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NZME Limited (NZM) is involved in the operation of an integrated media and entertainment business. The organisation with a portfolio of radio, digital & e-commerce and print brands producing content, targeting New Zealand audiences.
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Mr Michael Boggs
What does NZME Limited (NZM) do?
NZME Limited, or New Zealand Media and Entertainment, is a dominant media force in New Zealand with a 37.4% market share of radio and a 55.6% market share of print.
Founded in 2001 and based in Auckland, the company is an integrated media and entertainment business active on traditional and digital channels.
NZME owns 10 audio brands including Newstalk ZB, ZM and Coast, 32 print publications including The New Zealand Herald, Business Desk and OneRoof and a handful of websites including The New Zealand Herald, OneRoof, Restaurant Hub and Driven.
How does NZME make money?
NZME earns revenue through multiple streams. The company reports all earnings in one business segment called “Integrated Media and Entertainment.”
The most prominent streams are as follows:
Advertising — NZME provides advertising services on multiple platforms including print, radio and/or digital, as well as experiential campaigns, competitions, product sampling and even street performances.
Subscriptions — NZME enters contracts with customers to deliver publications on specific days.
Circulation — NZME delivers specific publications on specific days, for these to be on-sold to the public.
External printing and distribution — NZME contracts with third parties to print and distribute publications on their behalf.
e-Commerce — prior to October 2021, NZME acted as an agent for merchants selling products or services using GrabOne. NZME sold GrabOne and its assets to Global Marketplace New Zealand for A$1.6 million of cash in October 2021.
NZME also earns revenue through back-office support services and Government grants.
Is NZME Limited a profitable company?
Since going public, NZME’s revenue has fluctuated between A$404.8m (FY2015) and A$300m (FY2020). The company’s revenue has never surpassed FY2015’s results.
NZME has also proven to be an expensive business to run, with the company’s net income relatively low or even negative each financial year. In FY2019, NZME earned a negative net income of A$158.04. Net income rose back into positive territory in FY2020 and FY2021 with A$13.57m and A$32.65m, respectively.
NZME has A$13.5m of net cash on its books.
Is NZM stock a buy?
Some investors are bullish as NZME announced a share buyback program on 17 December 2021. The company also signed a letter of intent to supply Google’s News Showcase with news content on 25 March 2022. As icing on the cake, NZME entered commercial discussions with Meta Platforms to help with digital transformation projects around the same time.
As always, some investors aren’t as excited, citing historically weak financial performance and the possibility that deals with Google and Meta may fall through.
Who owns NZM stock?
Most of NZM’s biggest owners are institutional, holding 49% of the total float.
These institutions include Osmium Partners (15.57%), UBS Asset Management (13.49%), Auscap Asset Management (12.97%), Spheria Asset Management (10%), Repertoire Partners (6.41%) and Telstra Super (4.98%).
CEO Michael Boggs owns 0.55% of the company.
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This does not constitute financial advice. You should do your own research before making an investment decision. Past performance is not a reliable indication of future performance. No representation is made as to the timeliness, reliability, accuracy or completeness of the market data provided.