverse communities.
NZME is committed to being
an employer of choice and in
2023, finished the year with an
Employee Net Promoter Score
within the top 10% of consumer
media businesses globally.
Through the work of NZME’s
Diversity and Inclusion
Committee, NZME continues
to support and celebrate a
calendar of events, alongside
DevelopMe, a new leadership
programme to create vibrant
and exceptional leadership
across NZME. The first intake for
the programme has commenced
with the second intake due to
start in 2024.
AGE GROUP
CONTRACT TYPE
ANNUAL REPORT 2023 21
65+
5%
<24
10%
55-64
15%
PART TIME
9%
CASUAL
13%
CONTRACTOR
4%
25-34
24%
45-54
22%
35-44
24%
FULL TIME
74%
GENDER / LEVEL
F M
45%
55%
STAFF
52%
57%
48%
43%
40%
60%
PEOPLE
LEADERS
EXECUTIVE
BOARD
LENGTH OF SERVICE (YEARS)
300 FTE
200 FTE
100 FTE
0
< 1 Y
1 -2 Y
3 - 5 Y
6 - 10 Y
11 - 20 Y
21 - 30 Y
31 Y +
ETHNICITY
0%
20%
40%
60%
80%
100%
European
Māori
Indian
Chinese
Other Asian
Pacific Peoples
Other Ethnicity
Middle Eastern / Latin American / African
Undeclared
22 NEW ZEALAND MEDIA AND ENTERTAINMENT
OUR PEOPLE
INITIATIVE
PROGRESS
PROMOTING A HEALTHY,
DIVERSE AND SAFE
WORKPLACE
We will embed a high
performing health and safety
culture and will regularly report
on our performance. We will
strive for a collaborative and
welcoming place to work that
celebrates diversity. We will
adopt and strengthen policies
for the promotion of gender
equality.
With 35 sites across New Zealand, we have implemented new
procedures to ensure health and safety requirements are being
applied consistently across all our offices. EY conducted a thorough
audit of NZME’s health, safety and wellbeing processes. There were
no significant rated observations found as part of this audit and all
recommendations within the report will be implemented in 2024.
The Diversity and Inclusion Committee hosted a calendar
of events including:
•
•
Pink Shirt Day supporting a culture free from bullying,
harassment, and discrimination
International Women’s Day Panel Event
• Chinese New Year and Chinese Moon Festival
•
•
Lunar New Year celebrations
Auckland Rainbow Parade, Whangarei Proud Parade
and NZME Bright Shirt Day for Pride
• New Zealand Sign Language Week
•
Rainbow Tick accreditation and workshops supporting
a LGBTQ+ inclusive workplace
• Matariki (marking the beginning of the new year in the Māori
lunar calendar) and Pasifika celebrations
•
•
Tongan Language week
Te Wiki o te Reo Māori (Māori language week)
• NZ Mental Health Week
•
Unconscious Bias Training through our partnership
with Diversity Works NZ
• Wellness Week
•
Diwali (Festival of Light) celebrations
• Wellbeing Week – with support from TELUS Health (formerly
Benestar) and focus on mental health, women’s and men’s health.
NZME supports initiatives that reduce the gender pay gap and
eliminate gender inequalities across the business and continues
to closely monitor relevant data points across the business to hold
leaders accountable and ensure continued progress with diversity,
inclusion and reducing inequities.
ANNUAL REPORT 2023 23
INITIATIVE
PROGRESS
PROMOTING A HEALTHY,
DIVERSE AND SAFE
WORKPLACE
Continued
We are striving for diversity at Board, Executive and People
Leader levels.
In 2023, for gender, we have at Board level F60%:M40% (2022:
F60%:M40%), at Executive level F43%:M57% (2022: F30%:M70%)
and for our People Leaders F48%:M52% (2022: F50%:M50%).
At Board level for ethnicity, all members identify as European (2022:
all members identified as European) and at Executive level 14%
identifying as Chinese and 86% as European (2022: 9% identifying
as Chinese and 91% as European), and for our People Leaders we
have 85.3% (2022: 86.5%) European, 7.8% (2022: 8.1%) Māori, 3.5%
(2022: 3.1%) Indian, Chinese 1.3% (2022: 1.8%) and 2.1% (2022: 0.5%)
identifying as other ethnicities.
NZME supports flexible working for diverse needs and/or shared
responsibility in the household. Policies and initiatives in 2023 to
support this included surveying our people to understand what
was important to them.
NZME had 38 interns and cadets (2022: 26) across our newsrooms
in 2023.
CHAMPIONING THE CRAFT
We will ensure we are
mentoring the next generation
of journalists and broadcasters.
We will develop our people to
maintain and grow the craft.
A total of 299 hours (2022: 247 hours) of media law and regulation
training was undertaken by our journalists and broadcasters at NZME
in 2023, with a focus on BSA training due to updated codes. This
training which was made widely available.
Refer to page 44 for our Awards list celebrating the talent and
commitment of our people.
NZME has completed the first year of the new DevelopMe leadership
programme with cohort one, with cohort two beginning in 2024.
24 NEW ZEALAND MEDIA AND ENTERTAINMENT
OUR
ENVIRONMENT
We accelerate awareness and drive
meaningful action on environmental issues.
NZME is committed to operating
sustainably and to minimising our
environmental footprint.
NZME is pleased to commence reporting
through the new climate-related disclosure
framework as prepared by the External
Reporting Board (XRB). NZME has engaged
specialists to support the development of
its emissions inventory and understand its
climate risks, opportunities, and impacts.
NZME will implement an environmental
roadmap, to assess and reduce our
environmental footprint.
We benchmark our efforts against global
sustainability standards, industry trends,
and our media peers both here in
New Zealand and internationally.
PICTURED: TOITU CERTIFICATION
In 2023, NZME’s print operations in
Ellerslie, Auckland were awarded the
Toitu enviromark gold certification
(NZME has attained gold level
certification since 2011).
ANNUAL REPORT 2023 25
INITIATIVE
PROGRESS
Reducing waste across NZME continues to be a strong focus, with a
reduction of 14% or 3.0 tonnes in general waste compared to 2022. We
have also reduced the number of bins and the bin size for general waste.
NZME focuses on recycling, separating our internal waste streams –
including paper, food and green waste, and recyclables to optimise value
and reduce our environmental impacts. We have recycling facilities in
place through major offices. NZME also supports Recycling Week.
NZME has committed to no longer purchase or lease any further
diesel vehicles and has ordered only hybrids for all new fleet cars
since late 2022, replacing old cars with hybrids as their leases expire.
The number of fleet cars has also reduced from 151 to 130 during
the 2023 round of lease renewals. NZME has reduced our company
vehicle carbon emissions by 42% year on year.
REDUCE AND MITIGATE
OUR IMPACT
We are addressing our
environmental risks and
opportunities by reducing
and mitigating the impact of
our products and processes,
collaborating with our suppliers
on the solutions and disclosing
our performance.
•
•
•
We have continued to focus on reducing our environmental impact
at our print plant in Ellerslie:
• NZME’s print operation maintains the Toitu Enviromark Gold
certification – demonstrating our focus on reducing waste,
operating efficiently, and minimising harm to the environment.
NZME has attained gold level certification since 2011.
The Waste Committee and the Plastic Reduction Project drove
initiatives across both production and distribution teams at our
Ellerslie print plant. NZME has further optimised production,
leading to a reduction of 16% or 7.8 tonnes of plastic year on year.
In 2023, 29 tonnes of general waste was removed from the print
plant; this was a reduction of 25% from 2021.
Plastic usage reduction has also been a success. Year-on-year
plastic usage is down, primarily from optimising bundle sizes.
We are also testing alternatives to plastic for the small number
of papers that need to be individually bagged, which includes
looking at corn starch and potato starch alternatives.
The Ellerslie print plant developed the capability to unload paper
deliveries direct from Auckland Port. Previously this activity was
completed at Tauranga Port with paper then road freighted to
Ellerslie. The change has led to a 75,000km a year reduction in
road freight.
Route optimisation for our delivery and bulk freight network has
seen a reduction in travel year-on-year of 65,803 kms. We have
also invested in geospatial routing software and we have a small
skilled team responsible for ensuring our operation is as efficient
as it can be.
•
•
• NZME has invested in new Kodak platemaking technology and
plates, leading to the printing plate making process now being
chemical free.
• NZME has reduced our forklift fleet, replacing several forklifts
with more environmentally friendly models, including investing
in an electric forklift.
NZME continues to work with our suppliers and partners to ensure our
operations are best practice. We introduced a Responsible Sourcing
Policy, which sets out the minimum standards that all suppliers, direct
or indirect, and approved sub-contractors, are expected to comply
with to do business with us. NZME has also developed and issued
a Modern Slavery Statement, which explains how we proactively
manage and mitigate the risk of modern slavery, including forced
labour and other severe worker exploitation.
26 NEW ZEALAND MEDIA AND ENTERTAINMENT
OUR ENVIRONMENT
INITIATIVE
PROGRESS
GROW CONNECTION AND
ENGAGEMENT
We facilitate/accelerate
environmental awareness and
engagement by presenting the
facts across our media platforms
and by cutting the jargon to
make it easier for people to
understand environmental
issues and take meaningful
action.
NZME uses its many platforms to cover environmental issues impacting
New Zealanders including carbon emissions, weather events, and
climate change.
The NZ Herald online has a dedicated section online for environmental
news. This content hub brings together sustainability content created
by NZME's leading lifestyle brands and amplifies these important
messages through various NZME channels to empower, inform, and
inspire Kiwis with messages of sustainability they can take into their
everyday lives.
In 2023, New Zealand experienced significant weather events, with
Cyclone Gabrielle in February leading to several deaths and widespread
damage and destruction to the Gisborne and Hawke’s Bay regions. As
well as using our platforms to keep communities informed, as reported
earlier in this report, we produced content that looked at the reasons for
such weather events from a climate perspective and how communities
can mitigate the impact of such weather events.
The NZ Herald continues to take part on Covering Climate Now
– a global news media initiative. The NZ Herald and NZME’s other
news platforms continue to cover environmental and climate change
related issues.
CASE STUDY:
THE NEW NEW ZEALAND: REBUILDING BETTER
An NZME project focused on ways New Zealand
can rebuild its economy and recover socially after
the COVID-19 pandemic, cost-of-living crisis,
protests, and winter of discontent. As part of
the 2023 editorial series, the Herald investigated
the state of crime in NZ and the solutions available
to address it.
ANNUAL REPORT 2023 27
CLIMATE- RELATED
DISCLOSURES
We take our responsibility to the environment seriously.
CLIMATE RESILIENCE – INTRODUCTION
As the world grapples with the multifaceted
challenges posed by climate change, media plays
a pivotal role in shaping public awareness and
fostering informed discussions. Our responsibility
extends beyond reporting the news to actively
contributing to the collective understanding of
climate change, advocating for sustainable practices,
and inspiring positive action by walking the talk.
•
•
The environmental pillar within our Sustainability
Commitment recognises the material part we can
play in addressing climate change and to support
New Zealand's transition to a low carbon economy.
We are focused on reducing and mitigating our
own impact, and accelerating Kiwis awareness and
engagement on environmental issues.
•
•
NZME is a climate-reporting entity under the
Financial Markets Conduct Act 2013. Our inaugural
climate related disclosures on pages 27 to 43
cover our progress between 1 January 2023 and
31 December 2023 and comply with the Aotearoa
New Zealand Climate Standards issued by
the External Reporting Board. All figures and
commentary relate to the full year ended
31 December 2023, unless otherwise indicated.
In preparing its climate-related disclosure,
NZME has elected to use the following
adoption provisions:
Adoption provisions 1 and 2: Current
and anticipated financial impacts – while
quantitative data is not provided, a qualitative
description of the current and anticipated
financial impacts has been provided.
Adoption provision 3: Transition planning
– a description of our progress towards
developing our transition plan can be found
on page 39 – positioning ourselves for a low
carbon future.
Adoption provision 4: Scope 3 GHG emissions
– our scope 3 emissions will be reported in our
second climate disclosure next year.
Adoption provision 6: Comparatives – we
provide two years of comparative data and
analysis of trends for our scope 1 and 2
greenhouse gas emissions only.
Figure 1 summarises our journey to date in
understanding and managing our climate related
issues. This work provides a foundation for NZME to
establish and embed good practice in addressing
climate change issues across governance, risk
management and strategy, and in establishing
metrics and targets to measure our progress now
and into the future.
28 NEW ZEALAND MEDIA AND ENTERTAINMENT
CLIMATE-RELATED
DISCLOSURES
CONTINUED
alysis
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ate im
ntific
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e
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re
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e
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e
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ntatio
e
p
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a
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d
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nin
n
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Tra
pla
nt
e
s
m
n
sio
ure
mis
s
a
e
m
E
d 2
n
e 1 a
p
o
c
S
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
Figure 1: Our climate disclosure journey – 2023 progress
GOVERNANCE
Board oversight
NZME's Board is responsible for oversight of
climate-related risks and opportunities. Climate-
related opportunities are reflected in the Group’s
Sustainability Commitment. The Board Charter
stipulates that a key function of the Board is to
ensure the Group’s health and safety, environmental
and operational practices and culture comply
with legal requirements and that the Group’s
Sustainability Commitment reflects best practice
and is recognised by employees and contractors as
key priorities for the Group.
The material climate-related risks and opportunities
identified by the business are presented annually to
the NZME Board, following an annual review against
current trends and scenarios. Climate change
and sustainability is a standing agenda item at the
Board Audit & Risk Committee’s meetings to ensure
progress on management actions in these areas is
monitored and discussed.
During 2023, the NZME Board engaged in training
and education to ensure it has in place the
appropriate skills and competencies to provide
oversight of climate-related risks and opportunities.
This included engaging external experts to provide
climate knowledge-building across the Board,
and using Chapter Zero resources and tools to
develop capability. Board climate capability is also
established through experience on Boards of other
climate reporting entities, including:
•
Barbara Chapman through her roles with
Genesis Energy Limited (Chair), Fletcher
Building Limited (Director) and Bank of New
Zealand (Director);
• Carol Campbell through her roles with NZ
Post Limited (Chair) and T&G Global Limited
(Director);
•
David Gibson through his roles on Goodman
Property Trust (Deputy Chair), Freightways
Group Limited (Director) and Contact Energy
Limited (Director).
The Board intends to integrate climate change
into its skills matrix and recruitment process.
The People, Remuneration & Nominations
Committee of the Board is responsible for making
recommendations to the Board in relation to the
composition of and nominations to the Board.
Climate-related skills and competencies will in
future be included in this assessment.
The Board reviews NZME’s overall strategy and
progress against its strategic priorities annually with
the Executive management team. As part of this
process the Executive team and the Board consider
risks and opportunties, including climate-related
risks and opportunities, across the business and
how those risks and opportunites shape NZME’s
strategy and impact the setting and achievement
of its strategic priorities.
NZME’S 2023 climate metrics and targets include
its Scope 1 and 2 emissions and associated targets.
These have been reviewed and signed off by the
ANNUAL REPORT 2023 29
Board and emissions progress will be monitored six
monthly as part of the Board risk review process.
Climate-related performance metrics are not
currently incorporated into remuneration
policies. However, the People, Remuneration
and Nominations Committee of the Board is
tasked with setting and reviewing remuneration
policies and practices of NZME to ensure they are
consistent with the company’s strategic goals
and incorporated into short-term and long-term
incentives where appropriate. As part of this on-
going responsibility the Committee will consider
how to incorporate climate-related performance
metrics for relevant roles.
Management’s role
Climate-related responsibilities have been
assigned to management level positions that
have an accountability for identifying, managing,
and reporting climate-related issues. The
Climate-related Disclosure Working Group
(“CRD Working Group”) was formed in 2023 and
includes the following members of the Executive
management team: the Chief Executive Officer,
the Chief Financial Officer, Chief Marketing Officer
and the Chief People Officer; and also senior
representatives from across the company. This
group provides tactical and specialist support with
the identification and management of climate-
related issues and reports through to the NZME Risk
Committee. The CRD Working Group undertook
climate training and scenario analysis in 2023,
with the resulting work presented to the Executive
management team and Board in July. The Chief
Financial Officer engages with the Board and the
Board Audit & Risk Committee at each meeting on
NZME’s climate-related progress.
The Executive management team and the CRD
Working Group (reporting through the Risk
Committee, chaired by the CFO) review the material
climate-related risks and opportunities six monthly.
The output of this assessment is integrated into
NZME’s risk register, emissions management
planning, strategy, budgeting, and external
reporting. The Executive management team
monitor progress on tactical activities to address
climate-related risks and opportunities.
Figure 2 illustrates the integration of climate-
related responsibility between the Board, Executive
management team, risk committee and the CRD
working Group.
30 NEW ZEALAND MEDIA AND ENTERTAINMENT
CLIMATE-RELATED
DISCLOSURES
CONTINUED
Figure 2: NZME’s climate-
related governance structure
BOARD
EXECUTIVE MANAGEMENT TEAM
CLIMATE-RELATED RISK WORKING GROUP
NZME’s Board are responsible for overseeing the implementation and execution of
NZME’s Sustainability Commitment and climate-related activities. They convene
at least six times per year and receive recommendations from the Audit & Risk
Committee, gain insights, review, and ensure proper implementation of internal
control mechanisms and risk management process for good climate-related
governance.
The Executive management team members have the highest management-level
responsibility for identifying, assessing and managing climate-related issues.
Supported by the risk committee (chaired by the CFO) they report to the Board,
including through its Committees, on the climate-related impacts on the business and
are responsible for implementing the strategic response and monitoring the overall
risk exposure of NZME. They ensure that the CRD Working group receive appropriate
organisational support to contribute to establishing a framework and process for the
inclusion of climate-related impacts in the enterprise risk management program and
strategic implementation.
Made up of the Chief Executive Officer, Chief Financial Officer, Chief Marketing Officer
and Chief People Officer, alongside subject area experts and roles with a specific
responsibility for coordinating and implementing NZME’s climate-related activities.
The CRD working group includes pan-organisation representation, including portfolio
managers, operations, culture & performance, finance, strategy, procurement,
risk and compliance. Coordinated by the CFO, they meet as required during the
year and report progress to the risk committee, who in turn report to the Executive
management team.
Board of Directors
Executive
management team
Climate- related
disclosure working
group (“CRD
working group”)
STRATEGY
This section covers current climate impacts,
anticipated financial impacts and how these
will be integrated into our planning.
Current physical and transition impacts and
financial impact.
The current financial impacts resulting from NZME’s
current physical and transition impacts have been
described qualitatively in Table 1 below. These
were identified by initially evaluating the areas of
NZME which were impacted and then assessing
the impact on expenses, revenues, assets and
liabilities. The materiality of the financial impact
was determined by considering its associated value
within a range, where Low = < $0.5 million;
Med = $0.5 - $1 million; High = >$1, million.
Some financial impacts could be reasonably
quantified. However, other impacts are more
difficult to quantify, for example, increasing
audiences - due to the challenge in attributing this
impact directly to climate-related opportunities
rather than other business campaigns to drive
audiences. As part of its updated Sustainability
Commitment, NZME is establishing metrics to
monitor audience uptake of climate-related content,
which may support the financial quantification of
this impact in future.
ANNUAL REPORT 2023 31
Table 1: NZME’s current (2023) climate-related impacts
Climate issue
Type
Business impact
Financial
impact
Level of
financial
impact
Extreme weather events -
Auckland floods (Jan 2023) and
Cyclone Gabrielle (Feb 2023)
Physical risk
• Disruption to distribution of
Expenses
Low
printed publications to affected
regions;
• Increased reliance/dependency
Expenses
Low
of communities on AM/FM
as the most reliable mode of
communication;
• Damage to company property
Expenses
Low
disrupting services;
• Business disruption - Staff
Expenses
Low
unable to access workplace
and journalists unable to access
affected regional offices; Events
cancelled in affected regions;
• Increase in public awareness for
news coverage of flood/cyclone
events, focused content
development to meet audience
needs and demands.
Revenues &
Expenses
Low
Management response
Full review conducted in wake of these weather events. Actions included increasing resiliency in AM/FM network,
improving Business Continuity processes and mitigations.
Climate issue
Type
Business impact
Financial
impact
Level of
financial
impact
Legislative reporting
requirements - Inaugural NZ
Climate Standard disclosure
Transition
risk
• Enhanced costs/time/capability
Expenses
Low
requirements to ensure
reporting obligations are fully
met.
Management response
External consultants engaged to support capability development and implementation of disclosure requirements.
Climate issue
Type
Business impact
Shifting consumer preferences
and new market opportunities –
e.g. 2023 media industry move
to net zero focus (AdNetZero),
potential increased interest in
climate-related journalism
Transition
opportunity
• Continued focus on NZME’s
Scope 1-3 emissions
measurement and responsible
sourcing;
• Climate-related risk/opportunity
lens to overlay current plans/
monitoring of impact of NZME’s
media platforms – print, digital,
terrestrial radio, digital audio;
• Focused content; development
on weather events and climate
change in order to continue
Keeping Kiwis in the know.
• Increase in client / advertiser
interest in being aligned with
or sponsoring informative,
educative, positive climate-
related content.
Management response
Continue to monitor consumer media platform preferences and impact.
Increase content covering climate and environment.
Financial
impact
Level of
financial
impact
None
None
None
None
None
None
Revenues
Low
32 NEW ZEALAND MEDIA AND ENTERTAINMENT
CLIMATE-RELATED
DISCLOSURES
CONTINUED
Scenario analysis
In May 2023, the CRD Working Group engaged
external consultants to support our scenario
analysis.
In developing the scenarios the representative
concentration warming pathways (“RCPs”)
established by the Intergovernmental Panel on
Climate Change (“IPCC”) 6th assessment and the
Shared Socio-economic Pathways (“SSP”) scenarios
relevant for New Zealand were adapted to our
industry and entity. We analysed three different
scenarios:
1.
a deep decarbonisation scenario, which
assumed the conditions under SSP1-1.9 and
RCP 2.6 (average warming of 1.4 degrees C
by 2100);
2. a status quo scenario, which assumed the
conditions under SSP2-4.5 and RCP 4.5
(average warming of 2.7 degrees C by 2100);
and
3. a carbon intensive scenario, which assumed
the conditions under SSP5-8.5 and RCP 8.5
(average warming of 4.4 degrees by 2100).
The New Zealand reference data was overlaid to
these scenarios, to develop detailed narratives and
parameters to evaluate climate-related risks and
opportunities. Our methodologies and assumption
disclosures below provide more detail on the
scenarios analysed.
Climate training was conducted followed by three
scenario assessment workshops. These workshops
focused on identifying the material risks and
opportunities under these three scenarios, testing
the resilience of our strategy and discussing
the management response required to address
risks or harness opportunities. We undertook
initial heatmapping of the financial impact of our
identified risks and opporutnities, with a view to
quantifying the financial impact of material risks and
opportunities in the future.
We are now conducting transition planning that will
leverage the learnings from the scenario analysis
process and this includes developing our emissions
reduction plan, quantifying the financial impacts
and the longer term implications to our core
business model and strategy.
Methodologies and assumptions
The details of each scenario narrative can be found
in Figures 3.1 – 3.3. The scenarios were developed
to illustrate the nature of risk which might plausibly
emerge as a result of climate-related physical and
transition risk to 2100. We evaluated the most
ambitious and worst-case scenarios, to ensure that
we stress tested all material risks or opportunities
that might plausibly eventuate in the years to 2100.
Taking this conservative approach also allows us
to consider an environment where the physical
impacts escalate much faster than anticipated,
and/or the corresponding transitional impacts
are put in place more rapidly, and to test our ability
to respond.
The scenarios considered time horizons out to the
end of this century (2100), supported by source
data on the key trends over this period including:
Temperature change (IPCC 6th Assessment report;
NIWA); Flooding (Ministry for the Environment
National Climate Risk Assessment 2020); Sea
level rise (NASA); Population growth (Shared
Socio-economic Pathways); Regulatory/Policy
(Shared Socio-economic Pathways); Technology
(International Energy Agency); Transportation
(Ministry of Transport); Mitigation vs Adaptation
efforts (McGuinness Institute).
ANNUAL REPORT 2023 33
Figure 3.1
Deep decarbonisation
scenario parameters
DEEP
DECARBONISATION
Immediate, sustained
decarbonisation driven
by ambitious policies
and high technological
innovation, resulting in
net zero global emissions
around 2050.
NZ Temp change: 2025
NZ Temp change: 2090
Reference scenarios
SSP1 / RCP 2.6
Warming at 2100
(IPCC 6th Assessment; NIWA)
1.4 oC
Sea level rise at 2100
(NASA)
0.44m (NZ average)
Flooding – sea and pluvial
inundation
(MFE National Climate Risk
Assessment 2020)
High risk zones sustained:
Canterbury (Christchurch City; Waimakariri District); Whakatane District
(Edgecumbe; Matata); Otago (Dunedin City District (inc Sth Dunedin);
Waikato/ Coromandel (Hauraki District; Thames)
Population growth
(SSP)
Regulatory / Policy
(SSP)
Technology
(IEA)
Low
Regulation promotes sustainability and reducing greenhouse gas
emissions.
Government prioritises environmental protection and sets ambitious
targets for transitioning to a low-carbon economy. Policies promote
energy efficiency, support renewable energy deployment, and
incentivise sustainable practices in industry, agriculture, and
transportation. Policies also focus reducing social and economic
inequalities, such as minimum wage regulations, universal healthcare
coverage, and social welfare programs.
Focus on renewable energy sources, energy efficiency, and
sustainable practices. Increased investments in clean technologies,
such as solar, wind, and hydropower, as well as advancements in energy
storage, electric vehicles, and smart grid systems. Efforts would be
made to reduce greenhouse gas emissions and transition away from
fossil fuels.
Transportation
(MOT)
Strong investment in public transport for passenger transport,
scaling up of walkways and bikeways
Efforts to mitigate vs adapt
(McGuinness Institution)
Low challenges to mitigation and adaptation. Strong investment in
mitigation early on, enabling a reduction in effort by mid-late century
34 NEW ZEALAND MEDIA AND ENTERTAINMENT
CLIMATE-RELATED
DISCLOSURES
CONTINUED
Figure 3.2
Status quo
scenario parameters
STATUS QUO
Current policy,
social, economic and
technological trends
continue. The rate
of increase in global
emissions begins to
decline post 2050.
NZ Temp change: 2025
NZ Temp change: 2090
Reference scenarios
SSP2 / RCP 4.5
Warming at 2100
(IPCC 6th Assessment; NIWA)
2.7 oC
Sea level rise at 2100
(NASA)
Flooding – sea and pluvial
inundation
(MFE National Climate Risk
Assessment 2020)
Population growth
(SSP)
Regulatory / Policy
(SSP)
Technology
(IEA)
0.59m (NZ average)
High risk zones slowly worsening – access to insurance becoming
restricted:
Canterbury (Christchurch City; Waimakariri District); Whakatane District
(Edgecumbe; Matata); Otago (Dunedin City District (inc Sth Dunedin);
Waikato/ Coromandel (Hauraki District; Thames)
Moderate
Regulation reflects historical trends and status quo
Government prioritises economic growth and maintaining stability,
rather than taking aggressive measures to address climate change
or social inequality. Policies are aimed at maintaining a level playing
field in the market, protecting consumer rights, and maintaining social
order. However, there may be fewer regulations aimed specifically at
promoting sustainability or reducing greenhouse gas emissions, unless
they can be justified on economic grounds.
Technology changes are incremental and focus on addressing
immediate challenges. There may be a mix of conventional and
renewable energy sources, with limited progress in transitioning to a
low-carbon economy. Efforts may be made to improve energy efficiency
and develop cleaner technologies, but progress could be slower
compared to Deep decarbonisation.
Transportation
(MOT)
Mix of cars, public transport options
Efforts to mitigate vs adapt
(McGuiness Institute)
Medium challenges to mitigation and adaptation. Moderate efforts
initially focusing on mitigation, then both by mid-late century
ANNUAL REPORT 2023 35
Figure 3.3
Carbon intensive
scenario parameters
CARBON INTENSIVE
Ongoing fossil fuel-
driven economic growth
and resource-intensive
consumer choices
accelerate emissions.
NZ Temp change: 2025
NZ Temp change: 2090
Reference scenarios
SSP5 / RCP 8.5
Warming at 2100
(IPCC 6th Assessment; NIWA)
4.4 oC
Sea level rise at 2100
(NASA)
Flooding – sea and pluvial
inundation
(MFE National Climate Risk
Assessment 2020)
Population growth
(SSP)
Regulatory / Policy
(SSP)
Technology
(IEA)
0.85m (NZ average)
High risk zones rapidly worsening – no insurance available, areas in
managed retreat:
Canterbury (Christchurch City; Waimakariri District); Whakatane District
(Edgecumbe; Matata); Otago (Dunedin City District (inc Sth Dunedin);
Waikato/ Coromandel (Hauraki District; Thames)
High
Regulatory conditions are more favorable to fossil fuel industries and
less focused on environmental protection. Government prioritises
economic growth and energy security over climate change concerns,
and regulations may be less stringent to enable more rapid development
of fossil fuel resources. There may be fewer restrictions on resource
extraction, less stringent environmental regulations, and fewer
incentives for renewable energy. Policies may be aimed at ensuring the
stability of markets and maintaining social order, rather than promoting
sustainability or social equality.
Technology advancements prioritise maximising resource
extraction, expanding fossil fuel infrastructure, and increasing
energy production. There could be fewer incentives for renewable
energy sources, and carbon-intensive industries may thrive, however
sustainability concerns and climate change impacts could still lead
to the development of cleaner technologies, albeit at a slower pace
compared to Deep decarbonisation.
Transportation
(MOT)
Cars are predominant passenger transport
Efforts to mitigate vs adapt
(McGuiness Institute)
High challenges to mitigation and adaptation. More effort invested
later in the century, with main focus on adaptation
36 NEW ZEALAND MEDIA AND ENTERTAINMENT
CLIMATE-RELATED
DISCLOSURES
CONTINUED
Our inaugural climate scenario analysis was
performed as a stand-alone process. However,
the outputs have been integrated into NZME's Risk
Management Framework, as well as our Sustainability
Commitment, environmental management planning,
and associated metrics and targets.
Members of the Executive Management Team
as well as the CRD Working Group were involved
in the scenario analysis and the development of
management activities to address different risks
and opportunities. The Board oversaw the climate-
related assessment process and were provided
regular updates on the progress and outputs of
our scenario analysis and resulting management
activities.
While the time horizon for the scenarios stretched
to the end of the century, we considered how the
potential impacts would meaningfully play into
the short, medium and long term timeframes for
our business planning and capital deployment.
We defined these time horizons in Figure 4.
Figure 4: Time horizons
SHORT TERM:
Next 1–3 years
Aligned with business planning
MEDIUM TERM:
Next 3–10 years
Aligned with asset management
and publication life
LONG TERM:
Next 10–30 years
Aligned with investor relations
and radio stream life
• Focus on managing
• Focus on transitional risks
• During this time, physical
immediate risks such as
disruptions to operations due
to extreme weather events,
developing content that
addresses climate risks and
opportunities and mitigation
and efficiency of own
emissions.
• Strategic focus: Mitigation
+ efficiency
such as regulatory changes
that impact advertising
or content distribution,
changes in technology, shifts
in market conditions that
affect advertising revenue
or changes in consumer
behaviour due to shifting
attitudes towards climate
change. Also includes longer-
term adaptation measures
such as changes to physical
infrastructure. Continued
mitigation and efficiency of
own emissions.
• Strategic focus: Mitigation +
efficiency + adaptation (print/
digital transition)
risks such as sea level rise,
changes in temperature and
precipitation patterns, and
other impacts of climate
change may become more
pronounced. NZME will need
to continue to mitigate its
impact and may need to
transform the nature of its
business.
• Strategic focus: Transition,
mitigation + adaptation
(business transformation)
NZME considered its full value chain when evaluating its exposure to climate-related risks and opportunities.
Our anticipated physical and transition impacts are outlined in Tables 2 - 4, prioritised by scenario.
The anticipated financial impact of the material
risks and opportunities prioritised as ‘high’ under
each scenario was qualitatively assessed, where the
level of financial impact is defined as Low = <$0.5
million; Med = $0.5 million - $1.0 million; High =
>$1.0 million.
While the scenarios represent plausible, challenging
descriptions of how the future may develop, they
have inherent assumptions and uncertainty and
do not provide quantifiable predictions on the
pace and scale of climate-related impacts that
may affect our business. While the prioritisation
of different risks and opportunities under each
scenario provides a basis to qualify the financial
impacts, further data is required on the nature
of the impact in order to quantify the associated
financial impact. NZME will investigate its high
priority risks and opportunities further next year
and seek to understand how the financial impacts
may be further quantified. This will enable NZME to
more accurately evaluate how climate related risks
and opportunities serve as an input to its decision-
making processes.
Table 2: Anticipated financial impacts of material risks and opportunities – Deep decarbonisation
scenario
ANNUAL REPORT 2023 37
Climate issue
Type
Business impact
Chronic changes
to weather patterns
- increased mean
temperatures and rising
sea levels
Management response
Physical
OPPORTUNITY: to
inform audiences on
consequences of climate
change, steps they can
take, and on extreme
weather events
Level of
financial
impact
Med
Time
horizon of
impact
Short -
Long
Financial
impact
Revenue
Expenses
Assets and
Liabilities
Become and promote relevant NZME platforms as NZ's home of trustworthy, reliable and balanced weather event
information.
Continue to investigate opportunities for alternative connectivity including satellite, ensure newsrooms stay equipped
to operate remotely and amidst unstable infrastructure.
Climate issue
Type
Business impact
Implementing low
emissions/sustainable
technology
Transition
RISK: Cost of upgrade
of fleet/equipment,
increased costs of raw
materials
Financial
impact
Level of
financial
impact
Time
horizon of
impact
Expenses
Med – High
Short - Med
Assets and
Liabilities
Capital and
Finance
Management response
Investigate low emissions options and replace at natural end of life/end of lease agreements to minimise financial
impact, investigate government/industry funding opportunities, model costs of carbon into business cases.
Consider moves to smaller offices, renegotiating leases, explore alternative supply agreements including power
purchase agreements, convert to renewable/owned generation where possible and practical.
Climate issue
Type
Business impact
Legislative reporting
requirements
Transition
OPPORTUNITY: Ability
to take an industry
leadership role in NZ on
the transition; potential to
gain new audiences and
advertising share
Management response
Financial
impact
Level of
financial
impact
Time
horizon of
impact
Revenue
Med
Short
Capital and
Finance
Deliver on what we say we are going to, build a PR/marketing plan to highlight our achievements and communicate with
consumers/advertisers.
Develop specific products/information for advertisers and audience to understand our reporting and stance.
Climate issue
Type
Business impact
Shifting consumer
preferences, new market
opportunities
Transition
OPPORTUNITY:
Development of new
products and services
and access to consumers/
advertisers interested
in sustainably produced
journalism.
RISK: Pace of change
on consumer transition
to digital media is more
rapid than anticipated.
Financial
impact
Level of
financial
impact
Time
horizon of
impact
Revenue
Med
Short - Med
Expenses
Management response
Engage expert contributors, work on quality and breadth of content.
Highlight progress through PR and marketing, create climate focused platform.
Continue to monitor subscriptions to different media channels, customer engagement, ROI & growth potential,
and industry trends; refine risk management response, and integrate within asset planning approach.
38 NEW ZEALAND MEDIA AND ENTERTAINMENT
CLIMATE-RELATED
DISCLOSURES
CONTINUED
Table 3: Anticipated financial impacts of material risks and opportunities – Status quo scenario
Climate issue
Type
Business impact
NZME's reputation
Transition
RISK: Loss of consumers
due to mistrust in the
media, inadvertently
spreading misinformation/
disinformation, measures
on ESG not strong
enough, greenwashing
Financial
impact
Level of
financial
impact
Time
horizon of
impact
Revenue
Med
Short - Med
Capital and
Finance
Management response
Adhere to accuracy, balance and other Media Council and BSA principles, including providing training to our people to
support this, ensure qualified editors and content directors vet content to ensure quality, accuracy, balance, present
content in an engaging manner, clearly highlighting facts vs opinion and alternate views based on fact (whilst being
alert to the risk of spreading misinformation).
Build and develop expert sources of information and knowledge, use our data journalists to verify claims.
Good governance in place to ensure quality of sustainability claims and hold management to account in striving to
meet KPIs, review process for Sustainability Commitment and other ESG undertakings, including legal, to ensure not
misleading and NZME can live up to and deliver on its promises.
Peer benchmarking to ensure our Sustainability Commitment and ESG undertakings/objectives are up to standard
and lead the way.
Climate issue
Type
Business impact
Supply chain influence
Transition
RISK: Suppliers don’t
develop/supply low
emission alternatives
fast enough or at all,
increased competition
Management response
Encourage supplier compliance with Responsible Sourcing Policy.
Choose low-emission/renewable alternatives where possible and practical.
Financial
impact
Level of
financial
impact
Time
horizon of
impact
Expenses
Med – High
Assets and
Liabilities
Short -
Long
Prepare for potential increased costs, investigate alternative ways of doing things (eg. different products, offsets),
diversified and local supplier base where possible and practical. Consider sustainability criteria in supplier contracts.
Mitigate lead-time delays by agreeing and maintaining acceptable delivery cycles with suppliers, investigate industry
collaboration on sourcing in bulk, Responsible Sourcing Policy compliance – engage with essential suppliers in
a positive way - sell the plus for them.
ANNUAL REPORT 2023 39
Table 4: Anticipated financial impacts of material risks and opportunities – Carbon intensive scenario
Climate issue
Type
Business impact
Increased severity of
extreme weather
Physical
RISK: Flooding of sites,
health and safety risk,
difficulty distributing
content, business
continuity risk
Management response
Financial
impact
Expenses
Assets and
liabilities
Revenue
Level of
financial
impact
High
High
Med
Time
horizon of
impact
Short -
Long
Regularly review and update business continuity plans, test run Business Continuity Plan (BCP) at least annually, review
redundancy model to ensure remote management of transmission can happen during extreme weather, undertake
physical risk assessment on all sites and make improvements.
Review all staff capability to work remotely, review options to collaborate with others in industry, develop severe
weather communications plan.
Set severe weather thresholds for closing office, train reporters on risk assessment and have them undertake training
for severe weather events.
Multiple channels available for content access, contingency plans include ability to print/deliver from alternate sites and
using alternate routes/methods, promote the e-edition of the paper to subscribers and email a link when papers cannot
be delivered.
Climate issue
Type
Business impact
NZME's reputation
Transition
OPPORTUNITY: Fulfil key
communication role for
communities/society -
inform, educate, influence
and grow trust
Management response
Financial
impact
Level of
financial
impact
Time
horizon of
impact
Revenue
Med
Capital and
finance
Short -
Long
Plan the channels where it would be appropriate to play a lead role in informing and commenting on climate change
activity and risks.
Consider editorial board to set out NZME's position on climate change and key messages we want to support.
Develop partnerships and give a voice to trusted experts on climate change and ensure they are associated with
our brand, whilst ensuring balance and accuracy are upheld.
Positioning for a low carbon future
NZME’s Sustainability Commitment sets out
initiatives under three pillars: Our Communities,
Our People and Our Environment, encapsulating
our commitment to protecting the craft of
journalism and broadcasting to achieve our
purpose: Keeping Kiwis in the know.
NZME's initial transition planning includes reviewing
and aligning its Sustainability Commitment to its
material environmental, social and governance
issues, and refining and strengthening the
supporting sustainability objectives, metrics
and targets. The environmental pillar within our
Sustainability Commitment now focuses on the
material part we can play in supporting New
Zealand's transition to a low carbon economy
- reducing and mitigating our own impact, and
accelerating Kiwis awareness and engagement
on environmental issues. We recognise that
climate-related risks are just one part of the bigger
picture of environmental risks New Zealand is
facing, including resource constraints relating to
biodiversity loss, water and air pollution - and so our
Sustainability Commitment sets out to encompass
these challenges.
The first step in our transition towards a low carbon
economy has been to establish a baseline measure
of our greenhouse gas emissions. Scope 1 and 2
emissions have been disclosed on 41 and we have
commenced the process of measuring our Scope
3 emissions, which are expected to be disclosed
in 2025. We have established science-aligned
targets for our Scope 1 and 2 emissions, which
are consistent with limiting global warming to
1.5 degrees celsius.
40 NEW ZEALAND MEDIA AND ENTERTAINMENT
CLIMATE-RELATED
DISCLOSURES
CONTINUED
We are developing our environmental management
plan, which will provide a tactical roadmap to achieve
our emissions targets and enable us to establish
decision making to support our transition. Our
environmental management plan will also set out
our actions to reduce the environmental impact of
our products, including our printed publications and
media platforms, which will play an important part in
supporting our industry and our customers' transition
to a low-emissions, climate-resilient future state.
While our environmental management plan is in
development, some projects have commenced
already. These include:
•
•
•
•
•
NZME has committed to not purchase or lease
any further diesel vehicles, starting from 2023.
NZME has ordered only hybrids for all new fleet
cars since late 2022, replacing vehicles as their
leases expire with hybrids.
The number of fleet vehicles has been reduced
from 151 to approximately 127 during the 2023
round of lease renewals.
NZME operates a number of pool cars, and
a workstream exists which is focused on
understanding if these could be full E.V.s from
their next renewal.
NZME’s electricity contract is being renewed in
2024, and work is underway to evaluate options
for market based contractual instruments such
as fully renewable electricity and renewable
energy certificates.
Additionally, the largest single contributor to NZME’s
Scope 1 and 2 emissions is the Ellerslie print plant.
Consumer trends away from physical print based
media and towards other mediums offered by NZME
have seen print volumes decline year on year, and
this is anticipated to continue. This decrease in
print volumes will decrease energy demand and
emissions at the Ellerslie site.
We will continue to review our climate-related risks
and opportunities, and the extent to which these
act as an accelerator or aggravator to the current
trends and evolution of our media platforms and our
subsequent capital deployment decision-making.
RISK MANAGEMENT
NZME undertook scenario analysis to identify and
assess the scope, size and impact of its climate-
related risks and opportunities. We started by
identifying the broadest range of potential climate
risks and opportunities that may plausibly impact
our business under all scenarios. We then used the
scenario-specific narratives to explore the relevance
of each risk or opportunity and whether it may
worsen or improve under the respective scenarios.
To prioritise the severity of the risks and
opportunities present under a particular scenario,
we evaluated their likelihood and consequence,
where 'likelihood' evaluated the speed of onset,
or the time the risk or opportunity was expected
to be first experienced (in the short, medium,
or long term) and 'consequence' related to the
potential impact on NZME's shareholder value,
growth and reputation.
NZME's priority risks and opportunities present
under each scenario are outlined in Tables 2 – 4
on page 37 to 39. We evaluated our vulnerability to
the identified priority risks and opportunities
to establish our risk control measures and
management response.
No part of NZME's value chain was excluded from
its climate-related assessment.
NZME undertook its inaugural climate-related
assessment in May 2023 and will continue to
evaluate and monitor its climate-related risks
and opportunities annually.
NZME has integrated its climate-related risk into
the NZME Risk Management Framework.
Process for prioritising climate-related risks
relative to other risk types
Climate-related risks are assessed and prioritised
on the same basis as NZME’s other risks are
categorised in its Group risk matrix. That matrix
incorporates an assessment of likelihood and
impact for each risk and prioritises risks accordingly.
NZME recognises that there are many
interconnections between the identified climate-
related risks and other risks and it is for this reason
that NZME has fully integrated climate-related risk
into the risk management framework.
ANNUAL REPORT 2023 41
METRICS AND TARGETS
Greenhouse Gas Emissions
NZME's base year (2022) and 2023 Scope 1 and 2 greenhouse gas (GHG) emissions, emissions intensity, and
industry-based metrics are provided in Table 5. We are measuring Scope 3 emissions, which are planned to
be reported in 2025.
Table 5: NZME’s GHG emissions and industry based metrics
Greenhouse Gas
Emissions
Scope 1 / Category 1
(T CO2e)
Scope 2 / Category 2
(T CO2e)
Emissions intensity
(TOTAL T CO2e per FTE
2023
721*
655*
1.15
2022
(base year)
Change
2032 Target
781*
683*
1.22
(7.7%)
50.4% / 393 T CO2e
(4.1%)
50.4% / 344 T CO2e
(5.7%)
N/A
Industry based metrics
Scope
2023
2022
(base year)
Change
Fleet Fuel
(Petrol L)
Fleet Fuel
(Diesel L)
Forklift Fuel
(LPG Kg)
Stationary energy
(Natural Gas GJ)
Diesel Generators
(Diesel L)
1
1
1
1
1
144,865
154,550
(6.3%)
30,098
35,248
(14.6%)
5,295
4,853
4,996
5,790
5,476
0
(8.5%)
(11.4%)
N/A
(4.1%)
Purchased electricity (kWh)
2
8,833,274
9,206,848
* Scope 1 & 2 TCO2e emissions for the years ended 31 December 2022 (base year) and 31 December
2023 have been included in the scope of PwC’s limited assurance engagement. No other amounts or
calculations in this table have been included in the assurance engagement and are not covered by the
limited assurance report issued.
Our progress
Progress has been made in all areas against the
2022 base year in our first year of reporting. Fuel
and Diesel usage has been reduced with both a
reduction in the fleet and the commencement of
transition to hybrid and more efficient vehicles.
Electricity and gas usage is also down with lower
activity and increased efficiency.
NZME's FY32 Scope 1 and 2 target is a 50.4%
absolute reduction from 2022 and net zero by 2050.
This science-aligned target follows a pathway of
limiting global warming to 1.5 degrees, using the
methodology set by the Science Based Target
initiative. In line with this methodology, we are
aiming to achieve at least 90% of our long term
emissions target before we offset our residual
emissions using verified voluntary offsets certified
under an internationally accepted scheme to be
selected closer to our target date. In 2023,
we achieved a 6% reduction on our Scope 1 and 2
emissions, which is on track towards our science-
aligned targets.
42 NEW ZEALAND MEDIA AND ENTERTAINMENT
CLIMATE-RELATED
DISCLOSURES
CONTINUED
Criteria used to prepare our greenhouse gas
emissions statement
NZME's GHG emissions inventory has been prepared in
accordance with the Greenhouse Gas (GHG) Protocol
Corporate Accounting Standard and ISO14064-1.
NZME has taken an operational control consolidation
approach in the preparation of its GHG emissions
inventory. Emissions measured in this approach
arise from the business units owned or controlled
by NZME. Our emissions factors were sourced from
Te ine tukunga: He tohutohu pakihi - Measuring
emissions: A guide for organisations: 2023 emission
factors summary, published by the Ministry for the
Environment (MfE Report). These are based on the 100-
year Global Warming Potential (GWP values) (GWP100)
for the IPCC’s Fifth Assessment Report (AR5).
As adapted from the GHG Protocol and ISO14064-
1:2018, these emissions were classified into the
following categories:
•
•
Direct GHG emissions (Scope/Category 1):
GHG emissions from sources that are
owned or controlled by the company.
Indirect GHG emissions (Scope/Category
2): GHG emissions from the generation
of purchased electricity, heat and steam
consumed by the company.
Table 6 summarises the methodology for collection
of data and relative uncertainty associated with the
data source.
Table 6: Emissions sources and methodology for data collection
Emissions
Source
Scope Data source
Data
unit
Uncertainty
Fleet – vehicles
(petrol/diesel)
Fleet – forklift (LPG)
Natural gas
- boiler
Diesel - Generator
Refrigerant
Purchased
electricity
1
1
1
1
1
2
Obtained volumes of fuel from
fuel card reports, supplier
invoices and credit card
spend data and applied the
appropriate emissions factors
from the MfE Report.
Obtained volumes of LPG
purchased from supplier
invoices and applied the
appropriate emissions factor
from the MfE Report.
Obtained volumes of natural
gas purchased from supplier
invoices and applied the
appropriate emissions factor
from the MfE Report.
Obtained volumes of diesel
purchased from supplier
invoices and applied the
appropriate emissions factor
from the MfE Report.
Obtained confirmation that
there were no top-ups of
refrigerants from the supplier
for the Ellerslie site.
L
kg
GJ
L
L
Obtained the volume of
electricity consumed from
supplier invoices and applied
the appropriate emissions
factor from the MfE Report.
kWh
Low - relied upon the supplier to
provide complete and accurate
invoice data, and that this is an
appropriate representation of
activity.
Low - relied upon the supplier to
provide complete and accurate
invoice data, and that this is an
appropriate representation of
activity.
Low - relied upon the supplier to
provide complete and accurate
invoice data, and that this is an
appropriate representation of
activity.
Low - relied upon the supplier to
provide complete and accurate
invoice data, and that this is an
appropriate representation of
activity.
Medium - relied upon the supplier
to provide complete and accurate
service data for the Ellerslie site,
however, invoices need to be
manually checked to gather data
for other sites
Low - relied upon the supplier
to provide complete and accurate
invoice data, and that this is
an appropriate representation
of activity
ANNUAL REPORT 2023 43
Data was collected for the period 1st January 2022 –
31st December 2023. In most cases, source supplier
data was used to prepare this emissions inventory.
There were some areas where this was not available
due to the outsourcing of processes, limiting the
ability to access specific information. These are
summarised below:
•
Fleet – Vehicles. Some petrol and diesel use was
paid for by personal cards and reimbursed for.
This was captured from the expenses system.
•
•
Refrigerant data - For Ellerslie (key production
site) where we assume control/responsibility
for cooling systems, we have confirmed no top
ups of Refrigerants, we do not have the data for
other sites because they are leased/shared and
it is unavailable.
Diesel used in onsite generators – Where
we have control of site generators we have
captured usage via Invoices and card spend,
this was a manual process, and human error
may have resulted in top ups being missed from
the reported data. We do not have the data for
other sites because they are leased/shared and
it is unavailable.
Risks and opportunities metrics
Our 2023 material risks and opportunities metrics are summarised in Table 7. These consider the current
physical and transitional risks and opportunities experienced in 2023. Quantitative methods, including
reviewing our assets register, accounts and media platform data, were used to establish the results for
all metrics.
Table 7: Risks and opportunities metrics
Metric
2023
Amount or percentage of assets or business
activities vulnerable to transition risks
Amount or percentage of assets or business
activities vulnerable to physical risks
One gas boiler, 18 diesel and 109 petrol vehicles – vulnerable
to price shocks associated with transition towards low carbon
energy sources.
100% business exposed to legislative reporting requirements
– climate disclosure
One asset - (Ellerslie print plant) located in 1/100 year flood
zone. However, a risk assessment undertaken
in 2023 identified this asset as vulnerable to a 1/200
year event.
Transmission equipment – vulnerable to disruption associated
with Auckland floods and Cyclone Gabrielle
Channel/print delivery network – vulnerable to disruption
associated with Auckland floods and Cyclone Gabrielle
Assets or business activities aligned with
climate-related opportunities
NZME’s strategy is to grow its digital channels recognising
that these will be the dominant way to reach audiences.
This strategy is aligned to climate related opportunities.
Amount of investment deployed toward
climate-related risks and opportunities
$661k (18 Vehicles) - invested in 2023 towards the three-year
rollover of our vehicle fleet to hybrids.
Internal emissions price
NZD$87 per tonne of CO2e – this follows the ‘central’ value per
Treasury’s recommended shadow emissions values for 2023
Management remuneration linked to climate-
related risks and opportunities
Management remuneration is not currently linked to
climate-related risk and opportunities nor incorporated into
remuneration policies. However, the People, Remuneration
and Nominations Committee of the Board will consider how
to incorporate climate-related performance metrics for
relevant roles at NZME in future.
44 NEW ZEALAND MEDIA AND ENTERTAINMENT
2023 AWARDS
NZME has been recognised with
a number of industry awards in
2023, celebrating our people and
their achievements:
NZME Podcast Network - Prime Time
James Butcher, Sarah Catran,
Iheartradio And The NZME
Podcast Network, NZME
IAB DIGITAL
ADVERTISING AWARDS
INMA
Categories won by NZME:
2023 DIGITAL SALES
EXCELLENCE (TEAM)
NZME Digital Direct Team
Matt Fussell, NZME
SALES AND AD-OPERATIONS
AWARDS
2023 JUNIOR AD OPERATIONS
EXCELLENCE
Toni Gleason - Rising Star, NZME
2023 SENIOR AD OPERATIONS
EXCELLENCE
Greg Lockton, NZME
James Park - Digital Navigator,
NZME
2023 TECHNICAL AD
OPERATIONS EXCELLENCE
Jason Nockels, NZME
CHANNEL EXCELLENCE
AWARDS
2023 BEST USE OF AUDIO
Wild Secrets Sex.life - Lauren
Simpkins, Sarah Catran, Annabel
Ferguson NZME iHeartradio Team
GRAND AWARDS
2023 DIGITAL SALES
EXCELLENCE (TEAM)
NZME Agency Team,
NZME Digital Direct Team,
Matt Fussel
2023 DIGITAL PRODUCT OF THE
YEAR
Digital Dispatch Automation,
Jason Nockels, Stephen Geal, NZME
BEST INNOVATION IN
NEWSROOM TRANSFORMATION
Te Rito
HRD AWARDS NEW ZEALAND
2023
HR TEAM OF THE YEAR
(> 500 STAFF)
NZME Culture & Performance team
NZ PODCAST AWARDS
BEST BUSINESS PODCAST
Cooking the Books with
Frances Cook
BEST FICTION PODCAST
Tom Sainsbury's Small
Town Scandal
BEST HEALTH AND WELLBEING
PODCAST
No Such Thing As Normal
BEST RADIO PODCAST
ZM's Fletch, Vaughan & Hayley
BEST SEX AND RELATIONSHIP
PODCAST - SPONSORED BY ROVA
Sex.Life
NZ RADIO AWARDS
BEST CONTENT
BEST SHOW PRODUCER OR
PRODUCING TEAM - TALK SHOW
Laura Beattie, Laura Cunningham,
Anthony Milicich, Brooke Hobson
Heather du Plessis-Allan Drive
Newstalk ZB Network
BEST VIDEO - SHORT FORM
Rocktober - Bar Video Claire
Chellew, Kate Britten, Tom
Harper, JD Hubbard, Angelina
Grey, Matt Heath, Jeremy Wells,
NZME Vision Team, John Phillips
Radio Hauraki Network
BEST PODCASTS
BEST ENTERTAINMENT PODCAST
- EPISODIC
The ACC Agenda Podcast Matt
Heath, James McOnie, Mike Lane,
Joseph Durie, Adam Pomana,
The ACC
BEST HOSTS
BEST MUSIC NETWORK
BREAKFAST SHOW
ZM's Fletch, Vaughan & Hayley
Carl Fletcher, Vaughan Smith,
Hayley Sproull, Anna Henvest,
Carwen Jones, Jared Pickstock,
ZM Network
BEST TALK PRESENTER -
BREAKFAST OR DRIVE
The Mike Hosking Breakfast Mike
Hosking, Michael Allan, Sam
Carran, Glenn Hart, Newstalk ZB
Network
BEST TALK PRESENTER - NON-
BREAKFAST OR DRIVE
Marcus Lush Nights Marcus
Lush, Dan Goodwin, Newstalk ZB
Network
BEST NEW BROADCASTER
BEST NEW BROADCASTER -
JOURNALIST
Jason Walls, Newstalk ZB
Network (joint)
ANNUAL REPORT 2023 45
BEST NEW BROADCASTER - ON-AIR
Meg Wyatt, ZM & The Hits Network
BEST NEWS & SPORT
BEST NEWSREADER
Niva Retimanu, Newstalk ZB
Network
BEST SPORTS READER,
PRESENTER OR COMMENTATOR
Jason Pine Andy McDonnell,
Newstalk ZB Network
BEST SPORTS STORY - TEAM
COVERAGE
Birmingham 2022
Commonwealth Games
Elliott Smith, Malcolm Jordan,
Nick Bewley, Jason Pine, Andy
McDonnell, Andrew Alderson,
Mark Kelly, Angus Mabey, Kate
Wells Newstalk ZB & Gold Sport
BEST MARKETING &
INTEGRATION
BEST CLIENT PROMOTION/
ACTIVATION
The Hits Jono & Ben's $10,000
Chip Pic with Heartland Chips
Harriett Whiting, Ben Humphrey,
Jono Pryor, Ben Boyce, Joel
Harrison, Alastair Boyes, Jordan
Whiu, Tom Dyton, Joshua, The
Hits Network
BEST MARKETING CAMPAIGN
Jono & Ben Kids Call the Shots
Jacqui Davis, Gemma Vovchenko,
Xanthe Williams, Emily Hancox,
Joseph Senior, Jono Pryor,
Ben Boyce, The Hits Network
BEST EFFECTIVE COMMERCIAL
CAMPAIGN
Does it do what a Daikin does?
Graham Dolan, Arron Smith, Holly
McLaughlin, Nathalie O'Toole,
Emma Freeman, Gerald Stewart,
NZME
SALES TEAM OF THE YEAR
NZME Christchurch Matt
Bowness, Anna McKenzie, Ben
Harris, Danielle Torr, Chloe
Hebden, Amy Green, Jimmy
Farrant, Ian Avery, Lynne-Puddy
Greenwood, Esther Hall, Adam
Miller, Victoria McArthur, Sabia
Harrington, NZME Christchurch
BEST COMMUNITY CAMPAIGN
Fill The Bus Paul Hickey, Hamish
Gleeson, The Hits Rotorua
NEWS WEBSITE OF THE YEAR
INTERNET
NZHerald.co.nz
STATION OF THE YEAR
ALL MEDIA
NETWORK / METROPOLIAN
STATION OF THE YEAR
Newstalk ZB, NZME
SIR PAUL HOLMES
BROADCASTER OF THE YEAR
Mike Hosking, Newstalk ZB
OUTSTANDING CONTRIBUTION
TO RADIO
Barry Soper, Newstalk ZB
SERVICES TO BROADCASTING
Phil Quinney, NZME
NEW ZEALAND
SHAREHOLDERS
ASSOCIATION
BUSINESS JOURNALISM
AWARDS
EMERGING JOURNALIST OF THE
YEAR 2023
Ella Somers, BusinessDesk
CATEGORY WINNERS AND
FINALISTS
NEWS AWARD
Cécile Meier, BusinessDesk,
Te Whatu Ora to crack down on
health consultant spend
COMMENTARY AWARD
Jenny Ruth, BusinessDesk,
Ryman burned through hundreds
of millions of dollars
PRIDE IN PRINT
AWARDS
Categories won by NZME:
Six awards in total including four
gold medals for print quality
Best Web Offset Coldset medium
Ultimate prize for quality within the
newspaper publication category
VOYAGER MEDIA
AWARDS
BROADCAST AND DIGITAL
BEST ORIGINAL PODCAST -
ONGOING/EPISODIC
Between Two Beers – Steven
Holloway, Seamus Marten, NZME
BEST INDIVIDUAL
INVESTIGATION
Nicholas Jones, NZ Herald, NZME
– Aged care crisis
GORDON MCLAUCHLAN TRAVEL
JOURNALISM AWARD
Thomas Bywater, NZ Herald
Travel, NZME
BEST REPORTING - LOCAL
GOVERNMENT
Oliver Lewis, BusinessDesk,
NZME
BEST REPORTING - SCIENCE |
SPONSORED BY SCIENCE MEDIA
CENTRE
Jamie Morton, NZ Herald, NZME
BEST REPORTING - SOCIAL
ISSUES, INCLUDING HEALTH AND
EDUCATION
Nicholas Jones , NZ Herald, NZME
POLITICAL JOURNALIST OF THE
YEAR
Audrey Young, NZ Herald, NZME
PRINT/TEXT JOURNALISM
BEST OPINION WRITING
Vaimoana Mase, NZ Herald,
NZME
BEST FEATURE WRITING - SOCIAL
ISSUES, INCLUDING HEALTH AND
EDUCATION
Alex Spence, NZ Herald, NZME
– Losing Cassandra
METROPOLITAN NEWSPAPER
OF THE YEAR
NZ Herald, NZME
VOYAGER NEWSPAPER
OF THE YEAR
NZ Herald, NZME
DELOITTE TOP 200
AWARDS 2023
DIVERSITY AND INCLUSION
LEADERSHIP
NZME (Te Rito)
46 NEW ZEALAND MEDIA AND ENTERTAINMENT
THE NZME
BOARD
Barbara Chapman
Independent Chairman
Barbara Chapman served as Chief Executive and
Managing Director of ASB Bank Limited from 2011 until
February 2018. She has extensive business experience
gained through a successful career in banking and
insurance. During her career she has held a number of
senior and executive roles in retail banking, marketing,
communications, human resources and life insurance.
Barbara is passionate about people and culture, and
promoting best practice in community, governance and
sustainability. She is the Chairman of Genesis Energy
Limited, Deputy Chair of The New Zealand Initiative
and holds an independent directorship on the board
of Fletcher Building Limited and Bank of New Zealand.
Barbara was appointed Chairman of the NZME Board in
June 2020.
Carol Campbell
Independent Director
Carol Campbell is a Chartered Accountant and Fellow
of CAANZ, and Chartered member of the Institute of
Directors. Carol was a partner at Ernst & Young for over
25 years and has been a professional director for the last
10 years. Carol has extensive financial experience and
a sound understanding of efficient board governance
and chairs NZME’s Audit and Risk Committee.
Carol is chair of NZ Post Limited and a director
of T&G Global Limited, Asset Plus Limited and
Chubb Insurance Limited.
ANNUAL REPORT 2023 47
David Gibson
Independent Director
David has more than 20 years’ investment banking
experience, including as Co-Head of Investment
Banking in New Zealand for Deutsche Bank and
Deutsche Craigs where he completed a number of
New Zealand’s largest M&A and equity transactions,
including within the media industry.
David is currently Deputy Chair of Goodman (NZ) Limited
and a Director of Freightways, Rangatira Limited and
has recently been appointed as a Director of Contact
Energy Limited.
David holds a Bachelor of Laws (Honours) and Bachelor
of Commerce from the University of Canterbury.
Sussan Turner
Independent Director
For the past 25 years Sussan has held senior leadership
roles across media companies, including Group CEO
of MediaWorks, Managing Director of Radio Otago and
CEO of RadioWorks. She is currently Group CEO and
Director of Aspire2 Group Limited, one of the leading
private tertiary education groups in New Zealand and
is passionate about building executive teams and
company cultures.
Sussan has extensive experience as a director and is
appointed by Government to the board of Auckland
University of Technology (AUT) as Pro-chancellor.
Guy Horrocks
Independent Director
Guy established himself as an early pioneer of the
mobile app industry co-founding the world’s first
commercial iPhone app company in 2007, Polar
Bear Farm. He is one of a number of high powered,
experienced New Zealand entrepreneurs who’ve
built internationally successful digital enterprises.
With clients including Expedia, DreamWorks, HBO,
OREO, CNN, Time Magazine as well as NZ Herald,
Horrocks helped launch over 100 mobile apps with
his award winning mobile agency Carnival Labs, many
of which were featured by Apple.
Guy Horrocks has since launched a new real-time data
warehouse called SOLVE and is also a director of New
Zealand Mint Limited, New Zealand’s only precious metal
mint, and an advisory board member of Tracksuit Limited.
48 NEW ZEALAND MEDIA AND ENTERTAINMENT
THE NZME
EXECUTIVE TEAM
Michael Boggs
Chief Executive Officer
Michael was appointed CEO of New Zealand Media and Entertainment (NZME)
in March 2016. Prior to that he held the Chief Financial Officer position at NZME.
Michael’s core focus at NZME has been to develop and implement a group wide
strategy to accelerate growth across NZME’s brands particularly in the areas of
subscription and classified offerings, digital and video content, while ensuring the
sustainable growth of the company’s traditional print and radio platforms.
Michael has extensive senior executive experience including as Chief Financial Officer
at leading insurance company Tower Limited. While at Tower, Michael managed the
company’s multibillion-dollar assets, its Pacific Islands operations, earthquake recovery
programme and the sale of Tower’s life insurance, health insurance and investment
management businesses. This industry leading work was recognised in 2014 when
Michael was awarded CFO of the year at the annual New Zealand CFO Awards.
Michael also has significant background in the telecommunications and technology
sectors with executive roles in the finance, commercial and business functions of
major organisations including Telstra’s New Zealand operations.
Greg Hornblow
Chief of OneRoof
Greg was appointed as the Chief of OneRoof in January 2023.
Greg has an incredibly strong commercial background, with more than 30 years of
experience working alongside real estate professionals in a variety of roles and in
advertising and marketing, including previously at NZME.
His passion for the real estate industry and proven track record will ensure OneRoof is
well placed to create further value for our agent partners.
Carolyn Luey
Chief Digital and Publishing Officer
Carolyn was appointed Chief Digital and Publishing Officer in August 2021.
After five years at NZME, Carolyn left as Chief Operating Officer in December 2016.
She then went on to senior transformational roles at MYOB and Vodafone where she
was Chief Consumer Officer.
With extensive experience as a strategic business leader in large New Zealand
telecommunications, technology and media companies, Carolyn brings a wealth of
knowledge and understanding of how best NZME can deliver growing digital audience
engagement for our commercial partners.
ANNUAL REPORT 2023 49
David Mackrell
Chief Financial Officer
David was appointed Chief Financial Officer of NZME in March 2019, leading NZME’s
Finance, Technology, Legal and Strategy Functions. He moved to NZME from Heartland
Bank where he was their Chief Financial Officer.
David started his professional career at Ernst & Young as an Auditor before joining
Air New Zealand in 1992. His career at Air New Zealand spanned 25 years and a large
gamut of senior financial and commercial roles, finishing with the company as Deputy
Chief Financial Officer.
Katie Mills
Chief Marketing Officer
Katie joined the NZME Executive Team in December 2018 assuming leadership of the
company’s Marketing and Communications functions. Immediately prior, Katie held the
role of Group Marketing Director at Aspire2 Group Limited and was previously General
Manager (Global) Marketing & Communications at Opus International Consultants.
Along with Katie’s wide marketing industry experience, she also brings to her role, more
than 20 years of media-specific experience. 15 of those years were spent at MediaWorks
in senior leadership positions including as Head of Marketing, successfully developing
and delivering marketing and brand strategies for a portfolio of radio, digital, event and
television ventures.
Jason Winstanley
Chief Audio Officer
Jason is one of New Zealand’s most experienced audio executives with extensive
experience across music and talk radio. He has led high profile and successful
music radio brands including seven years as Assistant Content Director at ZM and
five years as Content Director of The Hits. He also led the successful transition
of ‘Classic Hits’ to the ‘The Hits’ brand in 2014.
In his most recent role as Head of Talk for NZME, Jason has led Newstalk ZB
to record audience growth and continued commercial success.
Jason's role includes responsibility for the Audio business and the content delivery
to support audience and revenue growth across NZME’s radio networks.
50 NEW ZEALAND MEDIA AND ENTERTAINMENT
CORPORATE
GOVERNANCE
GOVERNANCE FRAMEWORK
The Company is listed on the NZX Main Board and
has a Foreign Exempt Listing on the ASX (both
under the ticker code “NZM”). The ASX Foreign
Exempt Listing category is based on a principle
of substituted compliance recognising that, for
secondary listings, the primary regulatory role and
oversight rests with the home exchange and the
supervisory regulator in that jurisdiction. As such,
NZME is required to comply with a limited set of ASX
Listing Rules.
The Company’s corporate governance framework,
as described in this section, therefore primarily
takes into consideration contemporary standards
in New Zealand, incorporating the NZX Corporate
Governance Code (“NZX Code”).
The Group is committed to having a strong
governance framework and therefore complies
with the recommendations of the NZX Code (unless
specifically stated otherwise). The corporate
governance policies referred to in this section reflect
the Group’s governance framework as at 31 December
2023 (unless otherwise stated) and are available
on the Company’s website. The Board of NZME has
approved this corporate governance statement.
PRINCIPLE 1 - CODE OF ETHICAL BEHAVIOUR
Directors should set high standards of ethical
behaviour, model this behaviour and hold
management accountable for these standards
being followed throughout the organisation.
Code of Conduct & Ethics
The Company’s Code of Conduct & Ethics governs
the Company and its subsidiaries’ commercial
operations and the conduct of directors, employees,
consultants and all other people when they represent
the Company and its subsidiaries. The Code of
Conduct & Ethics comprises certain fundamental
principles and demonstrates the high standards
of conduct expected of us. The current Code
of Conduct & Ethics was updated in June 2023.
Reporting of breaches of the Code is encouraged
and steps for doing so are set out in the Code of
Conduct & Ethics and the Whistleblower Policy.
The Company has provided training on the Code
of Conduct & Ethics in the form of a video series on
key points relevant to employees.
The Company also has an Editorial Code of Ethics
which was extensively reviewed during 2022 to
align with international best practice. This code
is published on the Company’s website and
highlighting our principal responsibility to the truth
– and to our communities and audiences – and our
commitment to journalism of the highest quality
possible that earns the trust of our audience. The
Code states our belief that freedom of the press and
dissemination of editorial content is ta cornerstone
of a healthy, thriving democracy. The Code
includes our responsibilities in relation to accuracy,
independence, opinion, editing, diversity, conduct
and integrity.
Securities Trading Policy
The Securities Trading Policy, which was reviewed
and updated based on best practice in 2022 and
is available on the Company’s website, details the
Company’s trading policy and guidelines, including
trading restrictions on dealing in the Company’s
quoted financial products. This policy applies to
the directors and all employees and contractors.
The Securities Trading Policy places additional
trading restrictions on the directors, the Chief
Executive Officer (“CEO”) and their direct reports
(and employees reporting directly to them), all
administrative staff of the CEO and direct reports
referred to above and anyone else notified by
NZME’s General Counsel.
PRINCIPLE 2 - BOARD COMPOSITION
& PERFORMANCE
To ensure an effective Board, there should be
a balance of independence, skills, knowledge,
experience and perspectives.
Role of the Board and Board Charter
The business and affairs of the Company is
managed under the direction and supervision of the
Board currently comprised (and as at 31 December
2023 was comprised) of independent
Chairman, Barbara Chapman, and independent
directors; Carol Campbell, David Gibson,
Sussan Turner and Guy Horrocks. The directors
acknowledge their duty to act in good faith and in
the best interests of the Company. The objective
of the Company is to generate growth, corporate
profit and shareholder gain from the activities of the
ANNUAL REPORT 2023 51
Group. In pursuing this objective, the role of the
Board is to assume accountability for the success
of the Company by taking overall responsibility
for the strategic direction and monitoring
of operational management of the Group in
accordance with good corporate governance
principles. More details regarding the main
functions of the Board and the distinction from the
roles of management can be found in the Board
Charter available on the Company’s website.
No person ceased to be a director of the Company
during the financial year ended 31 December 2023.
Director Nomination and Appointment
Directors are appointed by the Company’s
shareholders, with rotation and retirement being
determined by the Constitution. The Board
may appoint directors to fill casual vacancies.
Directors appointed to fill casual vacancies are
required to retire and stand for election at the
first annual shareholders’ meeting after their
appointment. The People, Remuneration and
Nominations Committee recommends to the
Board potential candidates for appointment as
directors. The Committee follows the nomination
and appointment processes set out in the People,
Remuneration and Nominations Committee
Charter available on the Company’s website. The
Company enters into written agreements with each
newly appointed director establishing the terms of
their appointment.
Director Independence and Profiles
All of the Company’s directors, including the Chair,
are independent directors for the purposes of the
NZX Listing Rules as none of them are executives
of the Company or have direct or indirect interests
or relationships that could reasonably influence,
or could reasonably be perceived to influence,
in a material way, their decisions in relation to
the Company. The profile for each director is
available on the Company’s website and on page
46-47 of the Annual Report. Information about
director attendance at meetings and the date of
appointment of each director is available on page
51. Information on director ownership interests are
set out on page 55.
Diversity and Inclusion
The Group believes that a diverse and inclusive
workforce is essential for it to be able to deliver
its strategic objectives and continue to meet its
responsibilities to its customers, its employees,
the communities in which it works, and its
shareholders.
The Group is currently operating in accordance
with, and applying the principles of, its Diversity
and Inclusion Policy which is available on the
Company’s website.
The Our People section on pages 20 and 23 of
the Annual Report sets out more detail about our
diversity and inclusion objectives and progress
towards achieving them. In accordance with
the Diversity and Inclusion Policy, the Board
assesses those objectives and NZME’s progress
towards achieving them on an annual basis. The
Board is comfortable with the Company’s 2023
performance with respect to its Diversity and
Inclusion Policy and objectives but notes the
ongoing nature of efforts to meet those objectives.
The table below includes the quantitative breakdown as to the gender composition of NZME’s Board and
Officers as at the balance date.
As at
Board
Officers 1
Male
Female
31 December 2023
31 December 2022
2
2
3
3
Gender
Diverse
0
0
Male
Female
4
7
3
3
Gender
Diverse
0
0
1 The term ‘Officer’ is defined in the NZX Listing Rules as a person, however designated, who is concerned
or takes part in the management of the Issuer’s business, but excludes (i) a person who does not report
directly to the Board or (ii) a person who does not report directly to a person who reports to the Board.
NZME has interpreted this to mean the Chief Executive and any person reporting to the Chief Executive
or the Board directly. The numbers above therefore include the CEO and other members of the Group
Executive Team.
52 NEW ZEALAND MEDIA AND ENTERTAINMENT
CORPORATE
GOVERNANCE
CONTINUED
Director Access to Training, Information
and Advice
The Board did not identify a need for any other
standing Board committees.
On appointment the Company’s directors are
offered induction training as to the responsibilities
of the directors and to enable the director to
become familiar with the Company’s operations
and sites. Further training on pertinent topics is
provided to the Board during the year. All directors
have access to the advice and assistance of
the General Counsel on the Board’s affairs and
governance matters. In addition, all directors may
access such information and seek independent
advice as they consider necessary to fulfil their
duties and responsibilities.
Performance Review
The Chair meets annually with directors of
the Company to discuss their performances.
The Board reviews its performance as a whole,
and the performance of its committees, on an
annual basis. The Board may choose to use external
facilitators, where appropriate, to assist with
reviewing the performance of directors, the Board
and its committees.
PRINCIPLE 3 - BOARD COMMITTEES
The Board should use committees where this
will enhance its effectiveness in key areas, while
retaining Board responsibility.
The Board has two standing Committees; the Audit
& Risk Committee and the People, Remuneration
and Nominations Committee, to assist in carrying
out its responsibilities. The Committees operate
under Board approved charters which are available
on the Company’s website.
The Board may establish other committees from
time to time to deal with specific projects or matters
relating to the Company’s various activities.
The Board does not have a separate Health
and Safety Committee, but Health and Safety
is considered by the full Board.
The Company also has an NZME Takeover Response
Manual (not publicly available) as recommended by
Recommendation 3.6 of the NZX Code.
Audit & Risk Committee
The Committee consists of three independent
directors (one of whom has an accounting and
financial background). The functions of the
Committee are to:
•
•
•
Review, consider and if necessary, investigate
any reports or findings arising from any audit
function either internally or externally;
Evaluate financial information submitted to it,
along with relevant policies and procedures; and
Assess the effectiveness of risk management
throughout the Group.
The Committee is also responsible for
communicating and engaging with the external
auditors and for oversight and review of the risk
management framework. For further information,
also refer to the Committee’s charter which is
available on the Company’s website.
As at 31 December 2023, directors Barbara
Chapman and David Gibson were members of the
Audit & Risk Committee and it was chaired by Carol
Campbell. Employees and external parties may
attend meetings of the Audit & Risk Committee at
the invitation of the Audit & Risk Committee.
People, Remuneration and Nominations
Committee
The People, Remuneration and Nominations
Committee ensures that remuneration policies and
practices are consistent with the strategic goals
of the Group and are relevant to the achievement
of those goals. The Committee also reviews the
remuneration of the CEO and, in consultation with
the CEO, the remuneration packages of executives
reporting directly to the CEO.
ANNUAL REPORT 2023 53
The People, Remuneration and Nominations
Committee also makes recommendations to
the full Board regarding the composition of the
Board, filling of vacancies, appointing additional
directors to the Board, and to review and adopt
corporate governance policies and practices which
reflect contemporary standards in New Zealand,
incorporating principles and guidelines issued
by the Financial Markets Authority and the NZX.
For further information, refer to the Committee’s
charter available on the Company’s website. This
charter was updated to reflect current best practice
in December 2022 including changing the name of
the committee previously knows as the Governance
and Remuneration Committee.
As at 31 December 2023, directors Sussan Turner
and Guy Horrocks were members of the People,
Remuneration and Nominations Committee and
it was chaired by David Gibson. Employees and
external parties may attend meetings of the People,
Remuneration and Nominations Committee at
the invitation of the People, Remuneration and
Nominations Committee.
Board & Committee Attendance 1 January 2023 to 31 December 2023
Director
Barbara Chapman
Carol Campbell
David Gibson
Guy Horrocks
Sussan Turner
Board
10 of 10
10 of 10
10 of 10
10 of 10
10 of 10
Audit & Risk
People, Remuneration
and Nominations
4 of 4
4 of 4
3 of 4
N/A
N/A
N/A
N/A
5 of 5
2 of *2
5 of 5
* Guy Horrocks was appointed to the People, Remuneration and Nominations Committee in June 2023 and
attended his first committee meeting in October 2023.
PRINCIPLE 4 - REPORTING & DISCLOSURE
The Board should demand integrity in financial and
non- financial reporting, and in the timeliness and
balance of corporate disclosures.
Market Disclosure Policy
The Board has policies and procedures in place
to keep investors and staff informed of material
information about the Company and to ensure
compliance with the continuous disclosure
obligations under the Financial Markets Conduct
Act 2013 and the NZX Listing Rules.
The Market Disclosure Policy (available on the
Company’s website) is designed to ensure that:
•
•
There is full and timely disclosure of the
Company’s activities and price sensitive
information to shareholders and the market; and
All stakeholders (including shareholders, the
market and other interested parties) have
an equal opportunity to receive and obtain
externally available information issued by the
Company.
The Company will immediately notify the market of
any material information concerning the Company
in accordance with legislative and regulatory
disclosure requirements.
54 NEW ZEALAND MEDIA AND ENTERTAINMENT
CORPORATE
GOVERNANCE
CONTINUED
Corporate governance documents
The following documents have been adopted by
the Company and are available on the Company’s
website under the Corporate Governance section:
NZME’s Sustainability Commitment aligns with
the UN Sustainability Development Goals – an
international blueprint to achieve a better and more
sustainable future for everyone.
•
•
NZME Constitution
Board Charter
• Code of Conduct & Ethics
•
•
•
•
Remuneration Policy
Diversity and Inclusion Policy
Editorial Code of Ethics
Fraud Policy
• Market Disclosure Policy
• Whistleblower Policy
•
•
•
•
Securities Trading Policy
Audit & Risk Committee Charter
People, Remuneration and Nominations
Committee Charter
Risk Management Policy
• Health and Safety Policy
• Modern Slavery Statements (pursuant to
Australian legislation)
Financial Reporting and Disclosure
The Company is committed to providing financial
reporting that is balanced, clear and objective. The
Audit & Risk Committee oversees the quality, integrity
and timeliness of external reporting. The Group’s
Consolidated Financial Statements for the year ended
31 December 2023 are set out on pages 48 to 103 of
the Annual Report. Also refer to the reports from the
Chair and the CEO in this Annual Report and the NZME
Full Year 2023 Results Presentation (available on the
Company’s website) for additional information.
Non-Financial Reporting and Disclosure
The Company provides non-financial disclosures
relating to Health and Safety, Risk Management, our
interaction with our communities, people and our
environment – see our Sustainability Commitment.
We also include information about our performance
against our operational priorities during the year.
Combined with our promise to keep Kiwis in the
know, NZME’s commitment to sustainable practices
contributes to the prosperity of our business and
our communities, people and the environment.
In 2023 we measured our progress against key
initiatives and objectives for each of the three pillars
of our Sustainability Commitment: Our Communities,
Our People and Our Environment. This is discussed on
pages 16 to 26 of the Annual Report.
NZME continues to develop its Sustainability
Commitment with the guidance of the Board.
Pursuant to the Financial Sector (Climate-related
Disclosure and Other Matters) Amendment Act 2021
the Company has commenced making climate-
related disclosures in this report on pages 27 to 43.
NZME’s Consolidated Financial Statements are
audited by the Company’s external auditor, and its
GHG emissions have been subject to independent
assurance. Non-financial information included in
this Annual Report and other reporting disclosures
that has not been audited or been the subject of
external assurance is internally verified and checked
by NZME’s management team, compared to the
previous reporting period and cross-checked
against other data.
PRINCIPLE 5 - REMUNERATION
The remuneration of directors and executives
should be transparent, fair and reasonable.
Remuneration Policy
The Company’s Remuneration Policy (available on
its website) outlines the Company’s approach to the
remuneration of its directors and executives. The
People, Remuneration and Nominations Committee
is responsible for reviewing non-executive directors’
remuneration and benefits. The pool available to
be paid to non- executive directors is subject to
shareholder approval. The current directors pool
is fixed at $900,000 per annum (as set out in the
Explanatory Memorandum for the Demerger of
NZME by APN dated 11 May 2012) The levels of fixed
fees payable to non-executive directors should
reflect the time commitment and responsibilities
of the role. The People, Remuneration and
Nominations Committee will obtain independent
advice, as necessary, and will also consider the
results of market comparison and a benchmarking
assessment in setting the fixed fees payable to non-
executive directors.
While the Company does not pay equity-based
remuneration to its non-executive directors, it
encourages those directors to hold shares in
the Company to better align their interests with
Directors’ Remuneration
ANNUAL REPORT 2023 55
the interests of other shareholders.The People,
Remuneration and Nominations Committee is
also responsible for reviewing the remuneration
of the CEO and any executive directors and, in
consultation with the CEO, the remuneration
packages of executives reporting directly to
the CEO. The Company conducts external
benchmarking analysis in order to determine the
market rate for a role. The Company provides a
combination of cash and non-cash benefits and
takes a total remuneration approach. The Company
reviews remuneration with the objective of
achieving pay equality, including by gender.
The fees paid to each director depends on the duties of the director, including committee work. Current fees
per annum are as follows:
1 January 2023 to 31 December 2023
Chairman of the NZME Board
Membership of the NZME Board
Chairman of NZME Board Committees
Membership of NZME Board Committees
Membership of OneRoof Advisory Committee
Fees ($)
170,000
100,000
20,000
10,000
7,500
Total
($)
180,000
120,000
130,000
Total fees paid to each director during 2023 are shown in the following table:
Date
appointed
Chairman
of the
Board ($)
Board
Member
($)
Committee
Chair ($)
Committee
Member
($)
Advisory
Committee
($)
Barbara Chapman
18 April 2018
170,000
10,000
Carol Campbell
24 June 2016
100,000
20,000
David Gibson
Guy Horrocks
8 December
2017
8 February
2021
Sussan Turner
16 July 2018
Total fees paid 2023
100,000
20,000
10,000
100,000
100,000
5,000
3,750
108,750
10,000
3,750
113,750
652,500
Directors are also entitled to be reimbursed for all reasonable travel, accommodation and other costs
incurred by them in connection with their attendance at NZME board or shareholder meetings or otherwise
in connection with NZME business. Any such amounts are not included in the table above.
Chief Executive Officer’s Remuneration
Salary
($) A
Bonus
($) B
TIP
($) C
Benefits
($) D
Total
($)
Michael Boggs
873,088
318,906
1,585,259
35,760
2,813,012
A Salary includes normal basic salary and paid leave. B Bonus payments are those paid during the current
accounting period and excludes any bonus accrual not yet paid. This Bonus relates to the 2022 Financial
Year. C TIP relates to the value of shares issued on 3 January 2024 under the Group’s 2020 Total Incentive Plan
(“TIP”) that had an exercise date of 31 December 2023. These shares relate to the 2020 performance and were
originally valued based on a share price of $0.398 in 2020 but were valued at $1.06 per share at the time of
issue and accordingly the higher value is recorded as remuneration for the year. D Benefits relate to company
contributions for KiwiSaver.
56 NEW ZEALAND MEDIA AND ENTERTAINMENT
CORPORATE
GOVERNANCE
CONTINUED
Given the difficult trading environment and
performance in 2023, no incentive payments will be
made in 2024 to the CEO or Executive in respect of
the 2023 year.
Michael Boggs held 1,505,390 shares in the
company as at 31 December 2023 with an additional
1,012,575 shares issued to him on 3 January 2024
in respect of the 2020 Group’s Total Incentive Plan
(“TIP”) and the short term incentive component
of the 2022 TIP. In addition to the remuneration
disclosed above as at 20 February 2024, Michael
Boggs held 1,292,238 performance rights issued to
him under the various TIP shemes. Please refer to
note 4.3 of the Consolidated Financial Statements
for a summary of the TIP and the performance
criteria used to determine performance based
payments.
Employee Remuneration
The Group paid remuneration including benefits
in excess of $100,000 to employees (other than
directors) during the year ended 31 December 2023.
The salary banding for these employees are disclosed
in the following table (bands with zero number of
employees have been excluded).
Remuneration Amount
Employees
Remuneration Amount
Employees
$100,001 - $110,000
$110,001 - $120,000
$120,001 - $130,000
$130,001 - $140,000
$140,001 - $150,000
$150,001 - $160,000
$160,001 - $170,000
$170,001 - $180,000
$180,001 - $190,000
$190,001 - $200,000
$200,001 - $210,000
$210,001 - $220,000
$220,001 - $230,000
$230,001 - $240,000
$240,001 - $250,000
$250,001 - $260,000
$260,001 - $270,000
$270,001 - $280,000
$280,001 - $290,000
$290,001 - $300,000
$300,001 - $310,000
$310,001 - $320,000
$320,001 - $330,000
$330,001 - $340,000
$340,001 - $350,000
$350,001 - $360,000
$360,001 - $370,000
$390,001 - $400,000
$400,001 - $410,000
$420,001 - $430,000
$470,001 - $480,000
$490,001 - $500,000
$510,001 - $520,000
$560,001 - $570,000
$660,001 - $670,000
$690,001 - $700,000
$710,001 - $720,000
$730,001 - $740,000
$910,001 - $920,000
$1,270,001 - $1,280,000
$2,810,001 - $2,820,000
82
76
55
49
40
34
18
15
13
12
13
7
11
5
7
7
7
3
2
2
1
2
2
2
2
2
2
1
1
2
1
1
2
1
1
1
1
1
1
1
1
Total number of employees that were paid remuneration of $100,000+
487
The remuneration above includes all remuneration paid to permanent employees, including fixed
remuneration, employer KiwiSaver contributions, medical aid contributions, bonuses, commission,
settlements and redundancies.
ANNUAL REPORT 2023 57
PRINCIPLE 6 - RISK MANAGEMENT
Directors should have a sound understanding of
the material risks faced by the issuer and how to
manage them. The Board should regularly verify
that the issuer has appropriate processes that
identify and manage potential and material risks.
Risk Management Framework
The Audit & Risk Committee is responsible for the
oversight and independent review of the Group’s
risk management framework, including:
•
•
•
•
Review and approval of the risk management
policy;
Receiving and considering reports on risk
management;
Assessing the effectiveness of the Group’s
responses to risk; and
Providing the Board with regular reports
on risk management.
The Group has a formal Risk Management Policy
(available on its website) and is committed to the
consistent, proactive and effective monitoring and
management of risk throughout the organisation,
in accordance with best practice and the NZME Risk
Management Framework and Guidelines.
The Board is ultimately responsible for the
effectiveness, oversight and implementation of the
Group’s approach to risk management.
The CEO is responsible for:
•
The management of strategic, operational and
financial risk of the Group;
• Continually monitoring the Group’s progress
against financial and operational performance
targets;
•
•
•
The day-to-day identification, assessment and
management of risks applicable to the Group;
Implementation of risk management controls,
processes and policies and procedures
appropriate for the Group; and
Driving a culture of risk management
throughout the Group.
The Company’s Risk Committee (a management
committee) acts as a governance forum to assist
the CEO and the Executive Team in fulfilling their
corporate governance responsibilities.
This committee provides assurance that the
following aspects are managed appropriately:
•
Strategic and operational risk management;
• Workplace Health and Safety matters;
•
•
Legal, regulatory and policy compliance;
Technology and security matters;
• Climate related risk; and
•
Business continuity planning.
The Group is a diversified media company and
is subject to diverse types of risk including, but
not limited to cyber security, legal and regulatory
compliance, financial and market, climate risk,
government policy and political, reputation and
brand, operational risks and trading conditions.
The Group recognises that in order to achieve its
strategic objectives it must be willing to take and
accept informed risks. Risks relating to innovation,
attracting and retaining talent, and content to drive
audiences and address the needs of advertisers are
encouraged within defined parameters. However, in
doing so, it is not acceptable to trade off financial or
strategic returns by compromising compliance with
the law, the safety of our people, or our reputation
as a responsible corporate citizen and provider of
news, sport and entertainment.
When setting the appetite for taking and accepting
risk, the Group also considers the risk posed by
inaction in what is a fast-paced and disrupted market.
The Group’s approach to risk management
is assessed at least annually by the Audit
& Risk Committee of the Board in order to
make a recommendation to the full Board on
the appropriateness of the Company’s Risk
Management Framework and Guidelines.
For additional information on financial risks, please
also refer to Note 4.7 of the Consolidated Financial
Statements.
58 NEW ZEALAND MEDIA AND ENTERTAINMENT
CORPORATE
GOVERNANCE
CONTINUED
effectiveness, with the use of NZME’s engagement
tool 'HearMe'. This provides Leadership teams
with valuable feedback and insights into areas of
concern and where improvements can be made.
Health and safety training forms part of staff
inductions and is further expanded through a range
of training workshops to drive awareness of NZME’s
health and safety obligations, critical risks, and the
resources available to satisfy these.
NZME maintains a Wellness and Safety page on its
intranet with sections for safety across NZME.
To ensure effective worker involvement, NZME
has multiple Health and Safety Committees in
place across New Zealand and health and safety
performance is communicated throughout all levels
of NZME through leadership team meetings and
internal business communications. NZME also has
a range of internally trained Wellbeing Advocates
and Women’s Health Advocates who provide
confidential support and guidance to employees.
Lost Time Injuries was a total of three across the
year, compared to three in 2022. Total reported
incidents were 29 in 2023, and were also 29 in 2022.
Health and Safety
The NZME Board Charter states that the role of the
Board includes ensuring that the Group health and
safety, environmental practices and culture comply
with legal requirements, reflect best practice and
are recognised by employees and contractors as
key priorities for the Group.
NZME does not have a separate Board-level Health
and Safety Committee as Health and Safety is dealt
with regularly by the full Board.
The Health and Safety Policy(updated in June 2022
and available on the Company’s website) sets out
the Company’s health and safety principles and
explains that the Board regularly monitors key
health and safety performance indicators, the
effectiveness of the Company’s health and safety
system and controls that are in place to manage the
risks that arise from NZME’s operations.
Health and Safety is included on the Company’s Risk
Register. The Company’s annual Health and Safety
Plan captures the projects and objectives for the year
to prioritise responses to the identified risks.
The Company records and monitors critical health
and safety risks in a separate Health and Safety
Risk Register. Currently that register is reviewed
and monitored by the Risk Committee, who meet
monthly and receive and review reporting on health
and safety performance, trends and updates, with
key matters and progress against the annual plan
being reported to the Board.
In 2023, areas of focus included continuing to manage
ongoing risks, monitoring employee health, safety
and wellbeing engagement, and undertaking our
‘Connected Culture’ workshops across the business
which emphasised the culture we want to sustain
at NZME, the responsibilities and expectations of
our leaders, how to raise issues regarding bullying,
harassment and other harmful behaviours and NZME’s
commitment to addressing these.
Health and Safety advice and direction are overseen
by the Culture and Performance team and a full-time
Health, Safety and Compliance Manager.
Engagement in health and safety is monitored
through questions that target employees’ views and
opinions on health and safety initiatives and their
ANNUAL REPORT 2023 59
PRINCIPLE 7 - AUDITORS
The Board should ensure the quality and
independence of the external audit process.
Refer to note 2.2.4 of the Consolidated Financial
Statements for fees paid to the auditors,
PricewaterhouseCoopers, for the year ended
31 December 2023.
The Audit & Risk Committee Charter requires the
Committee to assess the following:
•
•
•
•
•
The independence of the auditors;
The ability of the auditors to provide additional
services which may be occasionally required;
The competency and reputation of the auditors;
The projected audit fees; and
Review the appointment, performance and
remuneration of external auditors.
The Audit & Risk Committee also monitors and
approves any services provided by the auditors other
than in their statutory role and receives confirmation
from the auditors as to their independence from
the Company. This is undertaken on a service by
service basis and assesses whether the service
is permissible under Professional and Ethical
Standard 1 (“PES 1”) issued by the New Zealand
Auditing and Assurance Standards Board, ensuring
that any potential threat to independence is
identified and appropriate safeguards to eliminate
the threat or reduce the threat to an acceptable
level are established. The Audit & Risk Committee
receives an annual confirmation from the auditor
as to their independence from the Group. The
auditor is also required to provide the Audit & Risk
Committee with a detailed analysis of fees relating
to non-audit services provided during the year,
including a description of potential threats to their
independence and the applicable safeguards
implemented by the auditor and the Company to
either mitigate those threats or reduce them to an
acceptable level as required by PES 1. The Audit &
Risk Committee takes the nature of the services
provided, the quantum of the fee, the reason for
the additional services and whether the services
are likely to be one-off or repetitive in nature into
consideration when evaluating and concluding on
auditor independence.
For the year ended 31 December 2023, given the
nature of the services provided and based on the
Committee’s continuous monitoring of auditor
independence, the Audit & Risk Committee do
not believe that the non-audit services provided
by the auditors compromised their objectivity and
independence.
The Company requires the external auditor to attend
the Annual Shareholders’ Meeting (“ASM”) to answer
questions from shareholders in relation to the audit.
The Group’s auditor, PricewaterhouseCoopers,
attended the last ASM on 26 April 2023.
Internal Audit
The Audit & Risk Committee is responsible for
reviewing the integrity and effectiveness of the
internal audit function. NZME operates a co-sourced
internal audit programme that utilises a mix of
self-certifications, scheduled control testing by
Group Financial Services, ad hoc assignments,
investigations by risk and compliance personnel
and a structured internal audit programme executed
by an external firm.
Any reporting from external parties is presented
to the Audit & Risk Committee and any significant
findings from other internal activities are reported
to the Audit & Risk Committee.
PRINCIPLE 8 - SHAREHOLDER RIGHTS
& RELATIONS
The Board should respect the rights of shareholders
and foster constructive relationships with shareholders
that encourage them to engage with the issuer.
In addition to holding its Annual Shareholders’ Meeting,
NZME seeks to regularly engage with shareholders to
ensure they are informed about our activities and our
progress against our stated priorities.
The NZME website has a dedicated Investor Relations
section containing NZX / ASX announcements,
presentations and webcasts, financial reports,
frequently asked questions and other information
that might be useful to our shareholders.
The share registry is maintained by Link Market
Services and their contact details are available
under the Investor Relations section of the
Company’s website. Shareholders can elect to
receive communications electronically.
60 NEW ZEALAND MEDIA AND ENTERTAINMENT
STATUTORY
DISCLOSURES
Following each results announcement, NZME holds
an investor call to present the results and to allow
investors to ask questions. This is usually followed
by an investor roadshow during which the CEO and
other members of the Executive aim to meet with as
many shareholders as possible. In 2023, NZME held
a virtual Investor Day in November.
where possible, to distribute a notice of shareholder
meeting as soon as possible and in any event at
least 20 working days prior to any shareholder
meeting. During the financial year ended 31
December 2023, shareholders were given 20
working days’ notice of the annual shareholder
meeting of the Company held on 26 April 2023.
Shareholders are entitled to exercise their voting
rights as provided for under the applicable
legislation and listing rules.
In order for shareholders to fully participate in
shareholder meetings, the Board will endeavour
Interest Register Entries
In accordance with section 211(1)(e) of the
Companies Act 1993, particulars of general
disclosures of interest in the Interest Register of
NZME for current directors are set out in the table
below. Disclosures during 2023 are noted in italics.
Director
Position
Barbara Chapman
Chairman
Deputy Chair
Carol Campbell
David Gibson
Guy Horrocks
Director
Director
Chair
Director
Director
Director
Director
Director
Deputy Chair
Shareholder
Director
Shareholder
Shareholder
Shareholder
Company
Genesis Energy Limited
The New Zealand Initiative
Fletcher Building Limited
Bank of New Zealand
NZ Post Limited
Asset Plus Limited
T&G Global Limited
Chubb Insurance New Zealand Limited
Rangatira Limited
Contact Energy Limited
Goodman Property Trust (NS)
Solve Data, Inc.
New Zealand Mint Limited
Tracksuit Limited
Setpoint Technologies Inc
Ezirent
Sussan Turner
Director and shareholder
Aspire2 Group Limited
Pro-Chancellor
Auckland University of Technology (AUT)
ANNUAL REPORT 2023 61
Disclosures of Directors’ interests in share
transactions
During 2023, no disclosures were made in the
Interests Register by Directors as to the acquisition
or disposal of relevant interests in Company shares
under section 148 of the Companies Act 1993.
Directors’ interests in shares
Ordinary shares held by directors and parties
associated with them are as follows:
Director
Barbara Chapman
Carol Campbell
David Gibson
Number of shares as at 31 December 2023
73,000
150,000
50,000
Use of Company information
No notices have been received by the Board under
section 145 of the Companies Act 1993 with regard
to the use of Company information received by
the Directors in their capacities as Directors of the
Company or its subsidiary companies.
Indemnities or insurance effected for directors
In accordance with Section 162 of the Companies Act
1993 and the Company’s Constitution, the Company
has indemnified and arranged insurance for all directors
and executive officers to the extent permitted by law for
liabilities arising out of the performance of their normal
duties as directors and officers. The total amount of
insurance for directors and officers contract premiums
for the period was $867,487.
SUBSIDIARY COMPANY INFORMATION
NZME’s subsidiary companies are listed at Note 6.1
of the Consolidated Financial Statements.
Directors of Subsidiary Companies
As at 31 December 2023, Michael Boggs (CEO)
and David Mackrell (CFO) were directors of the
wholly owned subsidiaries listed in Note 6.1 of the
Consolidated Financial Statements, other than
NZME Australia Pty Limited. Michael Boggs and
Mark O’Sullivan (a professional director resident
in Australia) were directors of NZME Australia
Pty Limited as at 31 December 2023. Michael
Boggs, David Mackrell, Greg Hornblow and Peng
Yin (director representing OneRoof’s minority
shareholder) were directors of the subsidiary
OneRoof Limited, in which an 80% interest was
held up until 18 August 2023 when it became a
wholly owned subsidiary, as detailed in Note 6.1
of the Consolidated Financial Statements. Peng
Yin ceased to be a director of OneRoof Limited on
18 August 2023. No other person ceased to be a
director of any of the companies listed in Note 6.1 of
the Consolidated Financial Statements during the
financial year ended 31 December 2023.
Other than Mark O’Sullivan who received A$10,000
for his services as a director of NZME Australia Pty
Limited, these directors did not receive any fees or
other benefit for their services as directors to any of
these companies. Michael Boggs, David Mackrell and
Greg Hornblow receive remuneration as employees
of the Company which are not related to their duties
as directors of these companies. Peng Yin who
ceased to be a director of OneRoof Limited on
18 August 2023 received remuneration through
his company, Hougarden.com Limited, which
provides services to OneRoof Limited.
Entries in interest registers of Subsidiary
Companies
For each subsidiary company in which they act as
a director Michael Boggs and David Mackrell have
made general disclosures of interests in all other
subsidiary companies as a result of their executive
positions at the Company and their positions as
62 NEW ZEALAND MEDIA AND ENTERTAINMENT
STATUTORY
DISCLOSURES
CONTINUED
directors of the other subsidiary companies. Peng
Yin has made a general disclosure of interest in the
OneRoof Limited Interest Register arising from his
position as director and shareholder of Hougarden.
com Limited and Hougarden Motors Limited.
SHAREHOLDER INFORMATION
Substantial product holders
According to notices given to the Company under
the Financial markets Conduct Act 2013 the
following persons were substantial product holders
of the Company as at 31 December 2023. There
were 183,913,614 ordinary shares in the Company
at that date. The Company did not have any other
quoted voting products at that date.
Shareholder
Number of shares in
which relevant interest
is held
Date of notice
Repertoire Partners LP 1
36,689,784
18 April 2023
Spheria Asset Management Pty Ltd
24,609,085
20 September 2023
Osmium Partners LLC
Pinnacle Investment Management
Group Limited
17,076,410
25 August 2023
9,523,767
11 August 2023
1 Repertoire Partners LP’s substantial product holder notice dated 18 April 2023 discloses a holding of
22,829,094 ordinary shares (12.413% of the Company’s shares held at the date the of notice) or 36,689,784
ordinary shares (19.949% of the Company’s shares held at the date of the notice) which includes certain cash
settled swaps (derivative relevant interest in respect of 13,860,690 ordinary shares). The latter is included in
the table above. 2 UBS AG London Branch UBS Securities Australia Ltd and UBS Securities LLC.
ANNUAL REPORT 2023 63
Top 20 shareholders
As at 19 February 2024
Rank
Investor Name
Total Units % Issued Capital
1
2
3
4
5
6
7
8
9
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
Bnp Paribas Nominees Pty Ltd
J P Morgan Nominees Australia Pty Limited
Accident Compensation Corporation
HSBC Custody Nominees (Australia) Limited
Bnp Paribas Nominees (Nz) Limited
FNZ Custodians Limited
Bnp Paribas Nominees Pty Ltd Acf Clearstream
10
Forsyth Barr Custodians Limited
11
12
13
14
15
16
17
18
19
Bnpp Noms Pty Ltd Hub24 Custodial Serv Ltd
Michael Raymond Boggs
Bnp Paribas Noms Pty Ltd
New Zealand Permanent Trustees Limited
JBWERE (Nz) Nominees Limited
Odyls Pty Ltd
New Zealand Depository Nominee
Leh Soon Yong
Merrill Lynch (Australia) Nominees Pty Limited
20
Citibank Nominees (Nz) Ltd
36,744,154
26,560,820
11,832,258
9,449,796
8,537,352
8,140,775
8,053,071
7,823,117
6,043,468
4,020,558
2,583,602
2,517,965
2,396,957
2,270,189
2,073,918
1,856,539
1,825,397
1, 41 6 ,11 6
1,138,782
1,134,498
19.68
14.23
6.34
5.06
4.57
4.36
4.31
4.19
3.24
2.15
1.38
1.35
1.28
1.22
1.11
0.99
0.98
0.76
0.61
0.61
Total
146,419,332
78.42
64 NEW ZEALAND MEDIA AND ENTERTAINMENT
STATUTORY
DISCLOSURES
CONTINUED
Spread of Quoted Financial Product holders
As at 19 February 2024
Range of Securities Held
Holders
Holders %
Issued Capital
Issued Capital %
1-1,000
1,001-5,000
5,001-10,000
10,001-50,000
50,001-100,000
Greater than 100,000
3,295
65.93
812,096
912
260
371
71
89
18.25
2,278,764
5.2
7.42
1.42
1.78
2,044,373
8,664,381
5,118,022
167,762,825
Total
4,998
100
186,680,461
0.43
1.22
1.10
4.64
2.74
89.87
100
OTHER INFORMATION
Waivers from NZX
During the financial year ended 31 December 2023,
the Company was not granted any waivers from any
of the NZX Listing Rules, nor did the Company rely
on any previously granted or published waiver from
the NZX Listing Rules.
Donations
In accordance with section 211(1)(h) of the Companies
Act 1993, NZME notes that the Group made donations
of $6,237 during the year ended 31 December
2023. In addition, and as discussed elsewhere in
this Annual Report (our Sustainability Commitment),
NZME regularly donates advertising space and other
services to a number of worthwhile charities.
Credit rating
As at the date of this Annual Report NZME does not
have a credit rating.
Director appointments under the
Company's Constitution
Rule 2.4.1 of the NZX Listing Rules allows a company
to include in its Constitution a right for a product
holder to appoint a director to the Board under
certain circumstances. As at 31 December 2023,
none of the Directors were appointed pursuant to
Rule 2.4.1.
ANNUAL REPORT 2023 65
66 NEW ZEALAND MEDIA AND ENTERTAINMENT
NZME LIMITED
CONSOLIDATED
FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ANNUAL REPORT 2023 67
68 NEW ZEALAND MEDIA AND ENTERTAINMENT
CONTENTS
Directors' Statement
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements*
1.0 Basis of Preparation
2.0 Group Performance
3.0 Operating Assets and Liabilities
4.0 Capital Management
5.0 Taxation
6.0 Group Structure and Investments in Other Entities
7.0 Related Parties
8.0 Commitments and Contingent Liabilities
9.0 Subsequent Events
Independent Auditor's Report
69
70
71
72
73
74
75
77
84
97
112
115
119
120
120
121
* The notes to the financial statements have been grouped into nine sections; aimed at grouping items of
a similar nature together. The Basis of Preparation section presents a summary of material information
and general accounting policies that are necessary to understand the basis on which these consolidated
financial statements have been prepared. Accounting policies specific to a particular note are included in
that note and are boxed for ease of reference. Significant accounting estimates and judgments relevant to
a particular note are also included in the relevant note, and are clearly marked as such. A summary of the
significant accounting estimates and judgments is also included under the Basis of Preparation section on
pages 75 to 76.
ANNUAL REPORT 2023 69
DIRECTORS’ STATEMENT
The Directors are pleased to present the consolidated financial statements of NZME Limited (the
"Company") and its subsidiaries (together the "Group") for the year ended 31 December 2023,
incorporating the consolidated financial statements and the independent auditor's report.
The Directors are responsible, on behalf of the Company, for presenting these consolidated
financial statements in accordance with applicable New Zealand legislation and generally
acceptable accounting practices in New Zealand in order to present consolidated financial
statements that present fairly, in all material respects, the financial position of the Group as
at 31 December 2023 and the results of the Group's operations and cash flows for the year
then ended.
The consolidated financial statements for the Group as presented on pages 70 to 120 are
signed on behalf of the Board of Directors, and are authorised for issue on the date below.
For and on behalf of the Board of Directors
Barbara Chapman
Chairman
Carol Campbell
Director
Date: 20 February 2024
70 NEW ZEALAND MEDIA AND ENTERTAINMENT
CONSOLIDATED INCOME
STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Revenue
Finance and other income
Total revenue and other income
People costs
Print and distribution
Agency commission and marketing
Content
Property
IT and communications
Other expenses
Expenses from operations before finance costs,
depreciation, amortisation
Depreciation and amortisation
Finance costs
Share of joint ventures' and associates' net loss after tax
Profit before income tax expense
Income tax expense
Net profit after tax
Profit for the year is attributable to:
Owners of the Company
Non-controlling interest
2023
$’000
2022
$’000
340,752
355,433
6,889
10,453
347,641
365,886
(146,648)
(149,647)
(50,755)
(51,463)
(36,055)
(41,226)
(19,667)
(18,875)
(7,461)
(11,008)
(7,336)
(12,177)
(21,402)
(20,711)
(292,996)
(301,435)
(28,623)
(27,391)
(7,656)
(5,665)
Note
2.1
2.1
2.1
2.2.2
2.2.3
6.2.2
(588)
17,778
5.1
(5,578)
12,200
(156)
31,239
(8,559)
22,680
12,789
23,383
(589)
(703)
12,200
22,680
Cents
Cents
Earnings per share attributable to the ordinary shareholders
of the Company
Basic earnings per share
Diluted earnings per share
2.3
2.3
6.95
6.69
12.09
11.69
The above Consolidated Income Statement should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
ANNUAL REPORT 2023 71
Net profit after tax
Other comprehensive income
Items that may be reclassified to profit or loss
Effective (loss) / gain on hedging instruments
Reclassification to profit or loss
Net loss on hedging instruments
Net exchange differences on translation of foreign operations
Items that will not be reclassified to profit or loss
Share of revaluation of joint ventures' and associates' assets
Other comprehensive (loss) / income, net of tax
Total comprehensive income
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interest
Note
2023
$’000
2022
$’000
12,200
22,680
4.2
4.2
4.2
4.2
(1)
(204)
(205)
(2)
-
(207)
11,933
166
(199)
(33)
5
51
23
22,703
12,582
23,406
(589)
(703)
11,993
22,703
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the
accompanying notes.
72 NEW ZEALAND MEDIA AND ENTERTAINMENT
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Total current assets
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets
Other financial assets
Equity accounted investments
Other receivables and prepayments
Deferred tax asset
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Current lease liabilities
Current tax provision
Total current liabilities
Non-current liabilities
Non-current lease liabilities
Interest bearing liabilities
Other payables
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Share capital
Reserves
Retained earnings
Total Company interest
Non-controlling interest
Total equity
Note
2023
$’000
2022
$’000
4.5
3.4
3.5
3.1
3.2
3.3
6.2.2
3.4
5.2
3.6
4.5.2
4.5.2
4.5.1
6.1.1
5,524
45,057
5,084
-
5,670
48,751
5,644
279
55,665
60,344
142,445
143,779
20,311
58,233
815
2,768
4,453
5,709
24,598
63,657
815
3,443
5,642
3,959
234,734
245,893
290,399
306,237
48,840
12,572
269
61,681
72,105
23,490
676
52,477
11,596
1,674
65,747
79,578
23,134
-
96,271
102,712
157,952
168,459
132,447
137,778
4.1
4.2
345,365
344,473
5,416
5,282
(218,334)
(211,188)
132,447
138,567
-
(789)
132,447
137,778
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
ANNUAL REPORT 2023 73
Attributable to owners of the Company
Note
Share
capital
$’000
Reserves
$’000
Retained
earnings
$’000
Total
$’000
Non-
controlling
interest
$’000
Total
equity
$’000
Balance at 1 January 2022
361,758
4,920 (209,478)
157,200
(86)
157,114
Net profit / (loss) after tax
Other comprehensive income
Total comprehensive
income / (loss)
Dividends paid
Supplementary dividends paid
Tax credit on supplementary
dividends paid
4.4.2
4.4.2
-
-
-
-
-
-
Repurchase of shares
4.1
(17,599)
-
23
23
-
-
-
-
Transfer from revaluation reserve
Share based payments expense
4.2
4.2
-
-
(259)
1,683
2019 total incentive plan ("TIP")
settlement
314
(1,085)
23,383
23,383
(703)
22,680
-
23
-
23
23,383
23,406
(703)
22,703
(25,352)
(25,352)
(3,171)
(3,171)
3,171
3,171
-
(17,599)
259
-
-
-
1,683
(771)
-
-
-
-
-
-
-
(25,352)
(3,171)
3,171
(17,599)
-
1,683
(771)
Balance at 31 December 2022
344,473
5,282
(211,188)
138,567
(789)
137,778
Balance at 1 January 2023
344,473
5,282
(211,188)
138,567
(789)
137,778
Net profit / (loss) after tax
Other comprehensive loss
Total comprehensive
(loss) / income
Dividends paid
Supplementary dividends paid
Tax credit on supplementary
dividends paid
Equity transaction with
non-controlling interest
Deferred tax on share schemes
Share based payments expense
4.4.2
4.4.2
6.1.1
4.1
4.2
-
-
-
-
-
-
-
892
-
12,789
12,789
(589)
12,200
(207)
-
(207)
-
(207)
(207)
12,789
12,582
(589)
11,993
(16,552)
(16,552)
(2,103)
(2,103)
2,103
2,103
-
-
-
(16,552)
(2,103)
2,103
(3,383)
(3,383)
1,378
(2,005)
-
-
-
-
-
-
341
-
-
892
341
-
-
-
892
341
132,447
Balance at 31 December 2023
345,365
5,416
(218,334)
132,447
The above Consolidated Statement of Changes in Equity should be read in conjunction with the
accompanying notes.
74 NEW ZEALAND MEDIA AND ENTERTAINMENT
CONSOLIDATED STATEMENT
OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Government grants
Dividends received
Interest received
Interest paid
Income taxes paid
Note
2023
$’000
2022
$’000
345,757
352,191
(293,429)
(301,078)
3,651
4,080
88
445
75
401
(7,167)
(6,132)
(7,839)
(12,048)
Net cash inflows from operating activities
4.6
41,506
37,489
Cash flows from investing activities
Payments for intangible assets
Payments for property, plant and equipment
Acquisition of BusinessDesk
Acquisition of Radio Wanaka assets
Proceeds from sale of property, plant and equipment
(7,723)
(3,314)
-
-
30
(5,723)
(4,963)
(2,717)
(892)
14
Net cash outflows from investing activities
(11,007)
(14,281)
Cash flows from financing activities
Proceeds from borrowings
Repayments of borrowings
Repurchase of shares
Payments for borrowing cost
Dividends paid to Company's shareholders
Payments to non-controlling interest
Payments for lease liability principal
Net cash outflows from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the year
4.5.1
4.5.1
4.1
4.5.1
4.4.2
6.1.1
4.5.2
Cash and cash equivalents at end of the year
4.5.1
82,500
71,250
(82,500)
(47,250)
-
-
(17,599)
(166)
(16,552)
(25,352)
(952)
-
(13,141)
(11,959)
(30,645)
(31,076)
(146)
5,670
5,524
(7,868)
13,538
5,670
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying
notes.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
ANNUAL REPORT 2023 75
1.0 BASIS OF PREPARATION
1.1
REPORTING ENTITY AND
STATUTORY BASE
NZME Limited (NZX:NZM and ASX:NZM) is a for-profit
company limited by ordinary shares which are publicly
traded on the NZX Main Board and the Australian
Securities Exchange as a Foreign Exempt Listing. NZME
Limited is incorporated and domiciled in New Zealand.
It is registered under the Companies Act 1993 and is
a FMC reporting entity under Part 7 of the Financial
Markets Conduct Act 2013. The entity’s registered office
is 2 Graham Street, Auckland, 1010, New Zealand.
NZME Limited (the "Company" or "Parent") and its
subsidiaries' (together the "Group") principal activity
during the financial year was the operation of an
integrated media and entertainment business.
1.2 GENERAL ACCOUNTING POLICIES
These consolidated financial statements have been
prepared in accordance with New Zealand Generally
Accepted Accounting Practice ("NZ GAAP"). They
comply with New Zealand equivalents to International
Financial Reporting Standards ("NZ IFRS") and
other applicable Financial Reporting Standards, as
appropriate for for-profit entities. The consolidated
financial statements also comply with International
Financial Reporting Standards Accounting Standards
("IFRS Accounting Standards"). The consolidated
financial statements have also been prepared in
accordance with Part 7 of the Financial Markets
Conduct Act 2013 and the NZX Listing Rules.
The Group has used non-GAAP measures which are
not prepared in accordance with NZ IFRS in relation
to the following:
•
•
•
total operating adjusted EBITDA (note 2.1);
net tangible liabilities (note 3.7); and
exceptional items (note 2.2.1).
These measures should not be viewed in isolation,
nor considered as a substitute for measures reported
in accordance with NZ IFRS. Non-GAAP financial
measures may not be comparable to similarly titled
amounts reported by other companies.
The material accounting policies adopted in the
preparation of the consolidated financial statements
are either set out below, or in the relevant note.
These policies have been consistently applied to all
the years presented, unless otherwise stated. These
consolidated financial statements are presented for
the Group and were approved for issue by the Board
of Directors on 20 February 2024.
1.2.1 Basis of measurement
These consolidated financial statements have been
prepared under the historical cost convention with
the exception of certain items for which specific
accounting policies are identified.
1.2.2 Certain Prior period comparatives
Certain prior period information has been reclassified
to ensure consistency with current year disclosures
and to provide more meaningful comparison. The
prior period information that has been reclassified is:
•
The expenses from operations before finance
costs, depreciation, amortisation has been
represented in the income statement based
on its nature.
• Capital work in progress has been represented
in the balance sheet, cash flow statement, the
intangible assets note (note 3.1), the property,
plant and equipment note (note 3.2) and the net
tangible liabilities (note 3.7).
•
The segment reporting has been consolidated
with all information now presented in note 2.1.
1.2.3 Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each
of the Group's entities are measured using the
currency of the primary economic environment
in which the entity operates (functional currency).
The consolidated financial statements are presented
in New Zealand dollars, which is the Company's
functional and the Group's presentation currency,
and rounded to the nearest thousand, except where
otherwise stated.
76 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
A number of new accounting standards are effective
for annual periods beginning after 1 January 2023
and earlier application is permitted. However, the
Group has not early adopted the following new or
amended accounting standards in preparing these
consolidated financial statements.
Classification of Liabilities as Current or
Non-current and Non-current Liabilities with
Covenants (Amendments to NZ IAS 1)
The Group is in the process of assessing the potential
impact of the amendments on the classification of
these liabilities and the related disclosures which
is not expected to have a significant impact on the
Group's consolidated financial statements.
Disclosure of Fees for Audit Firms Services
(Amendments to FRS- 44)
This amendment will likely give rise to additional
disclosure.
1.5 WORKING CAPITAL
As at 31 December 2023 the Group had negative
working capital of $6.0 million compared to
$5.4 million as at 31 December 2022. The Group's
level of negative working capital is primarily due to
deferred revenue of $17.6 million (31 December 2022:
$16.3 million). The Directors are satisfied that there
will be adequate cash flows generated from operating
and financing activities to meet the obligations of the
Group for at least the next 12 months.
1.3
SIGNIFICANT ACCOUNTING
ESTIMATES AND JUDGEMENTS
The preparation of the consolidated financial
statements requires the use of certain significant
judgements, accounting estimates and assumptions,
including judgements, estimates and assumptions
concerning the future. The estimates and
assumptions are based on historical experiences
and other factors that are considered to be relevant.
The resulting accounting estimates will by definition,
seldom equal the related actual results and are
reviewed on an ongoing basis. A list of those areas of
significant estimation or judgement and a reference
to the notes containing further information is
provided below:
Areas of significant accounting
estimates or judgements
Intangible assets with indefinite useful
lives
Assumptions used in testing for
impairment of indefinite life intangible
assets
Lease terms and discount rates used
in determining right-of-use assets and
associated lease liabilities (see note
4.5.2 for lease liabilities)
Note
3.1
3.1.1
3.3
1.4 NEW AND AMENDED STANDARDS
AND INTERPRETATIONS
The Group has applied the following standards and
amendments for the first time for its annual reporting
period commencing 1 January 2023:
•
•
•
Definition of Accounting Estimates – amendments
to IAS 8.
Deferred Tax related to Assets and Liabilities
arising from a Single Transaction – amendments
to IAS 12.
Disclosure of Accounting Policies – Amendments
to IAS 1 and IFRS Practice Statement 2.
The amendments listed above did not have any
impact on the amounts recognised in prior years
and are not expected to significantly affect the
current or future years.
ANNUAL REPORT 2023 77
2.0 GROUP PERFORMANCE
2.1
SEGMENT REPORTING
Audio
$’000
Publishing
$’000
OneRoof
$’000
Other
$’000
Total
$’000
For the year ended 31 December 2023
Advertising
112,197
110,472
20,370
Circulation and subscription
External printing and distribution
Other
Segment revenue from integrated
media and entertainment activities
Revenue from shared services centre
Events
-
-
991
80,564
6,819
6,252
-
-
413
113,188
204,107
20,783
103
-
188
-
22
-
-
-
-
-
-
2
243,039
80,564
6,819
7,656
338,078
315
2,359
2,359
Total revenue from external customers
113,291
204,295
20,805
2,361
340,752
Other income A
Finance income
Total finance and other income
317
-
317
5,341
-
5,341
-
-
-
786
445
6,444
445
1,231
6,889
Total revenue and other income
113,608
209,636
20,805
3,592
347,641
Audio
$’000
Publishing
$’000
OneRoof
$’000
Other
$’000
Total
$’000
Timing of revenue recognition
Recognised at a point in time
103,981
128,114
Recognised over time
9,310
76,181
9,617
11,188
-
241,712
2,361
99,040
Total revenue from external customers
113,291
204,295
20,805
2,361
340,752
Audio
$’000
Publishing
$’000
OneRoof
$’000
Other
$’000
Total
$’000
Operating adjusted EBITDA B
23,256
38,635
(1,287)
(4,440)
56,164
Total assets
114,805
158,667
8,718
8,209
290,399
Additions of property, plant and
equipment and intangible assets
3,114
6,618
1,287
18
11,037
Total liabilities
57,997
90,515
6,946
2,494
157,952
78 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
Audio
$’000
Publishing
$’000
OneRoof
$’000
Other
$’000
Total
$’000
For the year ended 31 December 2022
Advertising
112,424
123,274
22,821
Circulation and subscription
External printing and distribution
Other
Segment revenue from integrated
media and entertainment activities
Revenue from shared services centre
Events
-
-
897
83,655
4,462
5,104
-
-
-
113,321
216,495
22,821
165
-
311
-
42
-
-
-
-
-
-
4
258,519
83,655
4,462
6,001
352,637
522
2,274
2,274
Total revenue from external customers
113,486
216,806
22,863
2,278
355,433
Other income A
Finance income
430
8,598
-
-
Total finance and other income
430
8,598
-
-
-
1,024
10,052
401
401
1,425
10,453
Total revenue and other income
113,916
225,404
22,863
3,703
365,886
Audio
$’000
Publishing
$’000
OneRoof
$’000
Other
$’000
Total
$’000
Timing of revenue recognition
Recognised at a point in time
105,683
138,403
12,284
-
256,370
Recognised over time
7,803
78,403
10,579
2,278
99,063
Total revenue from external customers
113,486
216,806
22,863
2,278
355,433
Audio
$’000
Publishing
$’000
OneRoof
$’000
Other
$’000
Total
$’000
Operating adjusted EBITDA B
22,756
47,418
(1,411)
(4,060)
64,703
Total assets
120,918
167,715
10,543
7,061
306,237
Additions of property, plant and
equipment and intangible assets
4,231
9,440
1,296
28
14,995
Total liabilities
60,948
96,483
7,039
3,989
168,459
ANNUAL REPORT 2023 79
A Other income includes Government grants of $3,651,371 (2022: $4,079,668) received from the Ministry
of Culture and New Zealand On Air for the production of content, journalism training and creating greater
cultural awareness. There are no unfulfilled conditions or contingencies attaching to these grants.
The Group did not benefit directly from any other forms of Government assistance. Other income also
includes rental income of $141,353 (2022: $178,506) relating to the to operating sub-leases of right-of-use
assets. See note 3.4.3 for the income received from the finance sub-leases on right-of-use assets.
B Operating adjusted Earnings before Interest, Tax, Depreciation and Amortisation (Adjusted EBITDA)
from continuing operations which excludes exceptional items, is a non-GAAP measure that represents
the Group’s total segment result which is regularly monitored by the Chief Operating Decision
Maker. Exceptional items are those gains, losses, income and expense items that are not directly
related to the primary business activities of the Group which are determined in accordance with the
NZME Exceptional Items Recognition Framework adopted by the Board. Exceptional items include
redundancies, impairment, one-off projects and the disposal of properties or businesses. These items
are excluded from the segment result that is regularly reviewed by the Chief Operating Decision Maker.
Accounting policies
The Group applies the following accounting
policies in relation to revenue:
Advertising
The Group operates an integrated media and
entertainment business and contracts with
customers to provide advertising on multiple
platforms across the divisions consisting of a
series of distinct services that are substantially
the same. Advertising is often bundled to include
publishing, audio and real estate components.
In most cases each component of the bundle is
treated as a distinct performance obligation and
the transaction price is allocated on a relative
stand-alone selling price basis. The Group also
provides advertising for non-cash consideration,
typically in exchange for advertising from another
media company. The Group concludes these
exchanges have commercial substance and
recognises revenue on a gross basis measured
at the fair value of the consideration received.
For advertising in print publications or terrestrial
radio stations the performance obligation is
satisfied at a point in time when the advertisement
is printed or aired. For advertising placed on
digital platforms the performance obligation is
satisfied over the period of the campaign.
Subscriptions
The Group enters into contracts with customers to
deliver a specified publication on specified days. The
performance obligation is satisfied, and revenue is
recognised, when the publication is delivered. For
contracts entered into with customers for the supply
of online premium content the service obligation is
satisfied, and revenue recognised over the period of
the subscription.
Circulation
The Group enters into contracts with customers
to deliver specified publications on specified days
which the customer will on-sell to the public.
The performance obligation is satisfied when the
publication is delivered. Where customers have a
right to return unsold publications this is classed
as variable consideration and the Group includes
in the transaction price an estimate of the unsold
publications. This estimate is calculated using
the most likely amount method based on weekly
reporting from customers to the extent that it is
highly probable that a significant reversal in the
amount of cumulative revenue recognised will not
occur when the uncertainty associated with the
variable consideration is subsequently resolved.
External printing and distribution
The Group enters into contracts with customers to
print and or distribute their publications on their
behalf. The printing and delivery of publications
are two distinct performance obligations and
revenue is recognised at a point in time when the
publications are printed or delivered.
Shared services centre
The Group provides back-office support services
to customers. These services consist of a number
of functions that are largely consistent on a month-
to-month basis. Revenue is therefore recognised in
equal increments over the billing period.
80 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
Deferred revenue
Incremental cost of obtaining a contract
The Group applies the practical expedient in
NZ IFRS 15 to recognise the incremental cost
of obtaining a contract (such as commission)
when incurred if the amortisation period is one
year or less. If material, the Group will recognise
an asset for any incremental cost of obtaining a
contract with a customer if the Group expects to
recover those costs and the amortisation period is
expected to be more than one year. Those costs
will be amortised on a systematic basis that is
consistent with the transfer of the good or service
to which the asset relates.
Costs to fulfil a contract
There are no upfront costs incurred by the Group
in respect of digital advertising placed on third
party platforms.
All revenue contracts are for periods of one
year or less. As permitted under NZ IFRS 15,
the transaction price allocated to these
unsatisfied contracts is not disclosed.
When a customer pays for goods or services
in advance, the Group recognises a deferred
revenue liability which is reduced, and revenue
recognised, as the Group satisfies each distinct
performance obligation. The Group also
recognises a deferred revenue liability when a
customer has been invoiced for future goods or
services but the invoice is unpaid at the balance
sheet date.
Government grants
Cash received and receivable from Government
grants is recognised where there is reasonable
assurance that the grant will be received and the
group will comply with all attached conditions.
Government grants relating to costs are deferred
and recognised in "Other income" over the period
necessary to match them with the costs that they
are intended to compensate.
Significant financing component
The Group does not expect, at contract inception,
that the period between transferring the promised
goods or services from contracts with customers
and when the customer pays for those goods and
services to be more than one year. The Group
applies the practical expedient in NZ IFRS 15 to not
adjust the promised amount of consideration it
expects to receive for those goods or services for
the effects of a significant financing component.
2.1.1 Revenue recognition
Revenue classified as generated overtime is:
Revenue classified as generated at a point in time
comprises:
•
Revenue generated from advertising
placed in print publications and broadcast
on radio stations.
•
•
•
• Circulation and subscription revenue derived
from the sale of print publications.
Subscriptions to digital publications.
Revenue generated from the supply of online
advertising and other online services.
Revenue generated by the supply of services
including organising and running events,
back-office services and the supply of content,
created by the Group, to third parties.
•
External printing and distribution
for third parties.
ANNUAL REPORT 2023 81
2.1.2 Determination of operating segments
The operating segments for the Group are:
The Group operates an integrated media and
entertainment business that incorporates the sale of
advertising, goods and services generated from the
audiences attached to the Group's media platforms
and comprises of three operating segments.
•
•
All significant operating decisions are based upon
analysis of the three operating segments. The
Executive Team and the Board of Directors have been
identified as the Chief Operating Decision Maker.
The Group’s major products and services are split
into the three segments with revenue, income, direct
and allocated costs reported to the Chief Operating
Decision Maker on this basis. Although the Group
operates in many different markets within New
Zealand, for management reporting purposes the
Group operates in one principal geographical area
being New Zealand as a whole.
Audio - terrestrial radio stations, digital
iHeartRadio, podcasts and Radio brand
websites.
Publishing - print publications (excluding
dedicated real estate publications) and digital
news websites including nzherald.co.nz.
and BusinessDesk.
• OneRoof - comprises oneroof.co.nz and
dedicated real estate print publications.
Operating expenses comprise those costs that are
directly attributable to each segment and allocated
costs that are allocated based on different criteria
depending on the expense type.
Revenue and expenses that are not included in one
of the three operting segments are grouped together
in Other. This grouping includes corporate costs.
2.1.3 Reconciliation of operating adjusted EBITDA to net profit before income tax expense
Operating adjusted EBITDA
Finance income
Reversal of impairment
Depreciation and amortisation
Finance costs
Share of joint ventures' and associates' net loss after tax
Exceptional items
Insurance income
Income from lease adjustments
Cost items
Net profit before income tax expense
Note
2.1
2.1
2.2.2
2.2.3
6.2.2
2023
$’000
2022
$’000
56,164
64,703
445
-
401
549
(28,623)
(27,391)
(7,656)
(5,665)
(588)
(156)
644
-
2.2.1
(2,608)
17,778
206
87
(1,495)
31,239
82 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
2.2 EXPENSES
2.2.1 Exceptional cost items as included in the following expenses
People costs
Redundancies and associated costs
BusinessDesk earn-out-provision
Historical pay claims
Property
Property lease adjustments and make good costs
Sub-lease costs
Other expenses
NZME Advisory Limited - Commerce commission
Professional fees for various one-off projects
Total exceptional cost expenses
2.2.2 Depreciation and amortisation
Depreciation on owned assets
Depreciation on right-of-use assets
Amortisation on intangible assets
Total depreciation and amortisation
2.2.3 Finance costs
Interest and finance charges on bank facilities
Interest on interest rate swaps
Interest expense on leases
Loan modification adjustment
Fair value adjustment on interest rate swaps
Borrowing cost amortisation
Total finance costs
2.2.4 Fees paid to auditors
Fees paid to the Group's auditors, PricewaterhouseCoopers, consist of:
Audit and review of financial statements
Other services A
Total fees paid to auditors
Note
2023
$’000
2022
$’000
3.8
2,691
(413)
-
69
20
(11)
252
565
413
(238)
168
262
277
48
2,608
1,495
3.2
3.3
3.1
7,577
11,995
9,051
9,064
11,225
7,102
28,623
27,391
2,796
(199)
4,703
258
-
98
1,374
(212)
4,890
(564)
(59)
236
7,656
5,665
505
1
506
542
18
560
A Agreed upon procedures performed for monthly market revenue benchmarking (January 2022
to January 2023) and the annual Broadcasting Standards Authority return (2022).
In addition, non-audit assurance services on greenhouse gas emissions for the 2022 and 2023 financial years
were performed in 2024 for $60,000.
ANNUAL REPORT 2023 83
2.3
EARNINGS PER SHARE ("EPS")
2023
$’000
2022
$’000
Reconciliation of earnings used in calculating basic / diluted EPS
Profit attributable to owners of the parent entity used in calculating EPS
12,789
23,383
2023
Number
2022
Number
Weighted average number of shares
Weighted average number of shares in the denominator in calculating basic
EPS
183,913,614
193,375,810
Adjusted for calculation of diluted EPS
7,217,143
6,715,262
Weighted average number of shares in the denominator in calculating
diluted EPS
191,130,757
200,091,072
Basic / diluted EPS
Basic EPS
Diluted EPS
2023
Cents
2022
Cents
6.95
6.69
12.09
11.69
Accounting policies
Basic earnings per share
Diluted earnings per share
Basic earnings per share is determined by
dividing:
•
•
the profit or loss attributable to owners
of the Company; by
the weighted average number of ordinary
shares outstanding during the financial year,
adjusted for bonus elements in ordinary
shares issued during the financial year.
Diluted earnings per share adjusts the figures
used in the determination of basic earnings per
share by taking into account:
•
•
the after-tax effect of dividends, interest
and other changes in income or expense
associated with dilutive potential ordinary
shares; and
the weighted average number of additional
ordinary shares that would have been
outstanding assuming the conversion of all
dilutive potential ordinary shares.
84 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
3.0 OPERATING ASSETS AND LIABILITIES
3.1
INTANGIBLE ASSETS
Significant judgement: The Directors have determined that mastheads and brands have indefinite lives
and are therefore not amortised. Refer to the accounting policies below for further information.
Goodwill
$’000
Software
$’000
Mastheads
and brands
$’000
Radio
licences
$’000
Capital
work in
progressA
$’000
Total
$’000
As at 1 January 2022
Cost
Accumulated amortisation and
impairment
Net book value
For the year ended 31 December 2022
Opening net book amount
-
-
-
-
53,909
205,995
79,059
2,665
341,628
(46,273)
(104,186)
(50,309)
-
(200,768)
7,636
101,809
28,750
2,665
140,860
7,636
101,809
28,750
2,665
140,860
Additions
Amortisation
Transfers from capital work in progress
2,693
121
603
889
5,715
-
-
(3,912)
6,088
-
-
(3,190)
-
-
(6,088)
10,021
(7,102)
-
Net book value
2,693
9,933
102,412
26,449
2,292
143,779
As at 31 December 2022
Cost
2,693
53,844
202,225
79,948
2,292
341,002
Accumulated amortisation
and impairment
-
(43,911)
(99,813)
(53,499)
-
(197,223)
Net book value
2,693
9,933
102,412
26,449
2,292
143,779
For the year ended 31 December 2023
Opening net book amount
2,693
9,933
102,412
26,449
Additions
Amortisation
Other transfers and adjustments
Transfers from capital work in progress
-
-
-
-
-
(5,819)
(6)
8,356
-
-
-
-
305
(3,232)
-
-
2,292
7,418
-
-
(8,356)
143,779
7,723
(9,051)
(6)
-
Net book value
2,693
12,464
102,412
23,522
1,354
142,445
As at 31 December 2023
Cost
2,693
62,194
202,225
80,253
1,354
348,719
Accumulated amortisation and
impairment
-
(49,730)
(99,813)
(56,731)
-
(206,274)
Net book value
2,693
12,464
102,412
23,522
1,354
142,445
ANNUAL REPORT 2023 85
A Capital work in progress is transferred to the relevant asset category once the project is completed.
Capital work in progress is not amortised prior to being transferred to the relevant asset category.
Intangible assets not yet available for use, that are included in capital work in progress, are subject
to annual impairment tests. Capital work in progress at 31 December 2023 and 31 December 2022
comprised of expenditure on digital development projects.
Accounting policies
Goodwill
Goodwill arises on the acquisition of businesses
and represents the excess of the consideration
paid above the fair value of the net identifiable
assets, liabilities and contingent liabilities acquired.
(b) as a prepayment and then expensed over
the term of the cloud computing arrangement
for the costs of the software provider or its
subcontractor.
Software
Internal and external costs directly incurred in the
purchase or development of software controlled
by the Group are recognised as intangible assets,
including subsequent improvements, when
it is probable that they will generate a future
economic benefit. Costs capitalised include
materials, services, payroll and payroll related
costs of employees involved in development.
Amortisation of software assets is calculated on a
straight-line basis over the useful life of the asset
(typically 2 to 10 years).
Cloud computing arrangements provide the
Group with the right to access a supplier's cloud
based software for a specified contract period.
Where the Group controls an identifiable asset
in relation to the integration and customisation
of cloud computing arrangements these costs
will be capitalised and amortised over the life of
the arrangement. Control exists where the Group
determines that the asset could be transferred
to an alternative supplier without incurring
substantial additional costs. If the Group does
not control the cloud based software, the related
development costs (external and internal) are
recognised as either:
(a) an expense when they are incurred, for
internal costs, and the costs of an integrator
not related to the software provider, or
Mastheads and brands
Mastheads, being the titles, logo's and similar
items of the integrated media assets of the
Group, and brands are initially recognised at cost.
The Directors believe the mastheads and brands
have indefinite lives as there is no foreseeable
limit over which they are expected to generate
net cash inflows for the Group. Accordingly,
mastheads and brands are not amortised but are
tested for impairment each year (refer to note
3.1.1 below).
Radio licences
Commercial radio licences are accounted for as
identifiable assets and are initially recognised
at cost. The current New Zealand radio licences
expire on 31 March 2031 and are being amortised
on a straight line basis to that date.
Impairment of goodwill, mastheads
and brands
Assets that have an indefinite useful life are
reviewed annually for impairment or whenever
events or changes in circumstances indicate
that the carrying amount of the asset may not be
recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount
exceeds its recoverable amount.
86 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
3.1.1 Year-end impairment review by cash generating unit ("CGU")
This note includes details of certain key estimates
and assumptions made during the impairment
testing process. The Directors should assess, at
each reporting date, whether there is any indication
that an impairment loss for an asset, other than
goodwill, either no longer exists or has decreased.
As disclosed in note 2.1 the Directors have
determined that the Group has three operating
segments – being "Audio", "Publishing" and
"OneRoof". The Directors have also determined
that there are three CGU for impairment testing
because these are the lowest level for which there
are separately identifiable cash inflows which are
largely independent of the cash inflows from other
assets or groups of assets. The table below contains
the allocation of the Group's indefinite life intangible
assets across the CGUs.
Audio
$’000
Publishing
$’000
OneRoof
$’000
Other
$’000
Total
$’000
As at 31 December 2023 and 31 December 2022
Goodwill
Mastheads
Brands
-
-
2,693
72,640
29,169
603
Non-amortising intangible assets
29,169
75,936
-
-
-
-
-
-
-
-
2,693
72,640
29,772
105,105
As an integrated media and entertainment business,
the Directors consider the mastheads and brands
of each CGU to be complimentary which as a group
represent the highest and best use of the assets.
Whilst the OneRoof CGU does not include any non-
amortising intangible assets, impairment testing
has been carried out given it does not currently
generate an operating profit.
The recoverable amount of a CGU is determined
based on the higher of fair value less costs to
sell and value-in-use ("VIU") calculations using
management forecasts. The recoverable amount
of each CGU is compared against the carrying
value of that CGU to determine whether there has
been impairment. Any impairment is recognised
immediately as an expense and in relation to
goodwill, is not subsequently reversed.
An impairment review was conducted at
31 December 2023 using VIU calculations to
determine the recoverable amount of the CGUs.
Based on the key estimates and assumptions
outlined below no impairment of indefinite life
intangible assets has been recognised in the
income statement (2022: $nil) for any of the CGUs.
The cash flow projections used in VIU calculations
are based off the Group's Board-approved medium
term plans over a five-year period, after applying
a more conservative set of assumptions that are
considered the most appropriate for impairment
testing. Cash flows beyond the five-year period are
extrapolated by calculating a terminal value. This
assessment is required to be made based on events
and knowledge as at 31 December 2023.
ANNUAL REPORT 2023 87
Key estimates and assumptions used for calculating the VIU of each CGU
Discount rates and terminal growth rates assessed as appropriate for each CGU are as follows:
2023
Audio
2023
Publishing
2023
OneRoof
2022
Audio
2022
Publishing
2022
OneRoof
Forecast period
2024-2028 2024-2028 2024-2028 2023-2027 2023-2027 2023-2027
Discount rate (post tax)
10.0%
10.0%
10.0%
9.6%
9.6%
9.6%
Terminal value growth /
(decline)
0%
(1.0%)
0%
0%
(1.0%)
0%
The discount rate represents the current market
assessment of the risks specific to each CGU,
taking into account the time value of money and
individual risks of the underlying assets that have
not been incorporated in the cash flow estimates.
The terminal value within VIU calculations has
used the terminal growth rate assumptions
provided in the above table.
The forecasts are prepared by management
based on current expectations for each CGU,
with consideration given to internal information
and relevant external industry data and analysis.
This requires assumptions and judgements about
the future, such as discount rates, long term
growth rates, and forecasted revenues to which
the model is sensitive and which are inherently
uncertain. Specifically, the Publishing CGU is
expected to be impacted by the continued decline
of the print advertising market, and this uncertainty
has been reflected in forecast assumptions.
Future capex spend is estimated at historical
replacement levels.
Key forecast revenue assumptions used are as follows:
Audio
Publishing
OneRoof
Print
Advertising
Digital
Advertising
Subscriptions
2024 - 2028 CAGR^
3.6%
(7.6%)
4.8%
(1.0%)
16.1%
^CAGR = compound annual growth rate.
The forecasts used in impairment testing have been
prepared to comply with the requirements of IAS 36
for that specific purpose. They should not be read
as a forecast of, or guidance to, the future financial
performance and earnings of the Group. Actual
results may differ materially from those forecast
or implied.
Whilst management considers that its forecast
assumptions are reasonable, short term volatility
may be experienced due to the impact of external
environmental and economic conditions. It is
reasonably possible, on the basis of existing
knowledge, that actual outcomes are different from
the forecast assumptions used and which could
require a material adjustment to the carrying amount
of the asset or liability affected. Accordingly, the
Directors have reviewed the potential changes to the
recoverable amounts that could arise from changes
in key assumptions and concluded that, at this time,
there are no reasonably possible adverse changes in
key assumptions that would result in an impairment
of the Audio and OneRoof CGU's.
The recoverable amount of the Publishing CGU was
calculated to be $123.1 million, resulting in headroom
of $6.4 million. As shown in the table above, this
included an assumption of 7.6% CAGR decline in
Print advertising revenue over the five-year forecast
period. The impact of any reasonably possible
changes that resulted in an additional 1.0% CAGR
decline in Print advertising revenue would be such
that headroom would reduce by approximately
$6.5 million. This includes an adjustment for certain
CGU expenses in line with revenue.
In addition, an increase in the discount rate used
of 0.5% would result in a decrease of $3.5 million
while a decrease of 0.5% would result in an increase
of $4.0 million of the recoverable amount of the
Publishing CGU.
It is reasonably possible that the CAGR decline in
Print advertising revenue could exceed 1.0% and it
is reasonably possible that discount rates could move
adversely in excess of 0.5%. These declines may
result in an impairment of the Publishing CGU on
a VIU approach. These impacts could also occur
in combination with each other.
88 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
The Directors determined that the increase in the
headroom, since the impairment recognised as at
31 December 2019, is not directly attributable to
the brands and as a result a reversal of previously
recognised impairment of indefinite life intangible
assets has not been recognised.
The Group compares the carrying amount of net
assets with the market capitalisation value at each
balance date. The share price at 31 December 2023
was $1.08 equating to a market capitalisation of
$198.6 million. This market value excludes any control
premium and may not reflect the value of 100% of
NZME’s net assets. The carrying amount of NZME’s
net assets at 31 December 2023 was
$132.4 million ($0.72 per share).
Accounting policy
Goodwill and intangible assets that have
an indefinite useful life are not subject to
amortisation and are tested annually for
impairment and at the end of each reporting
period if there is an indication that they may be
impaired. An impairment charge is recognised
for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s
fair value less costs to sell and value-in-use. For
the purposes of assessing impairment, assets
are grouped at the lowest levels for which there
are separately identifiable cash inflows which
are largely independent of the cash inflows
from other assets or groups of assets (CGUs).
Currently, the Group has three CGUs, being
Audio, Publishing and OneRoof. Non-financial
intangible assets, other than goodwill, that
suffer impairment are reviewed for possible
reversal of the impairment at each balance
sheet date.
ANNUAL REPORT 2023 89
3.2 PROPERTY, PLANT AND EQUIPMENT
Freehold
landA
$’000
BuildingsA
$’000
Leasehold
improvements
$’000
Plant and
equipment
$’000
Capital
work in
progressB
$’000
Total
$’000
As at 1 January 2022
Cost or fair value
Accumulated depreciation
and impairment
Net book value
Year ended 31 December 2022
265
-
265
67
(14)
53
14,854
264,070
1,341
280,597
(10,722)
(241,544)
-
(252,280)
4,132
22,526
1,341
28,317
Opening net book amount
265
53
4,132
22,526
Additions
Disposals
Depreciation
Reversal of impairment
Transfers from capital work
in progress
Net book value
As at 31 December 2022
Cost or fair value
Accumulated depreciation
and impairment
Net book value
-
-
-
-
-
265
265
-
265
Year ended 31 December 2023
Opening net book amount
265
Additions
Disposals
Depreciation
Other adjustments
Transfers from capital work
in progress
Net book value
As at 31 December 2023
Cost or fair value
Accumulated depreciation
and impairment
Net book value
-
-
-
-
-
265
265
-
265
-
-
3
-
-
56
67
(11)
56
56
-
-
(2)
-
-
54
67
(13)
54
-
(1)
32
(20)
(1,056)
(8,011)
80
312
34
1,341
4,942
-
-
-
28,317
4,974
(21)
(9,064)
392
-
4,746
(4,780)
3,421
19,353
1,503
24,598
14,425
254,804
1,503
271,064
(11,004)
(235,451)
-
(246,466)
3,421
19,353
1,503
24,598
3,421
19,353
-
-
11
(30)
(954)
(6,621)
-
6
1,503
3,303
-
-
-
359
3,595
(3,954)
24,598
3,314
(30)
(7,577)
6
-
2,826
16,314
852
20,311
14,784
247,173
852
263,141
(11,958)
(230,859)
-
(242,830)
2,826
16,314
852
20,311
A Freehold land and buildings are held at fair
value based on Director's valuations. If land and
buildings were stated on the historical cost basis,
the net book value of land would have been
$214,000 (2022: $214,000) and the net book
value of buildings would have been $20,181
(2022: $21,784). An independent valuation was
performed in February 2024 which supports the
Director's valuation at balance sheet date.
B Capital work in progress is transferred to the
relevant asset category once the project is
completed. Capital work in progress is not
depreciated prior to being transferred to the
relevant asset category. Capital work in progress
at 31 December 2023 and 31 December 2022 is
primarily comprised of expenditure on technology
projects.
90 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
Accounting policies
Owned land and buildings are held at fair value
less subsequent accumulated depreciation
for buildings. Leasehold improvements and
plant and equipment are stated at cost less
accumulated depreciation and impairment
losses. Cost includes the purchase price and all
directly attributable costs of bringing the asset to
its location and condition necessary to operate
as intended.
Land is not depreciated. Depreciation on
other assets is calculated using the straight
line method to allocate their cost or revalued
amounts, net of their residual values, over their
estimated useful lives, as follows:
• Buildings
• 10 to 50 years
• Leasehold improvements
• 2.5 to 50 years
• Plant & equipment
• 1.5 to 29 years
The gain or loss on the disposal or retirement
of an asset is the difference between the sale
proceeds and the carrying amount of the
asset and is included in the income statement.
Fair value of land and owned buildings
At the end of each reporting period, the
Directors update their assessment of the fair
value of each property. Any accumulated
depreciation at the date of revaluation is
eliminated against the gross carrying amount
of the asset and the net amount is restated to
the revalued amount of the asset. Increases in
the carrying amounts arising on revaluation of
land and buildings are credited to revaluation
reserves in equity. To the extent that the
increase reverses a decrease previously
recognised in the income statement, the
increase is first recognised in the income
statement. Decreases that reverse previous
increases of the same asset are first charged
against the revaluation reserves directly in
equity to the extent of the remaining reserve
attributable to the asset. All other decreases
are charged to the income statement.
Impairment of assets
An asset’s carrying amount is written down
immediately to its recoverable amount if the
asset’s carrying amount is greater than its
estimated recoverable amount. Assets that are
subject to depreciation are tested for impairment
whenever changes in circumstances indicate
that the asset’s carrying amount may exceed
its recoverable amount. An impairment charge
is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable
amount. Assets that suffer an impairment are
reviewed for possible reversal of the impairment
at each balance sheet date.
ANNUAL REPORT 2023 91
3.3 RIGHT-OF-USE ASSETS
Significant judgments: Where a discount rate is not explicit in a lease the Group determines an
applicable discount rate to use based on publicly available rates for Government Bonds, Bloomberg
corporate bond spreads and yields and New Zealand swap rates and then applies an adjustment to
these rates to apply a company specific credit risk. In determining the lease term the Group includes
any periods covered by options to extend where the Group is reasonably certain to exercise that option.
As at 1 January 2022
Net book value
Year ended 31 December 2022
Additions
Depreciation
Reversal of impairment previously
recognised
Transfer from lease receivables
Buildings
$’000
Transmission
$’000
Vehicles
$’000
Other
$’000
Total
$’000
43,486
23,040
987
-
67,513
2,865
-
(6,988)
(3,670)
157
775
-
-
513
(562)
-
-
(4)
50
(5)
-
-
3,428
(11,225)
157
775
(1)
3,009
Changes in scope or lease terms
(885)
3,899
As at 31 December 2022
Net book value
39,410
23,269
934
44
63,657
Year ended 31 December 2023
Additions
Depreciation
Transfer from lease receivables
Changes in scope or lease terms
536
-
(7,596)
(3,830)
(4)
3,372
-
2,085
564
(559)
-
18
-
1,100
(10)
(11,995)
-
-
(4)
5,475
Net book value
35,718
21,524
957
34
58,233
92 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
Accounting policy
The Group leases various offices, transmission
towers, vehicles and other equipment which are
all classified as operating leases.
Leases are recognised as a right-of-use asset
and a corresponding lease liability. Each lease
payment is allocated between the lease principal
and finance costs. Finance costs are charged
to profit or loss over the lease period and the
right-of-use asset is depreciated over the shorter
of the asset's useful life and the lease term on a
straight-line basis.
Assets and liabilities arising from a lease are
initially measured on a present value basis. Lease
liabilities include the net present value of the
following lease payments:
•
•
•
•
•
fixed payments (including in-substance
fixed payments), less any lease incentives
receivable;
variable lease payments that are based
on an index or a rate;
amounts expected to be payable by the
lessee under residual value guarantees;
the exercise price of a purchase option
if the lessee is reasonably certain to exercise
that option; and
payments of penalties for terminating the
lease, if the lease term reflects the lessee
exercising that option.
3.4 TRADE AND OTHER RECEIVABLES
Trade receivables
Provision for impairment
Amounts due from related companies
Finance lease receivables
Other receivables and prepayments
Total current trade and other receivables
Movements in the provision for impairment are as follows:
Balance at beginning of the year
Provision for impairment expense
Receivables written off
Provision for impairment
Other receivables and prepayments
Finance lease receivables
Total non-current trade and other receivables
Note
2023
$’000
2022
$’000
37,295
42,534
(631)
36,664
330
545
7,518
45,057
516
228
(113)
631
561
3,892
4,453
(516)
42,018
65
528
6,140
48,751
634
17
(135)
516
1,207
4,435
5,642
7.2
3.4.3
3.4.3
ANNUAL REPORT 2023 93
3.4.1
Classification
Trade receivables are amounts due from customers
for goods sold or services performed in the ordinary
course of business as well as receivables in relation
to goods or services to be sold or performed in the
future. Receivables and other financial assets are
classified and subsequently measured at amortised
cost on the basis of both the Group's business model
for managing the financial assets and the contractual
cash flow characteristics of the financial asset. If
collection of the amounts is expected in one year or
less they are classified as current assets. If collection
is expected to be in greater than one year they are
classified as non-current.
3.4.2
Impairment and risk exposure
The maximum exposure to credit risk at the balance
sheet date is the higher of the carrying value and
fair value of each receivable. The Group does not
hold any collateral as security. Refer to note 4.7.3 for
credit risk and note 4.8 for fair value information.
Accounting policy
Trade receivables are recognised initially at fair
value and subsequently measured at amortised
cost using the effective interest method, less
provision for impairment.
Receivables are monitored on an individual
basis and the Group considers the probability of
default upon initial recognition of the receivable
and throughout the period and provides for
receivables expected to be impaired.
The amount of loss is recognised in the income
statement within other expenses. When a trade
receivable is uncollectible, it is written off against
the provision account for trade receivables.
Subsequent recoveries of amounts previously
written off are credited to the income statement
against the impairment losses on receivables.
3.4.3
Finance lease receivables
Finance lease receivables relate to the sub-leases of parts of the Graham Street and Whangarei right-of-use
assets sub-let during the financial year.
As at 1 January
Transfer from / (to) right-of-use assets
Interest on lease receivables
2023
$’000
4,963
4
236
2022
$’000
6,134
(775)
285
Total lease receivables before cash payments
5,203
5,644
Rent concession
Interest received
Principal received
Net investment in lease receivables at 31 December A
Current assets
Non-current assets
Net investment in lease receivables at 31 December
-
(236)
(530)
4,437
545
3,892
4,437
(29)
(285)
(367)
4,963
528
4,435
4,963
A Make good provisions are included in material sub-leases to ensure the Group's exposure to risk is minimised.
94 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
The table below details the Group’s contractual undiscounted cash flows for the finance lease receivable
assets to maturity.
Less than 1 year
1 to 5 years
Greater than 5 years
Total lease payments receivable
Unearned finance income
Net investment in lease receivables at 31 December
Accounting policy
When the Group acts as a lessor in sub-leasing
its right-of-use assets, it determines, at lease
commencement date, whether each lease
is a finance lease or an operating lease by
assessing whether the lease transfers to the
lessee substantially all the risks and rewards
of ownership incidental to ownership of the
underlying asset. If this is the case then the lease
is a finance lease; if not then it is an operating
lease. As part of this assessment the Group
considers certain indicators such as whether the
lease is for the major part of the economic life of
the asset.
For the purposes of classifying the sub-lease
reference is to the right-of-use asset arising
from the head lease, not with reference to the
underlying asset.
Assets arising from a sub-lease are initially
measured on a present value basis and include
3.5
INVENTORIES
Inventories is predominantly the stock of newsprint
held at the Ellerslie print plant and is valued at cost.
The longevity of the commodity, and the short
period of time that stock is on hand, reduces the
Group's risk of holding obsolete stock.
Accounting policy
2023
$’000
755
2,269
2,230
5,254
(817)
4,437
2022
$’000
764
2,243
3,009
6,016
(1,053)
4,963
the following:
•
•
•
•
•
•
initial direct costs incurred in acquiring the
sub-lease;
fixed payments (including in-substance
fixed payments), less any lease incentives
payable;
variable lease payments that are based on
an index or a rate;
amounts expected to be receivable under
residual value guarantees;
the exercise price of a purchase option if
the lessee is reasonably certain to exercise
that option; and
payments of penalties for terminating the
lease, if the lease term reflects the lessee
exercising that option.
During the year ended 31 December 2023
inventories totalling $13,186,488 were expensed
through production and distribution expenses
(2022: $11,167,379).
Inventories are measured at cost and are expensed using the first in first out ("FIFO") method, as used.
ANNUAL REPORT 2023 95
3.6
TRADE AND OTHER PAYABLES
Current payables
Employee entitlements
Deferred revenue
Trade payables and accruals
Total current trade and other payables
Note
2023
$’000
2022
$’000
5,930
17,639
25,271
48,840
6,009
16,335
30,133
52,477
All deferred revenue at 31 December 2022 was recognised in revenue during 2023.
Accounting policies
Trade and other payables
Short-term incentive plans
Trade payables, including accruals not yet
billed, are recognised when the Group becomes
obliged to make future payments as a result of a
purchase of assets or services. Trade payables
are carried at amortised cost which is the fair
value of the consideration to be paid in the future
for goods and services received. Trade payables
are unsecured and are generally settled within
30 to 45 days.
Employee entitlements
Wages and salaries and annual leave
Liabilities for wages and salaries, including non-
monetary benefits and annual leave expected
to be wholly settled within 12 months from the
balance sheet date are recognised in payables
and accruals in respect of employees’ services
up to the balance sheet date and are measured
at the amounts expected to be paid when the
liabilities are settled. Amounts to be settled more
than 12 months after the balance sheet date are
recognised as a non-current payable. Liabilities
for non-accumulating sick leave are recognised
when the leave is taken and measured at the
rates paid or payable.
A liability for short-term incentives is recognised
in trade payables when there is an expectation
of settlement and at least one of the following
conditions is met:
•
•
•
there are contracted terms in the plan for
determining the amount of the benefit;
the amounts to be paid are determined
before the time of completion of the
financial statements; or
past practice gives clear evidence of the
amount of the obligation.
Liabilities for short-term incentives are
expected to be settled within 12 months and are
recognised at the amounts expected to be paid
when they are settled.
Refer to note 4.3 for disclosures relating to
share based payments and note 7.1 for key
management compensation.
Deferred revenue
The accounting policy for deferred revenue is
disclosed in note 2.1.
96 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
3.7 NET TANGIBLE LIABILITIES
Net tangible assets per share is a non-GAAP measure that is required to be disclosed by the
NZX Listing Rules.
The calculation of the Group's net tangible assets per share and its reconciliation to the consolidated
balance sheet is presented below:
As at 31 December
Total assets
Deferred tax asset
Intangible assets
Total liabilities
Net tangible liabilities
Minority interest
Net tangible liabilities for the owners of the Company
Number of shares issued (in thousands)
Net tangible liabilities per share (in $)
3.8 BUSINESSDESK ACQUISITION
2023
$’000
2022
$’000
290,399
306,237
(5,709)
(3,959)
(142,445)
(143,779)
(157,952)
(168,459)
(15,707)
(9,960)
-
(15,707)
183,914
($0.09)
789
(9,171)
183,914
($0.05)
At 31 December 2023 it was determined that no earn-out provision was payable in relation to the acquisition
of BusinessDesk on 17 January 2022. All provisions in relation to the potential payment of the earn-out
provision have been released.
ANNUAL REPORT 2023 97
4.0 CAPITAL MANAGEMENT
4.1
SHARE CAPITAL
2023
’000
2022
’000
2023
$’000
2022
$’000
Authorised, issued and paid up share capital
Balance at the beginning of the period
183,914
197,570
344,473
361,758
Deferred tax on share schemes
Repurchase of shares
Shares issued during the year
-
-
-
-
892
-
(14,705)
1,049
-
-
(17,599)
314
Balance at the end of the period
183,914
183,914
345,365
344,473
Accounting policy
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds.
4.2 RESERVES
As at 1 January 2022
Share based payments expense
TIP settlement
Transfer to retained earnings
Share of revaluation of joint ventures'
and associates' assets
Effective gain on hedging instruments
Reclassification to profit or loss
Net exchange difference on translation of foreign
operations
As at 31 December 2022
Share based payments expense
Effective loss on hedging instruments
Reclassification to profit or loss
Net exchange difference on translation of foreign
operations
Share based
payments
$’000
Equity
investments
revaluation
$’000
3,060
1,683
(1,085)
-
-
-
-
-
3,658
341
-
-
-
1,271
-
-
(259)
51
-
-
-
1,063
-
-
-
-
As at 31 December 2023
3,999
1,063
Other
$’000
589
-
-
-
-
166
(199)
5
561
-
(1)
Total
$’000
4,920
1,683
(1,085)
(259)
51
166
(199)
5
5,282
341
(1)
(204)
(204)
(2)
354
(2)
5,416
Other reserves include the cash flow hedge reserve which has a balance of $nil at 31 December 2023
(see note 4.7.2), the asset revaluation reserve and the foreign currency translation reserve.
98 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
4.3 SHARE BASED PAYMENTS
As at 1 January
Granted (2021 TIP) A
Granted (2022 TIP LTI component) B
Granted (2023 TIP LTI component) B
Adjustment for dividends foregone C
Surrendered D
Shares issued (2019 TIP) E
Forfeited F
2023
2022
Average price
per right ($)
Number
of rights
Average price
per right ($)
Number
of rights
0.64
6,715,262
0.52
7,126,686
-
-
-
0.73
0.85
-
-
-
496,765
287,771
-
-
0.52
-
1.13
-
1.30
0.63
(7,398)
-
585,324
-
518,446
(735,561)
0.63
(1,048,583)
0.92
(279,151)
-
-
Granted (2022 TIP STI component) A
1.43
(3,504)
Granted and awarded as at 31 December
7,217,143
2022 TIP STI component (estimation) G
-
-
As at 31 December
0.60
7,217,143
6,438,914
276,348
6,715,262
1.43
0.64
A Adjustment to the number of actual rights issued
under the various TIP schemes.
B The number of performance rights granted in
relation to the LTI components of the 2022 and
2023 TIP schemes.
C For the 2019, 2020 and 2021 TIP schemes the
Board has approved that participants will be
entitled to additional shares, or a cash payment,
when the rights are exercised for any dividends
foregone during the period that the rights are
held. For dividends declared during the period
1 January 2023 to 31 December 2023, this resulted
in an additional 549,635 shares accrued.
D Surrendered performance rights relate to the
2019 TIP, with participants surrendering rights in
lieu of PAYE owing on the issue of shares, and the
2022 LTI component in relation to one participant
surrendering their rights on leaving the Company.
E The rights granted under the 2019 TIP were
exercised on 30 December 2022 with 1,048,583
shares being issued. The share price at the date
of issue was $1.15.
F The forfeited shares are in relation to the 2022 and
2021 schemes where participants have not met
the service period criteria.
G The number of performance rights expected to
be granted in 2023 in respect of the 2022 TIP STI
component.
ANNUAL REPORT 2023 99
In relation to the 2022 TIP and 2023 TIP the Group
expects to issue the net shares after withholding
shares with a value equal to the participants tax
obligations under New Zealand tax legislation
arising as a result of the issue of shares at the
relevant exercise date. This reduces the dilutive
impact of the rights on the earnings per share
calculation for the Group for the years ended
31 December 2023 and 31 December 2022.
The shares that are expected to be withheld are
excluded from the rights table above.
Participants of the 2022 TIP and 2023 TIP are
not entitled to receive any dividends paid by the
Company as a holder of rights.
Share rights outstanding at the end of the year have the following exercise date:
Plan
2020 TIP scheme
2021 TIP scheme
2022 TIP (STI)
2022 TIP (LTI)
2023 TIP (LTI)
As at 31 December
Vesting date
Exercise date
2023
Number
of rights
2022
Number
of rights
31 Dec 2021
3 Jan 2024
4,119,216
3,979,651
31 Dec 2022
31 Dec 2024
1,901,713
1,939,090
1 Jan 2024
3 Jan 2024
254,131
276,348
1 Jan 2025
1 Jan 2025
445,318
520,173
1 Jan 2026
1 Jan 2026
496,765
-
7,217,143
6,715,262
2023
2022
7 months
14 months
Weighted average remaining time until rights outstanding at
the end of the period automatically convert to ordinary shares.
(refer to note 4.3.2 for shares issued on 3 January 2024).
No rights were awarded for the 2023 TIP (STI) component.
4.3.1 2020 and 2021 and TIP schemes
The rights owing to the participants the
2020 TIP have vested with an exercise date
of 3 January 2024 (see note 4.3.2). The 2021 TIP
rights have vested and will be settled by the issue
of shares on 31 December 2024. See the
consolidated financial statements for the year
ended 31 December 2022 for the details of these
vested schemes.
100 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
4.3.2 Issue of shares subsequent to balance sheet date
On 3 January 2024 shares were issued in relation
to the 2020 TIP and 2022 TIP (STI component). The
following table details the transactions relating to
the issue of these shares.
Shares issued (2020 TIP)
Surrendered
Shares issued (2022 TIP STI component)
Decrease in rights on 3 January 2024
Number
of rights
2,512,716
1,606,500
254,131
4,373,347
The share price at the date of issue of the shares in the above table was $1.06.
4.3.3 2022 and 2023 TIP schemes
The Company's current TIP is designed to align
reward outcomes with individual performance
and the performance of the Company and value
creation for shareholders over both the short and
long term. The framework was approved by the
Board in February 2022.
The TIP framework includes both a short-term
component ("STI") and a long-term incentive ("LTI").
The STI comprises 60% of the total TIP opportunity
with the LTI comprising the remaining 40%.
The number of rights awarded for each scheme
are based on the Volumn Weighted Average Price
("VWAP") of the Company's shares for the first 20
business days of trading following the Group's results
announcement for the preceding financial year.
The following table summarises the grant date price
and VWAP for the each scheme.
2020 TIP scheme
2021 TIP scheme
2021 TIP scheme
2021 TIP scheme
2022 TIP scheme - STI and LTI
2023 TIP scheme - STI and LTI
Grant date
5 Mar 2020
4 Dec 2020
10 Dec 2020
5 Nov 2021
22 Apr 2022
23 Jun 2023
Share price
at grant date
$0.36
$0.71
$0.66
$1.25
$1.43
$0.99
VWAP
$0.40
$0.74
$0.74
$0.74
$1.39
$1.15
ANNUAL REPORT 2023 101
STI component of the schemes
The STI is based on the performance of the
Company for the financial year measured in terms
of earnings and the achievement of various specific
targets set for each individual participant that
align with the Company’s strategic goals. The STI
component includes both a cash element and a
share rights element. The cash payment is payable
following the end of the financial year period, with
share rights issued at the same time and deferred
for an additional year before they vest, subject to
continued employment over that extended period.
STI Performance measures
•
•
A minimum EBITDA threshold to be met
before any STI awards will be payable.
Individual performance target payments
(60% to 130%).
% of target
% of target opportunity
awarded
< minimum target 0%
minimum up to
100%
Pro-rata vesting between
50% and 100%
> 100%
Potential of receiving 150%
Awards under the STI portion of the TIP are
granted to participants following the assessment
of performance. To the extent that performance
measures are met:
•
•
58.3% of awards are made in cash; and
41.7% of awards are granted in rights to acquire
fully paid ordinary shares in the Company for nil
consideration ("Rights").
The periods and dates relevant to each scheme are
defined below:
•
•
•
Performance
period
the financial year of the
scheme
Deferral period the 12 months following
the end of the financial
year to which the scheme
relates
Vesting date
of rights
1 January following the
end of the deferral period
It is assumed that all participating employees will
remain employed with the Company until the end of
the deferral period (unless already resigned).
LTI Performance measures
The LTI is based on a three-year performance period
commencing on 1 January of the financial year for
which the scheme is offered with awards subject to
both earnings per share ("EPS") and total shareholder
return ("TSR") performance targets. The long-term
component comprises an issue of share rights
that may vest at the end of three years, subject
to achievement of the EPS and TSR performance
targets and continued employment by the Company.
The EPS and TSR components both comprise equal
portions of the LTI.
The Board will determine the performance of the
EPS and TSR compared to target and the Board
may adjust calculations at the relevant date to take
account of any capital reconstructions, corporate
transactions or any other circumstances which in its
opinion are appropriate in the circumstances and
consistent with the intention in respect of the LTI
performance conditions.
The allocation of rights to participants of the scheme,
for both the EPS and TSR components, is based on
the following levels of performance:
% of target
% of target opportunity
awarded
< minimum target 0%
minimum up to
100%
Pro-rata vesting between
50% and 100%
> 100%
100%
The periods and dates relevant to each scheme
are defined below:
• Performance
period
• Vesting date
of rights
24 months from
1 January of the financial
year for which the
scheme relates
A date after LTI
performance conditions
determined
102 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
Accounting policy
Total incentive plan ("TIP")
The fair value of rights granted under the TIP plan
is recognised as an employee benefits expense
with a corresponding increase in equity over the
vesting period, being the performance period
and the service period. The fair value is measured
at grant date and the number of rights are
determined using the volume weighted average
price of NZME's shares on the NZX over the first
5 trading days of the performance period, for
the 2020 and 2021 TIP schemes, and the first 20
consecutive NZX trading days after the release of
the Group's financial result for the preceding year
for the 2022 and 2023 TIP schemes.
The fair value at grant date is determined
taking into account the share price, any market
performance conditions and any non-vesting
conditions, but excluding the impact of any
service and non-market performance
vesting conditions.
Non-market vesting conditions are included in
assumptions about the number of rights that are
expected to vest. At each balance sheet date, the
Group revises its estimate of the number of rights
that are expected to become exercisable.
The performance target for the TSR component
of current and future incentive plans is a market
vesting condition which is taken into account
in calculating the grant date fair value. The
fair value reflects the likelihood of various TSR
outcomes and adjustments to unvested rights are
only made to reflect changes in the number of
participants that will meet the service condition.
The employee benefits expense recognised
each period takes into account the most recent
estimate. The impact of the revision to the
original estimates, is recognised in profit or loss
with a corresponding adjustment to equity.
ANNUAL REPORT 2023 103
4.4 DIVIDENDS
4.4.1 Dividend policy
The Group’s dividend policy is to pay dividends
of between 50-80% (2022: 50-80%) of free
cash flow while having regard to the Company’s
capital requirements, operating performance
and financial position. The payment of dividends
is also subject to the Company being within the
leverage ratio range of 0.5 to 1 times the rolling
12 month trading EBITDA.
Final dividend for 2022, declared 22 February 2023,
paid 22 March 2023
Special dividend, declared 20 June 2022,
paid 12 July 2022
Interim dividend for 2023, declared 24 August 2023,
paid 27 September 2023
Total dividends declared and paid during the year
Supplementary final dividend for 2022
paid 22 March 2023
Supplementary special dividend paid 12 July 2022
Supplementary interim dividend for 2023
paid 27 September 2023
4.4.2 Dividends paid and declared
Amounts recognised as distributions
to equity holders during the year:
2023
Cents per
share
2022
Cents per
share
2023
$’000
2022
$’000
6.0
5.0
11,035
9,879
-
3.0
5.0
3.0
-
9,678
5,517
5,795
16,552
25,352
1.06
0.88
1,514
1,166
-
0.88
0.88
0.53
-
1,188
589
817
Total supplementary dividends declared and paid
2,103
3,171
Proposed final dividend for the year ended
31 December 2023
The dividends paid in 2023 were not franked while in
2022 the final dividend for 2021 was fully franked, the
special dividend paid in July was partially franked and
the interim dividend for 2022 was not franked.
Supplementary dividends were paid to registered
shareholders who were not tax residents in New
Zealand and who held less than 10% of the shares
6.0
6.0
11,201
11,035
in the Company at the record date for the related
distribution.
The proposed dividend, declared by the Board
of Directors on 20 February 2024, is to be paid
on 20 March 2024 to registered shareholders as
at 8 March 2024.
104 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
4.4.3 Imputation credits
2023
$’000
2022
$’000
Imputation credits available for subsequent reporting periods based on the
New Zealand 28% tax rate for the Group
NZ$ 24,205
NZ$ 24,211
4.5
INTEREST BEARING LIABILITIES
The following table details the Group’s combined net debt at 31 December 2023.
The movements in these balances during the year are provided in notes 4.5.1 Secured bank loans
and note 4.5.2 Lease liabilities.
Bank loans
Cash and cash equivalents
Net bank debt
Lease liabilities
Net debt at 31 December
4.5.1 Secured bank loans
Bank loans
As at 1 January
Proceeds from borrowings
Repayments of borrowings
Capitalised borrowing costs
Amortisation of borrowing costs
Loan modification adjustments
Reclassification of unamortised borrowing costs from prepayments
As at 31 December
Cash and cash equivalents
As at 1 January
Cash flows
As at 31 December
Net bank debt
2023
$’000
23,490
(5,524)
17,966
84,677
2022
$’000
23,134
(5,670)
17,464
91,174
102,643
108,638
2023
$’000
2022
$’000
23,134
-
82,500
71,250
(82,500)
(47,250)
-
98
258
-
(166)
236
(564)
(372)
23,490
23,134
(5,670)
(13,538)
146
(5,524)
17,966
7,868
(5,670)
17,464
ANNUAL REPORT 2023 105
The Group is funded from a combination of its
own cash reserves and NZ$50 million bilateral
bank loan facilities, which NZME refinanced on
21 November 2018, 22 July 2020 and 9 December
2022, of which $24.0 million (2022: $24.0 million)
is drawn and $26.0 million (2022: $26.0 million)
is undrawn as at 31 December 2023. This facility
expires on 31 January 2026.
The interest rate for the drawn facility is the BKBM
plus credit margin.
The NZME bilateral facilities contain undertakings
which are customary for facilities of this nature
Accounting policy
including, but not limited to, provision of
information, negative pledge and restrictions
on priority indebtedness and disposals of assets.
The assets of the Group are collateral for the
interest bearing liability.
In addition, the Group must comply with financial
covenants (a net debt to EBITDA ratio and an EBITDA
to net interest expense ratio) for each 12 month
period ending on 31 March, 30 June, 30 September
and 31 December. The Group has complied with
these covenants throughout the year.
Borrowings are initially recognised at fair value less
attributable transaction costs and subsequently
measured at amortised cost. Any difference
between cost and redemption value is recognised
in the income statement over the period of the
borrowing on an effective interest basis.
Costs incurred in connection with the arrangement
of borrowings are deferred and amortised over the
period of the borrowing. These costs are netted
off against the carrying value of borrowings in
the balance sheet.
4.5.2 Lease liabilities
As at 1 January
Current lease liabilities
Non-current lease liabilities
Total lease liabilities
Interest on lease liabilities
New leases
Changes in scope, lease terms and other adjustments
Total lease liabilities before cash payments
Interest paid on leases
Principal payments
Total cash payments
Total lease liabilities at 31 December
Current lease liabilities
Non-current lease liabilities
Total lease liabilities at 31 December
2023
$’000
2022
$’000
11,596
79,578
91,174
4,703
1,100
5,544
11,340
85,445
96,785
4,890
3,428
2,920
102,521
108,023
(4,703)
(13,141)
(4,890)
(11,959)
(17,844)
(16,849)
84,677
12,572
72,105
84,677
91,174
11,596
79,578
91,174
106 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
4.6 CASH FLOW INFORMATION
Reconciliation of net cash inflows from operating activities to profit
for the year:
Profit for the year
Depreciation and amortisation expense
Borrowing cost amortisation
Non cash movement on overhedged swaps
Loan modification adjustments
Change in current / deferred tax payable
Net loss on sale of non-current assets
Group's share of retained losses in joint ventures and associates
Lease adjustments
Impairment reversal of property plant and equipment
Impairment reversal of right-of-use asset
Share based payment expense
BusinessDesk earn-out provision
Changes in assets and liabilities net of effect of acquisitions:
Trade and other receivables
Inventories
Prepayments
Trade and other payables and employee entitlements
Net cash inflows from operating activities
Note
2023
$’000
2022
$’000
12,200
28,623
98
74
258
22,680
27,391
236
(59)
(564)
(2,261)
(3,489)
-
675
68
-
-
341
(413)
4,256
560
631
(3,604)
41,506
7
231
(58)
(392)
(157)
1,683
413
(3,109)
(3,735)
(198)
(3,391)
37,489
3.8
Accounting policy
For the purposes of presentation on the statement of cash flows, cash and cash equivalents includes
cash on hand and short term deposits held at call with finance institutions, net of bank overdrafts.
ANNUAL REPORT 2023 107
4.7
FINANCIAL RISK MANAGEMENT
4.7.2 Market risk
4.7.1 Capital and risk management
Cash flow and fair value interest rate risk
The Group's objectives when managing capital
are to:
•
safeguard their ability to continue as a going
concern, so that they can continue to provide
returns for shareholders and benefits for other
stakeholders; and
• maintain an optimal capital structure to reduce
the cost of capital.
In order to maintain or adjust the capital structure,
the Group may adjust the amount of dividends paid
to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
Refer to note 4.5 for undrawn facilities to which
the Group has access to as well as the net debt
calculation that is used by the Group to manage
capital requirements.
The Group’s activities expose it to a variety
of financial risks:
• market risk, including interest rate risk
and price risk;
credit risk; and
liquidity risk.
•
•
The Group’s overall risk management programme
focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects
on the financial performance of the Group. The
Group uses different methods to measure different
types of risk to which it is exposed. These methods
include sensitivity analysis in the case of interest
rate and ageing analysis for credit risk.
Financial risk management is carried out by the
Group Treasury function. The Group Treasury
function meet regularly with the Group Chief
Financial Officer to cover specific areas, such as
interest rate risk and credit risk, use of derivative
financial instruments and non-derivative financial
instruments, and investment of excess liquidity.
Due to the Group's limited operations in foreign
jurisdictions, the Group does not have a significant
foreign exchange exposure.
Long term borrowings issued at variable rates
expose the Group to cash flow interest rate risk.
Borrowings issued at fixed interest rates expose
the Group to fair value interest rate risk.
The Group has previously used derivative
financial instruments to hedge it's exposure
to interest rate risk. At 31 December 2023 the
Group had no derivative financial instruments
compared to the $15.0 million invested at
31 December 2022 with a current asset value
of $279,485. The final interest rate swap matured
in August 2023 and during the period ended
on this date an expense of $74,394 (2022:
a credit of $58,605) was recorded in finance
costs relating to fair value adjustments.
At 31 December 2023 current interest bearing debt
is fixed for 60 days on a rolling basis. The exposure
to interest rate risk is no longer managed through
the use of hedges as the risk is not significant.
Based on the outstanding net floating debt at
31 December 2023 a change in interest rates
of +/-1% per annum with all other variables being
constant would have impacted post-tax profit
and equity by $0.2 million lower / higher
(2022: $0.2 million lower / higher).
Price risk
The Group is not exposed to significant price risk.
There is some risk associated with other financial
assets however this is not deemed to be significant.
4.7.3 Credit risk
Credit risk is managed on a Group basis. Credit
risk arises from cash and cash equivalents and
deposits with banks and financial institutions, as
well as credit exposures to wholesale and retail
customers, including outstanding receivables
and committed transactions. For banks and
financial institutions, the creditworthiness is
assessed prior to entering into arrangements
and approved by the Board. For other customers,
NZME's credit control department assesses
the credit quality, taking into account financial
position, past experience and other factors. The
utilisation of credit limits is regularly monitored
and the Group does not normally obtain
collateral from its customers.
108 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
The table below sets out additional information about the credit quality of trade receivables net of the
provision for impairment.
31 December 2023
Expected loss rate
Trade receivables
Impaired receivables
31 December 2022
Expected loss rate
Trade receivables
Impaired receivables
Current
$’000
Less than
one month
$’000
0.4%
25,200
(102)
1.0%
7,725
(81)
25,098
7,644
Current
$’000
Less than
one month
$’000
0.1%
29,924
(39)
0.7%
8,264
(60)
29,885
8,204
Trade receivables are generally settled within 30 to 45
days. The Directors consider the carrying amount of
trade receivables approximates to their net fair value.
Trade receivables are monitored on an individual basis
and the Company considers the probability of default
upon initial recognition of the trade receivable and
throughout the year and provides for trade receivables
considered to be impaired.
As of 31 December 2023, trade receivables of
$3,922,000 (2022: $3,929,000) were past due
but not impaired.
Past due
Three to
six months
$’000
Over six
months
$’000
Total
$’000
10.6%
1,403
(149)
1,254
15.3%
1,249
37,295
(191)
(631)
1,058
36,664
Past due
Three to
six months
$’000
Over six
months
$’000
Total
$’000
8.7%
1,339
(117)
1,222
22.9%
1,134
42,534
(260)
(516)
874
42,018
One to
three
months
$’000
6.3%
1,718
(108)
1,610
One to
three
months
$’000
2.1%
1,873
(40)
1,833
The maximum exposure to credit risk at
31 December 2023 is equal to the carrying
amount of cash and cash equivalents and trade
and other receivables. The Group is not exposed
to any concentrations of credit risk within cash and
cash equivalents or trade and other receivables.
Credit risk further arises in relation to financial
guarantees given to certain parties from time to time.
ANNUAL REPORT 2023 109
4.7.4 Liquidity risk
Prudent liquidity risk management implies
maintaining sufficient cash and marketable
securities, the availability of funding through an
adequate amount of committed credit facilities and
the ability to close out market positions. Due to the
dynamic nature of the underlying business, Group
Treasury aims at maintaining flexibility in funding
by keeping committed credit lines available.
Management monitors rolling forecasts of the
Group’s liquidity reserve on the basis of expected
cash flows.
The tables below analyse the Group’s financial
liabilities including interest to maturity into relevant
maturity groupings based on the remaining period
at the balance sheet date to the contractual maturity
date. The amounts disclosed in the tables are the
contractual undiscounted cash flows.
Less than
one year
$’000
Between
one and two
years
$’000
Between
two and five
years
$’000
Over
five years
$’000
Total
cash flows
$’000
31 December 2023
Trade payables and accruals
25,271
-
-
-
Lease liabilities
16,660
15,802
43,875
23,437
25,271
99,774
30,120
2,040
43,971
2,040
17,842
26,040
69,915
-
23,437
155,165
Bank loans
Total
31 December 2022
Trade payables and accruals
Lease liabilities
Bank loans
Total
30,133
15,992
2,160
-
-
-
30,133
14,932
42,124
36,950
109,998
2,160
26,160
-
30,480
48,285
17,092
68,284
36,950
170,611
4.8
FAIR VALUE MEASUREMENT
4.8.1 Fair value hierarchy
The Group measures and recognises the following
assets and liabilities at fair value on a recurring basis:
•
•
Financial assets at fair value through profit or
loss (FVTPL);
Land and buildings (excluding leasehold
improvements).
NZ IFRS 13 requires disclosure of fair value
measurements by level of the following fair
value measurement hierarchy:
•
•
•
Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included
within level 1 that are observable for the asset
or liability, either directly or indirectly; and
Level 3: inputs for the asset or liability that
are not based on observable market data
(unobservable inputs).
110 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
4.8.2 Recognised fair value measurements
Note
2023
$’000
2022
$’000
Recurring fair value measurements
Financial assets (Level 2)
Derivative financial instruments: current assets
4.7.2
Financial assets (Level 3)
There are no financial assets carried at fair value. Other financial assets
of $815,000 A (2022: $815,000) are measured at amortised cost and
therefore have been excluded from this table.
Total financial assets
Non-financial assets (Level 3)
Freehold land
Buildings
Total non-financial assets
3.2
3.2
-
-
265
54
319
279
279
265
56
321
A Other financial assets comprise of a loan to Event Finda NZ Ltd. The loan is interest bearing and
is repayable under certain conditions.
All fair value measurements referred to above are in
either level 2 or level 3 of the fair value hierarchy and
there were no transfers between levels. The Group’s
policy is to recognise transfers between fair value
hierarchy levels as at the end of the year.
the balances comprise of prepayments in relation
to cash already received by the Group and lease
receivables where the carrying value has been
calculated based on net present values of future
cash inflows.
4.8.3 Disclosed fair values
The Group also has a number of assets and liabilities
which are not measured at fair value but for which
fair values are disclosed in these notes.
The carrying amounts of current trade receivables
and payables are assumed to approximate their fair
values due to their short-term nature.
The fair value of the non-current trade receivables
are assumed to approximate their carrying values as
The fair value of interest bearing liabilities disclosed
in note 4.5 is estimated by discounting the future
contractual cash flows at the current market
interest rates that are available to the Group for
similar financial instruments. For the year ended
31 December 2023, the borrowing rates were
determined to be between 6.1% and 7.9% (2022:
between 3.8% and 7.2%), depending on the
type of borrowing. The fair value of borrowings
approximates the carrying amount, as the impact
of discounting is not significant (level 2).
ANNUAL REPORT 2023 111
4.8.4 Valuation techniques used to derive
at level 2 and 3 fair values
Recurring fair value measurements
The fair value of financial instruments that are not
traded in an active market is determined using
valuation techniques. These valuation techniques
maximise the use of observable market data where
it is available and rely as little as possible on entity
specific estimates. If all significant inputs required
to fair value an instrument are observable, the
instrument is included in level 2.
If one or more of the significant inputs is not
based on observable market data, the instrument
is included in level 3.
The Group uses Director valuation, supported by an
independent valuation performed in February 2024,
for its freehold land and buildings less subsequent
depreciation for buildings, to ensure that the
carrying value of the assets is materially consistent
with their fair value. The land and buildings owned
by the Group are transmission sites and associated
buildings, and as such are specialised and have
limited saleability. The best evidence of fair value
is current prices in an active market for similar
properties; however, these are not readily available
for such specialised sites in such locations. The
Directors believe that the current carrying value of
the assets equates to their fair value given the nature
and location of the assets. All resulting fair value
estimates for properties are included as level 3.
112 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
5.0 TAXATION
5.1
INCOME TAX EXPENSE
Reported income tax expense comprises:
Current tax expense
Deferred tax benefit
Under / (over) provision in prior years
Income tax expense
Income tax expense differs from the amount prima facie payable as follows:
Profit before income tax expense
Prima facie income tax at 28%
Non-assessable asset sales and exempt distribution receipts
Non-assessable loss from equity accounting of investments
in joint ventures and associates
Non-deductible expenses
Share schemes' assessible cost
Under / (over) provision in prior years
Income tax expense
2023
$’000
2022
$’000
5,920
(858)
516
5,578
17,778
4,978
-
165
145
(226)
516
5,578
9,055
(475)
(21)
8,559
31,239
8,747
(363)
43
153
-
(21)
8,559
ANNUAL REPORT 2023 113
Opening
Balance
$’000
Recognised
in income
$’000
Recognised
in equity
$’000
Closing
Balance
$’000
1,020
178
353
(344)
504
(24,465)
27,100
(1,718)
857
-
3,485
337
(33)
(375)
37
428
1,314
(1,571)
327
167
(157)
474
1,357
(266)
145
(22)
(307)
932
(23,151)
32
309
37
411
1,751
25,529
(1,819)
(1,391)
1,024
(157)
3,959
149
96
158
858
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
892
-
1,357
145
(22)
(307)
932
(23,151)
25,529
(1,391)
1,024
(157)
3,959
1,091
177
287
(270)
1,343
(21,400)
23,710
(1,242)
2,012
1
892
5,709
5.2 DEFERRED TAX
Deferred tax assets and liabilities are attributable to:
2022
Employee entitlements
Provision for impairment
Accruals / restructuring
Intangible assets
Property, plant and equipment
Right-of-use assets
Lease liabilitites
Finance lease receivables
Share schemes
Other
2023
Employee entitlements
Provision for impairment
Accruals / restructuring
Intangible assets
Property, plant and equipment
Right-of-use assets
Lease liabilitites
Finance lease receivables
Share schemes
Other
There are unrecognised tax losses of $1,881,808 (A$1,744,812) (2022: $1,860,736 (A$1,744,812)) in an
Australian subsidiary of the Company which have not been recognised as there is uncertainty as to their
future recoverability. The deferred tax asset on these losses was not offset against the deferred tax liabilities
of the rest of the Group because they are levied by a different tax authority.
114 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
Accounting policies
The tax expense for the year comprises current
and deferred tax. Tax is recognised in the income
statement, except to the extent that it relates
to items recognised in other comprehensive
income or directly in equity. In this case the tax is
also recognised in other comprehensive income
or directly in equity, respectively.
Assets and liabilities are offset when there is a
legally enforceable right to offset current tax
assets against current tax liabilities and when the
deferred income tax assets and liabilities relate
to income taxes levied by the same taxation
authority on either the same taxable entity
or different taxable entities where there is an
intention to settle the balances on a net basis.
Income tax
The current income tax charge is calculated
on the basis of the tax laws enacted or
substantively enacted at the balance sheet
date in the countries where the Company and
its subsidiaries operate and generate taxable
income. Management periodically evaluates
positions taken in tax returns with respect to
situations in which applicable tax regulation is
subject to interpretation. It establishes provision
where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred tax
Deferred tax is recognised, using the liability
method, on temporary differences arising
between the tax bases of assets and liabilities
and their carrying amounts in the consolidated
financial statements. However, deferred tax
liabilities are not recognised if they arise from
the initial recognition of goodwill; deferred
income tax is not accounted for if it arises from
initial recognition of an asset or liability in a
transaction other than a business combination
that at the time of the transaction affects neither
accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and
laws) that have been enacted or substantially
enacted by the balance sheet date and are
expected to apply when the related deferred
income tax asset is realised or the deferred
income tax liability is settled.
Assets are recognised only to the extent that
it is probable that future taxable profit will
be available against which the temporary
differences can be utilised.
Tax is provided on temporary differences arising
on investments in subsidiaries and associates,
except for tax liabilities where the timing of
the reversal of the temporary difference is
controlled by the Group and it is probable that
the temporary difference will not reverse in the
foreseeable future.
ANNUAL REPORT 2023 115
6.0 GROUP STRUCTURE AND INVESTMENTS IN OTHER ENTITIES
6.1
CONTROLLED ENTITIES
The consolidated financial statements incorporate the assets, liabilities and results of the subsidiaries listed
below. Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held
directly by the Group, and the proportion of ownership interest held equals the voting rights held by the
Group. All entities are incorporated in, and operate in, New Zealand and the ownership interest is 100%
unless otherwise stated.
Name of entity
Name of entity
NZME Advisory Limited
NZME Radio Investments Limited
NZME Australia Pty Limited A
NZME Radio Limited B
NZME Educational Media Limited
NZME Specialist Limited
NZME Holdings Limited
The Hive Online Limited
NZME Investments Limited
New Zealand Radio Network Limited
NZME Print Limited
The Radio Bureau Limited
NZME Publishing Limited
OneRoof Limited C
A Incorporated in, and operates in, Australia.
C The Group acquired the remaining 20% of the
B One "Kiwi Share" held by the Minister of Finance.
The rights and obligations are set out in the NZME
Radio constitution.
shares in OneRoof Limited resulting in the Group
holding 100% (2022: 80%). See note 6.1.1 for
further details.
116 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
6.1.1 Acquistion of OneRoof Limited's shares
On 18 August 2023 OneRoof Limited became a wholly owned subsidiary of the Group when the Group
acquired the remaining 20% of the shares in OneRoof Limited from Hougarden.com Limited for $2.1 million.
The terms of the purchase agreement included an immediate payment of $0.9 million with the remaining
amount of $1.2 million to be paid in three equal instalments of $0.4 million on 1 July 2024, 1 July 2025 and
1 July 2026.
At 31 December 2023 the consolidated financial statements for the Group contain the following items
relating to the acquisition:
Balance sheet
Current liabilities (Trade and other payables)
Non-current liabilities (Other payables)
Total liabilities included in the balance sheet
Consolidated Statement of cash flows
Payments to non-controlling interests A
Total included in net cash outflows from financing activities
A Includes legal costs incurred by the Group in relation to the process of acquiring the shares.
2023
$’000
376
676
1,052
(952)
(952)
Accounting policies
The Group controls an entity when the Group
is exposed to, or has rights to, variable returns
from its involvement with the entity and has the
ability to affect those returns through its power
to direct the activities of the entity. Subsidiaries
are fully consolidated from the date on which
control is transferred to the Group. They are de-
consolidated from the date that control ceases.
The acquisition method of accounting is used to
account for business combinations by the Group.
Intercompany transactions, balances and
unrealised gains on transactions between
Group companies are eliminated. Accounting
policies of subsidiaries have been changed
where necessary to ensure consistency with the
policies adopted by the Group. Non-controlling
interests in the results and equity of subsidiaries
are shown separately in the consolidated income
statement, statement of comprehensive income,
statement of changes in equity and balance
sheet respectively.
ANNUAL REPORT 2023 117
2023
Ownership
Interest
2022
Ownership
Interest
40%
40%
38.82%
38.82%
38%
21%
49%
38%
21%
49%
40.41%
40.41%
50%
50%
6.2 INTERESTS IN OTHER ENTITIES
6.2.1 Associates, joint ventures and joint operations
The Group has the following associates, joint ventures and joint operations:
Name of entity
Eveve New Zealand Limited A
New Zealand Press Association Limited A
Restaurant Hub Limited A
The Beacon Printing & Publishing Company Limited A
The Gisborne Herald Company Limited A
The Wairoa Star Limited A
The Radio Bureau B
A These entities are classified as joint ventures or associates and are accounted for using the equity method
in the consolidated financial statements.
B The Radio Bureau is classified as a joint operation and the Group has included its direct right to the assets,
liabilities, revenues and expenses of joint operations and its share of any jointly held or incurred assets,
liabilities, revenues and expenses in these consolidated financial statements.
118 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
Accounting policies
Associates
Associates are all entities over which the Group
has significant influence but not control or joint
control. Interests in associates are accounted
for in the consolidated financial statements
using the equity method (see below), after
initially being recognised at cost. The Group’s
investment in associates includes goodwill (net
of any accumulated impairment loss) identified
on acquisition.
Joint arrangements
Under NZ IFRS 11: Joint Arrangements
investments in joint arrangements are classified
as either joint operations or joint ventures. The
classification depends on the contractual rights
and obligations of each investor, rather than the
legal structure of the joint arrangement.
The Group recognises its direct right to the
assets, liabilities, revenues and expenses of
joint operations and its share of any jointly held
or incurred assets, liabilities, revenues and
expenses. These have been incorporated in the
consolidated financial statements under the
appropriate headings.
The Group's interests in joint ventures are
accounted for using the equity method (see
below) after initially being recognised at cost in
the consolidated balance sheet.
6.2.2 Equity accounted investments
As at 1 January
Share of operating losses
Dividends received
Asset revaluation (Wairoa Star)
As at 31 December
Equity method of accounting
Under the equity method of accounting, the
investments are initially recognised at cost and
adjusted thereafter to recognise the Group’s share
of the post-acquisition profits or losses of the
investee in profit or loss, and the Group’s share
of movements in other comprehensive income
of the investee in other comprehensive income.
Dividends received or receivable from associates
and joint ventures are recognised as a reduction in
the carrying amount of the investment.
When the Group’s share of losses in an equity-
accounted investment equals or exceeds
its interest in the entity, including any other
unsecured long-term receivables, the Group
does not recognise further losses, unless it has
incurred obligations or made payments on behalf
of the other entity.
Unrealised gains on transactions between the
Group and its associates and joint ventures
are eliminated to the extent of the Group’s
interest in these entities. Unrealised losses
are also eliminated unless the transaction
provides evidence of an impairment of the
asset transferred. Accounting policies of equity
accounted investees have been changed where
necessary to ensure consistency with the
policies adopted by the Group.
The carrying amount of equity-accounted
investments is tested for impairment whenever
events or changes in circumstances indicate that
the carrying amount may not be recoverable.
2023
$’000
3,443
(588)
(87)
-
2022
$’000
3,623
(156)
(75)
51
2,768
3,443
The equity accounted investments are not considered to be material to the Group's operations or results and
therefore no disclosures of the summarised financial information for these investments have been made.
ANNUAL REPORT 2023 119
7.0 RELATED PARTIES
7.1
KEY MANAGEMENT COMPENSATION
Note
2023
$’000
2022
$’000
Total remuneration for Directors and other key management
personnel:
Short term benefits
Post-employment benefits
Termination benefits
Dividends (relating to shares held in the Company during the year)
Share-based payments
4.2
5,403
5,953
123
335
211
341
6,413
159
-
212
1,683
8,007
The table above includes remuneration of the Board of Directors and the Executive Team, including amounts paid
to members of the Executive Team who left during the year. Where a staff member was acting in a position on the
Executive Team, that portion of their remuneration has been included in the table above. The 2022 comparative
has been reclassified to reflect the separation of post employment benefits from short term benefits.
7.2 OTHER TRANSACTIONS WITH RELATED PARTIES
The following table details the year end balances between the Group and its associates.
Balances with associates
Receivables
2023
$’000
2022
$’000
330
65
The following table details the transactions between the Group and its associates during the year.
Transactions with associates
Advertising revenue earned
Services provided by the Group
Paper usage reimbursed
Services received by the Group
2023
$’000
2022
$’000
33
731
-
(2)
25
98
46
(19)
120 NEW ZEALAND MEDIA AND ENTERTAINMENT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
8.0 COMMITMENTS AND CONTINGENT LIABILITIES
The Group is subject to litigation incidental to the
business, none of which is expected to be material.
9.0 SUBSEQUENT EVENTS
The Directors are not aware of any material events
subsequent to the balance sheet date.
ANNUAL REPORT 2023 121
Independent auditor’s report
To the shareholders of NZME Limited
Our opinion
In our opinion, the accompanying consolidated financial statements of NZME Limited (the Company),
including its subsidiaries (the Group), present fairly, in all material respects, the financial position of the
Group as at 31 December 2023, its financial performance and its cash flows for the year then ended in
accordance with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS)
and International Financial Reporting Standards Accounting Standards (IFRS Accounting Standards).
What we have audited
The Group's consolidated financial statements comprise:
●
●
●
●
●
●
the consolidated balance sheet as at 31 December 2023;
the consolidated income statement for the year then ended;
the consolidated statement of comprehensive income for the year then ended;
the consolidated statement of changes in equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, comprising material accounting policy
information and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the consolidated financial statements
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1 International
Code of Ethics for Assurance Practitioners (including International Independence Standards) (New
Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards Board and the
International Code of Ethics for Professional Accountants (including International Independence
Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code), and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
Our firm carries out other services for the Group in the areas of agreed upon procedures relating to the
benchmarking of market revenue data and non-audit assurance services relating to greenhouse gas
emissions. In addition, our firm, certain partners and employees may deal with the Group on normal
terms within the ordinary course of trading activities of the Group. The provision of these other
services and relationships have not impaired our independence as auditor of the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current year. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland 1142 New Zealand
T: +64 9 355 8000, www.pwc.co.nz
122 NEW ZEALAND MEDIA AND ENTERTAINMENT
Description of the key audit matter
How our audit addressed the key audit matter
Impairment assessment of indefinite
life intangible assets
As at 31 December 2023, the total
carrying amount of the Group’s indefinite
life intangible assets, comprising goodwill,
masthead brands and other brands (the
assets), amounts to $105.1 million.
Annual impairment testing is required
under NZ IFRS.
To assess the recoverable amount of
these assets, the Group prepared
discounted cash flow models on a
Value-In-Use (VIU) basis.
The CGUs identified are Audio, Publishing
and OneRoof. Assets have been allocated
to individual cash generating units
(CGUs), including indefinite life intangible
assets which have been allocated to
Audio and Publishing.
The impairment assessments are
considered a key audit matter due to the
significance of the carrying value of the
assets as well as the inherent judgements
involved in estimating forecast cash flows,
discount rates, and long-term growth
rates.
Key estimates and assumptions included
in the impairment assessment are:
● the expected future cash flows of
each CGU, which include estimates
and assumptions around revenue;
● discount rates; and
● long-term growth rates.
Based on the assumptions above, no
impairment of indefinite life intangible
assets has been recognised. However,
management identified sensitivities where
a reasonably possible change in the key
assumptions of the Publishing CGU may
result in the carrying amount exceeding its
recoverable amount.
Refer to note 3.1.1 of the consolidated
financial statements for further
information.
We performed the following audit procedures in
relation to the impairment assessment and key
management judgements:
● held discussions with management and
understood the processes undertaken and basis
for determining the key assumptions;
● evaluated the design of controls, determined if
they are designed effectively, and confirmed that
they have been implemented;
● considered the appropriateness of management’s
CGU assessment;
● considered the appropriateness of the basis of
allocation of assets and liabilities and the forecast
cash flows to the CGUs;
● considered the reasonableness of unallocated
costs and whether these should be allocated to a
CGU;
● gained an understanding of the forecast outlook
for the industry and the strategic direction of the
business; and
● performed our own sensitivity assessment on the
cash flow forecasts to determine whether
reasonably possible adverse changes in the key
assumptions would result in an impairment.
In relation to the recoverable amounts determined
using VIU, we:
● tested the mathematical accuracy of the VIU
calculations;
● compared the forecast cash flows used for 2024 to
the Board approved budget which is adjusted to
comply with NZ IAS 36 requirements;
● assessed and challenged the reasonableness of
the forecast cash flows used for 2025 to 2028,
including management’s estimates and
assumptions around forecast revenues, with
reference to historical performance and external
market evidence;
● engaged our auditor’s valuation expert to assist us
to assess and challenge the reasonableness of
the discount rates and terminal growth rates.
We also considered the appropriateness of
disclosures made including key assumptions and
sensitivities.
PwC
2
ANNUAL REPORT 2023 123
Our audit approach
Overview
Overall group materiality: $1,720,000, which represents 0.5% of total
revenue.
We chose total revenue as the benchmark because, in our view, it is
the benchmark against which the performance of the Group is most
commonly measured by users, and is a generally accepted benchmark.
In our judgement, revenue provides a more stable measure for
establishing our materiality benchmark and best reflects performance of
the Group. We chose 0.5% based on our professional judgement,
noting that it is also within the range of commonly accepted thresholds
for entities where revenue is considered the appropriate benchmark.
We performed a full scope audit over the consolidated information of
the Group
As reported above, we have one key audit matter, being:
●
Impairment assessment of indefinite life intangible assets
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the consolidated financial statements. In particular, we considered where
management made subjective judgements; for example, in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of management override of internal controls, including among
other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate, on the consolidated financial statements as a whole.
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion
on the consolidated financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industry in which the Group operates.
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual report, but does not include the consolidated financial statements
and our auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of audit opinion or assurance conclusion thereon.
PwC
3
124 NEW ZEALAND MEDIA AND ENTERTAINMENT
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work we have performed on the other information
that we obtained prior to the date of this auditor’s report, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS Accounting Standards,
and for such internal control as the Directors determine is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (NZ) and ISAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located at the External Reporting Board’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Lisa Crooke.
For and on behalf of
Chartered Accountants
20 February 2024
Auckland
PwC
4
ANNUAL REPORT 2023 125
126 NEW ZEALAND MEDIA AND ENTERTAINMENT
Registered Address
NZME Limited
2 Graham St
Auckland 1010
New Zealand
Registred Office Contact Details
Postal Address: Private Bag 92198
Victoria St West
Auckland 1142
New Zealand
Share Registry Contact Details
Postal Address: PO Box 91976
Auckland 1142
Street Address: Level 30 PwC Tower
15 Customs Street West
Auckland
Phone: +64 9 375 5998
Website: www.linkmarketservices.co.nz
Email: enquiries@linkmarketservices.co.nz
Phone: +64 9 379 5050
Website: www.nzme.co.nz
Email: Investor_Relations@nzme.co.nz
Auditors
PricewaterhouseCoopers
Principal Bankers
Westpac
Principal Solicitors
Bell Gully
Share Registry
Link Market Services
DIR E C T O R Y
ANNUAL REPORT 2023 127
DIR E C T O R Y
TUKUTUKU KŌREROEducation Gazette NEW ZEALAND