NZME Limited (NZM) Earnings Call Transcript & Summary

Hello, and welcome to NZME's 2020 Annual Shareholders Meeting. For those of you that don't know me, my name is Carol Campbell, I'm Independent Director and Chair of the Audit and Risk Committee. I'll be chairing the meeting today following Peter Cullinane's resignation as per the NZX announcement earlier today. For those of you who haven't read it yet, I'll now take you through it. NZME announces that Peter Cullinane has today resigned as Chair of -- and Director of the Board of NZME. Independent Director and Chair of the Audit and Risk Committee, Carol Campbell, will act as Chair of the Annual Shareholders Meeting, which will commence at 3 p.m. New Zealand time, as previously announced. The directors will discuss a new chair for the company at a Board meeting next week. An announcement regarding NZME's new chair will be made after that. The Board thanks Peter for his service and wishes him well with his future endeavors. The Board would like to reiterate its confidence in NZME's CEO, Michael Boggs, and his executive team. Michael has led the business through an incredibly challenging time, including the crisis phase of COVID-19. There will be time during general business for any questions in relation to this later in the meeting. So it's great that New Zealand has moved out of the previous lockdowns into COVID 1. And now unfortunately, for us, we were unable to have a physical meeting. There just wasn't sufficient time to put it together. I'm used to having your smiling faces looking at me. However, I've got a team of cameraman and the auditors and the lawyers. So I do look forward to catching up with you at the next shareholders' meeting because it's actually a time for the Board to have a cup of tea with you and discuss your issues and your concerns for the company and assist us in looking after your interests. This format is new to many of you as it is to us. And I'm going to provide further instructions as we progress through the meeting. If you encounter any issues, please refer to the virtual meeting online portal guide or you can find the help line on 0800 200 220. Before we commence the formalities, I'd like to introduce those with me today. Starting with my far left, my Board member, Sussan Turner, David Gibson, and Barbara Chapman. From my immediate right, our Chief Executive, Michael Boggs; General Counsel and Company, Secretary Allison Whitney; and our Chief Financial Officer, David Mackrell. Oops, Allison hasn't arrived yet. So she will be on her way. She's busy during secretarial businesses for us. Our legal advisers, Chapman Tripp, and our auditors, PwC, are also with us today. As I told you, they're our audience. The company secretary has confirmed to me that the Notice of Meeting has been sent to shareholders and other persons entitled to receive it. The company's constitution prescribes a quorum of 3 shareholders, and this requirement has been met. Therefore, I now declare this meeting open. Voting on all resolutions will be conducted by way of a digital poll. Shareholders can cast their vote using the electronic voting card received when online registration is validated. Questions will be taken online through the virtual meeting website, and I encourage shareholders who have questions to send their questions through as soon as possible. Proxies have been appointed for the purposes of this meeting in respect of approximately 129.1 million shares, being 65.69% of the issued capital. The financial statements for the 12-month period to 31 of December 2019, together with the auditor's report, are set out in the company's annual report, which has previously been distributed to shareholders. We will address any questions on the financial statements and general business section at the end of this meeting. There will also be a recording of today's meeting made available on our website at nzme.co.nz following the conclusion of the meeting. Following my opening address, we will hear from NZME's CEO, Michael Boggs. We will then proceed to voting on the resolutions as set out in the Notice of Meeting you'll have received, and we're proceeding on the basis that these have been read. Finally, we'll turn to the general business section of the meeting. So firstly, to my address. Shareholder value creation is an issue many businesses are facing, so NZME is not alone in this. It's been disappointing to see significant shareholder value declines across total New Zealand media market and in NZME's share price specifically. Today, I'll discuss with you several areas that we, as a Board, are focused on to build shareholder value. They are: NZME participating in market consolidation, cost management and efficiency, building top line revenue performance and growth, prudent capital management and dividend policy, reviewing Board and management expertise, improving communications with our shareholders and effectively managing the impacts of COVID-19 and government support. Let me talk to each of these specifically. Participating in market consolidation. As we've stated, given the current economic conditions, there is significant value to be gained through market consolidation. NZME is well placed to take advantage of market consolidation in a way that both protects New Zealanders' access to news and entertainment and grow shareholder value. NZME plans to continue to explore options to work with Stuff, but in the meantime, we'll compete vigorously with Stuff in competitive market we operate in as we have done for many years. The main competitive threat to NZME are the search and social media giants, including Facebook and Google. While NZME is pleased to see regulatory developments in Australia in this area and is hopeful the New Zealand government will follow suit, it's no secret that the digital advertising market share of these global giants in New Zealand continues to increase. As you'll know, Bauer Media abruptly closed. NZME has moved quickly to take advantage of the opportunities this has created by rapidly introducing OneRoof local publications in key markets in Auckland, expanding NZME's real estate offering in bundles across print and digital. Cost management and efficiency. NZME's focus on cost management and efficiency across the business has been relentless through the years. As already discussed, NZME has a number -- made a number of reductions, including the loss of more than 200 roles, representing 14% of NZME's workforce, temporary salary reductions of 15% for most of NZME's people and a 20% reduction for your Board and Chief Executive Officer. Combining these with further cost-out initiatives that have been taken accelerated the cost-out trajectory. Building top line revenue performance and growth. Turning now to revenue performance and growth. NZME was demerged from APN Australia, now HT&E, in June 2016. Since the demerger, we have focused on 3 key strategic priorities: Firstly, leading the future of news and journalism in New Zealand; secondly, growing radio and leading digital and audio -- digital audio; and creating New Zealand's leading real estate platform. Michael will take you through these later. Prudent capital management and dividend policy. At its demerger from APN, NZME was set up with a debt position and dividend policy that was unsustainable over the medium term. While the Board wishes to pay dividends on a regular basis, it needed to make a trade-off between the level of debt, the level of dividends and the ability to refinance into the future. As you know, this resulted in the cessation of the dividends for now. This has seen NZME's peak debt reduce from $115 million to $75 million at 31st of December 2019. We are pleased to have reduced this further to $62 million at 31st of May, 2020. As announced last week, NZME has agreed terms to extend its existing debt facilities to 1 July 2023. The new term of the bank facilities provides the company with certainty of funding for the next 3 years. As with previous facilities, the new $110 million facilities will step down each year to a level of $75 million at 31 December 2022. This provides significant headroom over the net debt position of $62 million as at 31st of May 2020 and aligns with the Board's focus of overall debt reduction. While further debt reduction is required, the Board fully supports the return to paying dividends as soon as possible after 1 July 2021. The Board is keenly aware that many shareholders value dividends and have been disappointed no distributions as we reduce debt. NZME firmly believes that debt reduction must remain the first priority and that policy has put NZME in a strong position to weather the COVID storm as well as strengthened its ability to take advantage of inevitable market consolidation. Another -- a number of other NZX-listed corporates have raised discounted equity during the COVID-19 shutdown period. NZME has not been one of them and currently has no requirement into the foreseeable future. Reviewing Board and management expertise. Looking now at your Board and management teams. The New Zealand media environment has been regarded as one of the most, if not the most, competitive in the world and NZME has performed well relative to its peers in the market. I'd like to acknowledge Barbara, David and Sussan for the ongoing diligence and expertise. The Board has a balanced mix of expertise and skills highly relevant to the NZME business and strategy. With Peter Cullinane's resignation today, the Board will be meeting next week to discuss a new chair for the company. An announcement regarding NZME's new chair will be made after that. Management. During 2019, there was some changes to the executive team designed to ensure NZME senior leadership retains the most appropriate skills and experience and it remains responsive to effectively deliver on our strategic priorities. At the end of 2019, we welcomed Wendy Palmer to the NZME executive as Chief Radio and Commercial Officer and appointed Paul Hancox as a member of the executive team as Chief Revenue Officer. Both Paul and Wendy are incredibly experienced media executives with a deep and proven understanding of the commercial business strategies required to connect content and audiences with commercial partners. Wendy's most recent executive experience as CEO of MediaWorks Radio supports one of our key strategic priorities. The Board would like to reiterate its confidence in NZME's CEO, Michael Boggs, and the executive team. Michael has led the business through an incredibly challenging time, including the crisis phase of COVID-19. Improving communication with our shareholders. Over the last year, the market has changed, and that there is now only 1 New Zealand analyst covering NZME and this limits the amount of communication and analysis on NZME's performance and valuation. The Board acknowledges that shareholders are wanting more information and insight regarding the corporate strategy in the future of NZME. The Board also recognizes the importance of regular communication and engagement with shareholders. Given this, the Board and management have resolved to increase the detail and frequency of shareholder communication. In addition, the Board values further engagement with shareholders to understand their perspective on shareholder value creation. Effectively managing the impacts of COVID-19 and government support. The impacts of COVID-19 have been significant. The executive team took swift action to protect profitability and shareholder value, placing NZME in a relatively strong position as it moves out of the crisis phase and into the rebuild phase. It's ironic that while NZME was deemed an essential service, the revenue required to support delivering that essential service reduced significantly. Not only that, the number of New Zealanders turning to NZME to consume that essential service lifted to record levels. NZME's received government support through a wave subsidy of approximately $9 million received in April 2020 and a tranche one media support package. A second tranche of support has been flagged by the government with the intention that it supports a sustainable media environment in New Zealand. Government has signaled that it wants to ensure a strong commercial media sector, and it may provide further financial support. The government support and focus on New Zealand media players is welcomed. We're confident our focus in these 7 areas and that we will increase shareholder value. Our purpose and sustainability commitment. Supporting these 7 areas of focus on shareholder value creation is NZME's purpose of keeping Kiwis in the know and our sustainability commitment. The worldwide COVID-19 pandemic brought home to me just how relevant NZME's purpose is to our business, our people and our audiences. In face of such uncertainty and anxiety, our communities value information they can trust. The responsibility our people have to keep Kiwis in the know will really be as important as it has been over the past couple of months. This is reflected in the high levels of engagement we are seeing across NZME brands. Nzherald.co.nz had almost 3 full months of more than 1 million visits a day, resulting in NZME getting up to 2.5 million a day at the peak of the crisis. Newstalk ZB streams on iHeartRadio doubled during the lead up to the lockdown period. New Zealanders have needed all the information they can get across to, and I'm proud of the way all the teams across NZME have delivered on our purpose. We are pleased with the work that's gone into champion our sustainability commitment that focuses on our communities, our people and our environment. An effective, sustainable and measurable commitment is now a key requirement for responsible forward-looking businesses and supports financial performance. On behalf of myself and the Board, I'd like to thank and congratulate Michael and his team for the bold and decisive leadership that is seeing us deliver on our strategy and excel through the crisis phase of COVID-19 and beyond. I'll now hand over to Michael to discuss NZME's strategic priorities and performance.

Well, thank you, Carol, and welcome to everyone joining us live here today and online. Before I discuss our progress against the 3 strategic priorities for 2020, let me take you through an overview of our 2019 annual results. I don't propose to go through all of the numbers on this slide, but would observe that operating revenue of $371.7 million reflects the strong momentum in our 3 strategic priorities. I'd also like to point out that the 2018 year include an extra trading week. On a comparable basis, 2019 operating EBITDA was down 5% on the full year, but in the second half, it grew 4%. Contributing to this was our continued focus on our cost base, resulting in a reduction of 4% compared to the prior year. Operating net profit after tax was up 4% on the prior year. You'll see we have reported a statutory net loss after tax, impacted by an impairment to our intangible assets of $175 million in the year. This impairment relates to intangible assets, which were the result of historic transactions, which occurred prior to the demerger. This is an accounting charge only, with no impact on cash flows and no impact on bank covenants. As noted earlier, our ongoing focus on capital management resulted in a $23.6 million reduction in our net debt, taking it to $74.7 million. As reported back in February, New Zealanders are engaging with our major brands across print, radio and digital platforms. Through our 32 print publications, 8 radio networks and our multiple digital platforms, NZME reaches 3.3 million New Zealanders. The New Zealand Herald is the powerhouse of our newspaper portfolio. It's read by 1.2 million Kiwis every week. Radio has a host of brands dominating their target demographics, such as Newstalk ZB or ZM. They reach 2 million listeners each week. And we have 2.6 million users engaging with our digital platforms every month. So let me now take you through our strategic priorities. Put simply, the results in terms of revenue, audience, engagement and targets set and met show our strategy is working. We have made pleasing progress across all of our 3 strategic priorities, and we believe a continued focus in these areas is the best approach to increasing shareholder value. In 2019, NZME took a market-leading initiative and launched New Zealand Herald Premium. It has been lauded as the most ambitious move in media last year. I'm pleased to tell you today that New Zealand Herald Premium now has 70,000 subscribers. This includes over 36,000 paid digital subscribers, that's up 70% in just 4 months, and 34,000 eligible print subscribers who have activated their digital subscription as part of their print bundle package. New Zealand Herald Premium has proven that New Zealanders will pay for high-quality content. We take to heart that, in fact, over 25% of our premium subscribers are on annual subscriptions. 2020 will continue to see us focus on growing our digital premium content and subscriptions and increasing our digital advertising revenues. One of the initiatives supporting this is the launch of our New Herald app. The new app has a focus on improving the user experience, that enhances user options to personalize what they see and how they use it. But importantly, with the enhancements that have been released in just the last 2 weeks, the new app also allows users to subscribe to premium directly from the app. And as all app users will now see premium content on their mobile devices, they can see what they've been missing out on. We know from overseas experience that we can expect to see a further acceleration in subscription growth as a result of this app update. We are also upweighting our focus on premium business content. We know that business stories are a great driver of digital subscriptions, so we've directed some senior editorial attention to the New Zealand Herald business team. We'll see more exclusive stories, more insightful analysis and opinion, and they'll be sitting within our premium. And again, we expect this to drive new subscriptions. Compared to the last available Australian publisher figures, New Zealanders are still enamored with print products. Our New Zealand Herald has a daily print circulation still larger than any of the quality Australian newspapers, such as The Age, the Sydney Morning Herald, The Australian and The Financial Review, notwithstanding the fact that New Zealand is 1/5 of Australia's population. However, as I noted above, in just 13 months, NZME has added over 36,000 paying digital subscribers and has a further 34,000, who are subscribed as part of the print subscription with NZME. We feel that the available headroom, given Australian examples, is still enormous for our iconic national digital brand, the New Zealand Herald. I'd like to highlight the success of the New Zealand Herald teams at the 2020 New Zealand Voyager Media Awards announced just this month -- last month, sorry. The New Zealand Herald claimed the 3 biggest prizes: Newspaper of the Year, Website of the Year and Best News Website or App. There were many more individual awards as well. In addition, NZME has just been awarded the best global media brand in Asia Pacific for the second year running. As Carol has mentioned, ours is an incredibly competitive industry and especially so in the world of news and information. This recognition is fiercely fought for and justly deserved by our NZME team. I'm also pleased with the results that our radio teams delivered in 2019. The 5% radio growth in the second half of 2019 had contributed to full year growth of 2%, which is very encouraging. Radio advertising revenues continue to grow to be larger than the print advertising revenues last year, the first time that this has been the case. As Carol mentioned, we welcomed Wendy Palmer to the NZME executive as our Chief Radio and Commercial Officer, and we appointed Paul Hancox as a member of the executive team as Chief Revenue Officer. The combined approach of improving our sales capability and sales technology with on-air talent acquisitions to build our audience engagement, this helped drive revenue growth across the year, including growth in radio revenue and growth in radio audience market share. We have seen further revenue share growth in 2020. Our tactical plans to grow our revenue at the expense of our competitors saw us in February announce the reorganization of some of our hosting lineups on 2 of our major brands. The moves are part of a strategic review of our radio networks. They are ensuring we are delivering the best content for our audiences and providing the best opportunities for our commercial partners to connect with those audiences. We have further tactics from the strategy that will be completed this month. We've also seen growth in iHeartRadio. Increased registered users are now over 1 million and increased average monthly listening hours resulted in a 40% increase in revenue from iHeartRadio last year, that now makes up approximately 2% of our radio revenue. We also recorded significant news-focused audience growth in iHeartRadio during the COVID-19 crisis, with Newstalk ZB's iHeartRadio audience doubling at points during the lockdown. This has supported the further 21% increase in average monthly listening hours that we've seen so far in 2020. We continue to make significant progress with OneRoof and have a strong focus for 2020. Along with the rest of New Zealand, we are keenly observing the New Zealand property market for signs of the COVID-19 impacts. I'm pleased to share with you today that OneRoof now has all of New Zealand's leading real estate companies' listings on the platform. Importantly, OneRoof can now proudly claim to have more for-sale listings in Auckland than any other property portal. Both of these milestones have been key goals for this year. Last year, OneRoof delivered revenue of $2.8 million, that was up from just $700,000 in 2018. 2019 saw higher incremental direct costs for OneRoof compared to 2018 because 2019 represented a full year of costs. Our focus in 2020 is to continue to improve audience engagement through growth in listings and content, to increase revenue from agents and to grow overall OneRoof revenue and contribution. Over 70% of OneRoof's revenues in 2020 have been generated from vendor listing upgrades. And as Carol mentioned earlier, we have launched a number of OneRoof local print publications in Auckland to fill a gap that was left by the exit of Bauer. At the recent INMA Awards, the International News Media Association, OneRoof was awarded 2nd place globally for the best idea to acquire or retain advertising clients. As I reflect on the tumultuous past few months, I'll comment that 2020 started with strong momentum, driven by continued growth in Radio, OneRoof and Premium subscriptions. As we have reported, COVID-19 had a significant impact on advertising revenue. April 2020 advertising revenues were around 40% lower than April 2019, and May 2020 was 39% lower than last year. Pleasingly, we have seen increased advertiser activity over the last 2 weeks, and we anticipate that June 2020 advertising revenues will be around 30% lower than 2019. Costs, including the temporary salary reductions, are currently tracking 25% below the 2019 levels for quarter 2 of this year. And significant cost reductions on last year will continue. In addition, we have received a $9 million government wage subsidy. It's impossible to predict with any accuracy the impact of the pandemic on NZME's full year financial performance. However, we do expect the first half 2020 operating EBITDA, and including the wage subsidy, to be higher than that achieved in the first half of 2019. Finally, I'd like to comment about the culture and the spirit of NZME, especially during the COVID-19 crisis. Jobs were lost. Pay cuts were taken. Roles and functions were disrupted. This was at the same time as people were grappling with uncertainty and worried about their ability to keep themselves and their families safe and well. While all this was going on, our people had an essential job to do. They had to keep Kiwis in the know. In addition, the salary reductions of 15% taken by nearly all NZME employees right across the country demonstrates the passion and the dedication they have for your company. I was humbled by the graciousness and the understanding of those that had to leave us recently during this crisis. As noted, we have a passionate team at NZME, with 92% of employees providing feedback in the staff engagement survey last year, and this continues to see our overall employment engagement increase year-on-year. I'm incredibly proud, as I hope you are, of the people in our business who have delivered for their communities and have delivered for New Zealand. I'll now hand back to Carol.

Thank you, Michael. We now come to the formal part of the meeting, the matters requiring resolution, which are outlined in the Notice of Meeting. Given Peter's resignation, we will no longer be voting on resolution 1. You may ask questions on each matter being put to the shareholders through the virtual meeting website. I will call a poll in respect of all of these resolutions. We will be voting on 3 ordinary resolutions initiated by way of shareholder proposal. As noted in the Notice of Meeting, the Board does not support these 3 proposals. In regards to the shareholder proposal calling for the breakup of the company, I would note the significant synergy benefit from an audience, revenue and cost perspective by having complementary assets across print, radio and digital. News teams are highly integrated, delivering audience and cost benefits across New Zealand Herald and Newstalk ZB. Commercial sales teams are integrated, ensuring audience solutions operate across platforms and allow NZME to gain revenue share above its underlying audience share. However, should a party be interested in specific NZME assets or platforms, NZME would, of course, consider any proposal put to it, and in assessing that proposal, will consider any resulting loss of synergies from any changes to the business model. In regards to the shareholder proposal calling for the Board to recognize the importance of dividend payments, as already noted, while the Board wishes to pay dividends on a regular basis, it needed to be -- needed to make a trade-off between the level of debt, the level of dividends and the ability to refinance into the future. The capital management and dividend policy has also put NZME in a strong position to weather the COVID-19 storm without needing to raise equity. It is the Board's intention to return to paying dividends as soon as possible after June 2021. Finally, in relation to the shareholders' proposal regarding Stuff. There would have been significant benefits to acquiring Stuff for NZME, and its shareholders and its purchase would have been transformational for NZME's Stuff New Zealand and overall shareholder value creation. NZME remains well placed to take advantage of market consolidation into the future. As I explained at the beginning of our meeting, shareholders will be able to cast their votes using the electronic voting card received when your online registration is validated. To vote, you'll need to click getting voting card when in the online meeting platform. You'll then be asked to enter your shareholder or proxy number to validate. Please then mark your voting card in the way you wish to vote by clicking for, against or abstain on the voting card. Once you've made your selection, please click submit vote on the bottom of the card to lodge your vote. Voting will remain open until 5 minutes after the conclusion of the meeting, and the results of the vote will be announced by the exchange. If you require any assistance, please refer to the virtual meeting online portal guide or use the helpline, 0800 200 220. Each of the resolutions set out in the Notice of Meeting are to be considered as an ordinary resolution, and as such, must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on the resolution. Firstly, let's move to resolution 2. This resolution concerns the reelection of Barbara as a Director of NZME, having retired and now standing for reelection. The Board recommends Barbara to you as an NZME director and unanimously supports her reelection. Barbara will now say a few words in support of her reelection.

Thank you very much, Carol. And at the outset, Carol, I'd like to acknowledge you stepping up on behalf of your peers on the Board today. We really appreciate you doing that. Shareholders, thank you for the opportunity to address you as I present myself for reelection at our 2020 ASM. I've been on the NZME Board as an independent director since April 2018 and look forward to your continued support to carry on in my governance role of this company. The media sector globally faces significant challenges. And as Carol pointed out, the New Zealand media landscape is experiencing major disruption. The playing field we operate in feels to me more like a BMX track than a rugby pitch. While this market context will be well understood by you all, our imperative as your representatives is to drive a strategy that enables us to compete strongly, to operate with urgency, to execute well, to provide value to our customers, so in turn, we can provide value to you, our shareholders, and to earn your support. You should rightly challenge what every director brings to the table of your company. In my 2 years on the Board and by virtue of my previous experience as the CEO of ASB, my focus has been on strong capital management, challenging our revenue and cost performance, prioritizing our digital agenda, and developing our corporate social responsibility strategy. Progress has been made in each of these areas, and it is pleasing to see momentum building. But in each of these areas, a lot more work needs to be done, and if reelected, I will continue this focus. Broadcasting and media in New Zealand is undoubtedly a sector operating on an uneven playing field in facing severe disruption. But experience has taught me that culture is a critical element in the performance and the success of any business. We need and we are building the strongest team to best position us to deliver to your expectations. This includes having a strong Board with the time, skills, risk appetite and focus to focus on the complexities in our sector. And I'm proud to work alongside my fellow directors and devote the time required to effectively govern this organization. Thank you for your support of my reelection.

Thank you, Barbara. I now move as an ordinary resolution that Barbara Chapman, who stands for reelection before the end of her term and is eligible for reelection, be reelected as a director of NZME. Before we move to the vote, are there any questions for the Board concerning the resolution? There are no questions on this matter from shareholders joining online. Thank you. Please now select either for, against or abstain for resolution 2 on your voting card. [Voting]

We now turn to resolution 3, the matter relating to the company's auditors. The motions concern the fixing of the auditor's remuneration and seeks shareholder approval that directors be authorized to fix the auditor's remuneration. Before we move to the vote, are there any questions for the Board concerning this resolution? There are no questions on this matter from the shareholders joining online. Thank you. Please now select for either for, against or abstain for resolution 3. [Voting]

We now turn the matter relating to the first shareholder proposal received from Mr. Parker. The motion concerns a shareholder proposal that the directors instigate a plan to break up the company so as to realize the commercial values of Masthead brands and encourage an ethos of shareholder wealth creation in the endeavors that make up NZME. Given the advantage of a diversified business and navigating the current economic environment and for other reasons outlined in the Notice of Meeting, this resolution is not supported by your Board. Before we move to the vote, are there any questions for the Board concerning the resolutions? There are no questions on this matter from shareholders joining online. Thank you. Please now select either for, against or abstained for resolution 4 on your voting card. [Voting]

Resolution 5. We now turn to the matter relating to the second shareholder proposal received from Mr. Parker. The motion concerns the shareholder proposal that the directors acknowledge the importance of dividend income to shareholders and that there may be a more appropriate dividend policy. In the current environment, the Board believes that the capital management policy is the very reason NZME has been able to weather the COVID-19 storm as well as it has. For this reason and for other reasons outlined on the Notice of Meeting, this resolution is not supported by your Board. Before we move to the vote, are there any questions for the Board concerning the resolution? There are no questions on this matter from shareholders joining online. Please now select either for, against or abstain in relation to resolution 5 on your voting card. [Voting]

Resolution 6. We now turn to the matter relating to shareholder proposal received from Mr. Zingel. The motion concerns a shareholder proposal that the directors obtain the approval of shareholders before they proceed with any action costing more than $1 million, including legal fees to acquire Stuff. Given the current circumstances and for the reasons outlined in the Notice of Meeting, this resolution is not supported by your Board. Before we make a move to the vote, are there any questions for the Board concerning the resolution? There are no questions on this matter from shareholders joining online. Please now select either for, against or abstain for resolution 6 on your voting card. [Voting]

Collection of voting cards. You should now submit your vote. Voting will be open until the close of the meeting. Results of the poll will be announced on the NZX and ASX after the conclusion of the meeting. General business and shareholder discussion. I would now like to give shareholders the opportunity to ask questions. Any questions must be related to today's presentation, the financial statements or the management of the company. You can continue to provide questions online, and we will also address questions already submitted online. We'll allow 20 minutes for questions. And if we run short of time and are unable to answer your question online, we would endeavor to respond to you after the meeting.

We have received 2 shareholder questions in advance of the meeting, both are from Timothy and [ Hunter ]. They have asked, how much has NZME spent in fees to external parties such as lawyers and advisers on trying to buy Stuff? All the prior year amounts are included in the financial statements to date and have already been disclosed. But I can advise you that since discussion started in August last year, we've spent around $1.8 million. But this should be seen in context of the potential synergies that the purchase may have realized, which is estimated to be in the tens of millions of dollars per annum. The second question from the same people was will the Board now rule out trying to buy Stuff? And as I've noticed -- noted, there will be significant market uncertainty with regards to the media market, and we will continue as a Board and management to assess market opportunities as they present themselves. So now we're open to receiving questions from you, our shareholders. What I'll do is as the questions come through the mediators, I will end up saying the question and then either I will direct it to management or to one of the directors to answer. Are there any questions? There are no questions. So in closing, I'd like to thank Peter for his service and wish him well for his future endeavors. On behalf of the Board and NZME executive team, I'd like to thank you for attending our virtual -- first virtual annual shareholders' meeting today. Your participation and feedback is greatly valued. As always, we remain focused on the pursuit of improved and sustainable returns for you, our shareholders. We strive to ensure NZME is a great and safe place for our employees to work and the best place for our audiences to be informed and entertained. Thank you, again, to my fellow Board members and executives and employees for their dedication and hard work and to you, our shareholders, for your continued support. And hopefully, we will all meet again at the shareholders' meeting next year. I'll now declare the meeting closed.