NZME Limited (NZM) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to New Zealand Media and Entertainment's 2021 Annual Results Webcast. My name is Suha Park, Investor Relations Manager at NZME. Presenting on the call today will be NZME's Chief Executive Officer, Michael Boggs; and NZME's Chief Financial Officer, David Mackrell. [Operator Instructions] I will now hand you over to our CEO, Michael Boggs.

Thanks, Suha, and good morning, everyone. Thanks for joining us for NZME's 2021 annual results briefing. If you're on the webcast, you'll be able to follow us, as we take you through the presentation pack that's on the screen. I'll initially take you through our results summary, I'll update you on the impacts of the COVID-19 restrictions on our advertising revenue in 2021. I'll then take you through our strategic priorities, market performance and then the performance of each of NZME's divisions. I'll then hand over to David, who will take you through the financial results. I'll then return to share our view on our outlook for 2022, and David and myself will be available to take your questions at the end. I'm pleased about [ our ] highlight earnings growth, the elimination of debt and on the balance sheet, a significant final dividend for the year. On Page 3, you'll see our 2021 results summary. You'll see that despite the continued impact of COVID-19 on demand during the year, our operating revenue grew 5% to $349.2 million. Our operating EBITDA was $66 million. This is in line with last year after adjusting for the impact of the change in accounting treatment of Software-as-a-Service configuration costs. Dave will talk about this a little bit later. Net profit after tax was $34.4 million, which was $19.9 million higher than last year after including the gain on sale of GrabOne of $15.4 million. And pleasingly, our operating NPAT was 6% higher than last year at $23.6 million. As you'll note, our balance sheet has significantly strengthened, and we closed the year with a net cash position of $13.5 million. That's an improvement of $47.4 million on the net debt position that we had at the end of 2020. Given the significant progress made with revenue and profitability growth and a positive improvement in the debt position, the NZME Board has declared a fully-imputed and fully-franked final dividend of $0.05 per share. This brings the total dividend for the year up to $0.08 per share. I'm really delighted that we made significant progress across each of the 3 strategic pillars of Audio, Publishing and OneRoof during the year. You'll see the highlights on the left-hand side of the page, and these include a 37% growth in total digital revenue, highlighting the progress being made on our digital transformation. Our audience continues to grow with our radio audience market share 1.8 percentage points higher than last year. Digital subscriber growth momentum has ensured that our total subscriber base has grown to 191,000 with our digital-only subscribers, up 54% to 83,000. That's a growth of 30,000 during the year. And OneRoof, our real estate business, grew digital revenue by 90%, demonstrating its potential as a classified real estate platform. This result demonstrates the strength of our business, as it continue to deliver improved outcomes, and we progressed our strategic initiatives during what's been another difficult operating environment in 2021. Let me now take you to Page 4. This graph shows the monthly advertising revenue over the last 3 years, identifying the months that have been impacted by COVID restrictions during the last 2 years. Our objective has been to return advertising revenues to the pre-COVID 2019 levels. These are the light bars on the chart. In the first half of 2021, this was progressing well and actually saw June 2021 ahead of June 2019. However, as you all know, COVID-19 restrictions were reintroduced in August of 2021. This means that our Q3 2021 advertising revenue was down 11.7% on Q3 2019. When the restrictions were lifted later in the year, a stronger November and December performance ensured that the second half of 2021 was only 4.3% down on the 2019 levels, excellent growth in that last quarter. We're currently in the early days of our Omicron outbreak, and therefore, we remain cautious at this time. We'll come back to that a little bit later. I'll now cover our strategic priorities and our performance in the context of the overall market performance. Firstly, it's useful to briefly recap on our strategic priorities. You can see our guiding principles across the top of Page 6. These principles guide each of our strategic priorities. These priorities are, firstly, to be New Zealand's leading audio company. Secondly, for the New Zealand Herald to become New Zealand's Herald; and finally, for OneRoof to become your complete property destination. As you'll see, we have key pillars of delivery under each priority. I'll talk to these later in today's presentation also. On Page 7, you'll note that NZME operates as an audience- and customer-centric-integrated multichannel media business. We now connect advertisers with our Audio, Publishing and Real Estate audiences, which in total reached over 3.5 million New Zealanders every month. This is growth from last year. Our radio audience of 1.9 million is achieved through our team audio brands and includes New Zealand's #1 radio station, Newstalk ZB, across both broadcast and digital audio formats. iHeartRadio is also New Zealand's #1 podcast network. We now have a Publishing audience reaching over 2.8 million, which includes 50% of New Zealanders who engage with the nzherald.co.nz per month, together with New Zealand's #1 daily newspaper and a Publishing subscriber base of more than 191,000 subscribers. OneRoof real estate products now reach over 850,000 through both our OneRoof digital platform and [indiscernible] dedicated property newspaper sections across the nation. Overall, the NZME audience engages across 32 print publications, 10 audio brands, 17 websites and 12 real estate publications. Page 8 highlights the strong position that NZME has in each market that it participates in and the overall split of revenue across each channel. We're pleased to have achieved revenue market share gains in 2021. We have once again outperformed market revenue growth year-on-year in Radio, Print and Digital Display advertising. This has resulted in gains in market share to 40.9%, 47.4% and 24.2%, respectively. This is a testament to the ongoing progress we're making in delivering on our strategic priorities and the fantastic content that we produced across our platforms. The charts on Page 9 show the changes in market revenue across Radio, Print and Digital Display, together with how NZME has grown its market share in each channel over the last 3 years. It's been pleasing to see market growth in 2021, with radio market revenues on a trajectory to return to pre-COVID levels. The Digital Display market data for the second half of 2021 has not yet been published, but the graph shows the strength of the first half, compared to the prior years. As I mentioned earlier, I'm extremely proud of the revenue growth that has been achieved from our Digital platforms. The left-hand chart on Page 10 shows the emerging growth of digital audio revenue from iHeartRadio. It's up 51% in 2021. The center chart shows the size of the digital revenue from Digital Display advertising and the emergence of the growing Digital subscription revenue in the Publishing business, culminating in a 32% growth in total Digital Publishing revenue. Finally, on the right-hand chart, you can see the 90% increase in Digital revenue from our OneRoof property platform. It continues to strengthen its position to become your complete property destination. Again, these charts highlight the Digital transformation that is well underway. I'll now take you through the performance of each of the divisions for the year, together with an update on the strategic initiatives division. Let's now start with Audio. On Page 12, you'll see Audio audience metrics. The left-hand chart shows that NZME has maintained total weekly radio listeners year-on-year at around 1.9 million. The center chart shows NZME's audience market share with the lighter section of each bar the music audience and the darker section of the share of the talk audience. The chart highlights how NZME's overall share has grown over the last year, with the growth coming from the strengthening of Newstalk ZB talk radio audience. The chart on the right shows the increase in total listening hours on NZME's digital audio platform, iHeartRadio. It now has average monthly listening hours of over 6 million. We're seeing phenomenal growth of audience across our Audio business. Page 13 shows the financial performance of the Audio division. You'll see radio advertising, overall, grew 10% in 2021. The first half of the year was 17% higher than last year before the impact of further restrictions being felt from August. As I mentioned earlier, iHeartRadio revenue grew 51% in 2021, supported by the continued increase in listening hours that I spoke about on the last slide. Other revenue for the division is lower, as last year includes the government wage subsidy relating to the division. As you'd expect, higher advertising revenue resulted in an increase in agency commissions and content costs. This brought EBITDA margin to 12% for the year, which compares favorably to last year, when you adjust for the impact of the wage subsidy, which resulted in an artificially high margin. On Page 14, you'll see the significant progress towards the 2023 strategic targets for Audio. As mentioned earlier, the audience share has grown by 1.8 percentage points this year, exceeding our goal to grow 1% per annum. We continue to grow reach-through frequency acquisitions, but we are also expanding our audience appeal through our focus on podcast content, youth audio and sports entertainment with the alternate commentary collective. You'll see our Radio revenue share grew 0.5 percentage points in 2021, short of our target growth, but we remain confident of future growth rates. In addition, we are working as an industry to grow the overall radio market. We've continued to grow the portion of revenue from digital audio, with 4 -- 3.4% of total audio revenue from digital platforms, mainly on iHeartRadio. On the right, you'll see the initiatives we outlined at our November 2021 Investor Day, included within the 2022 initiatives on this page. Now move on to our Publishing business. Page 16 shows the continued engagement from both Print and Digital audiences. The chart on the left highlights the strong New Zealand Herald Print readership growth through 2020. This has tampered a little in 2021. The Herald's brand audience is shown in the center chart and highlights the continued strength of audience, with weekly audience now in excess of 2 million. NZME's platforms have continued to grow and now reached 2.8 million digital users per month. The chart on Page 17 show details of our subscriber base. This continues to grow and now totals more than 191,000 across both NZME's Print and Digital subscription platforms. While Print subscriber volumes continued to decline by 3%, as shown on the left-hand chart, a 2% yield improvement partially offset the volume decline. The center chart shows the continued growth in the subscriber base. The subscriber mix highlights the significant growth of subscriber engagement in our New Zealand Herald Premium digital product. As I noted, overall, the subscriber base grew to over 191,000, of which 140,000 are users of New Zealand Herald Premium. The chart on the right shows the steady growth to 83,000 Digital-only subscribers since launching in the second quarter of 2019. Digital-only subscribers grew by 30,000 during the year. The green line on the chart shows that the annual yield has remained relatively constant, as subscribers have grown. So let's now move to Page 18 to review Publishing's financial performance. Print advertising revenue improved by 5% compared to 2020, albeit it remains more than 20% lower than 2019. In contrast, though, Digital advertising revenue has grown significantly, resulting in a 26% improvement over 2020, and it's 29% higher than 2019. Other revenue was lower than 2020, as 2020 included $4.2 million of wage subsidies received. Print and distribution costs were 13% higher than last year due to increased volumes this year, given the temporary reductions in 2020 in response to COVID. Agency commissions increased in line with the higher revenue through the sales channel. As a result of the change in accounting policy with regards to Software-as-a-Service, previously capitalized costs have now been expensed. This increased recognized expenses by $1.7 million in 2021 and $1.4 million in 2020. Overall, the Publishing EBITDA for the year was 1% higher at $46.5 million. Page 19 shows the progress we've made towards making the Herald New Zealand's Herald. As noted, total subscribers increased by 13% to 191,000, with 43% of these subscribers being New Zealand Herald Premium digital subscribers, well on track to achieving our 2023 targets. With the significant growth in Digital advertising revenue this year, it now represents 46% of total Publishing advertising revenue. We continue to enhance our product offerings through multimedia storytelling, and we have plans to launch new subscription verticals. We're also pleased to have BusinessDesk join us at NZME. BusinessDesk has built a premium digital offering, focused on the business community. We are working well with the BusinessDesk team to accelerate their growth. You'll note that the 2023 EBITDA target has been adjusted to reflect the impact on EBITDA of the Software-as-a-Service change and accounting policy. Let's now turn to NZME's real estate division, OneRoof, on Page 21. The chart on the left shows the OneRoof platform has a strong position in the market that now has 91% of residential for-sale listings, nationwide, and 99% in Auckland. OneRoof's monthly audience continues to grow, as shown in the center chart, and is [ weekly ] around 500,000 people per month, excluding the [indiscernible] holiday season -- sorry, listings upgrade growth is shown in the chart on the right of the page. You can see the focus that we've put on to upgrades in Auckland has lifted the upgrade percentage to 27% in the last quarter. Regional upgrades have also begun to lift with growth over the last two quarters. On Page 22, you'll see that OneRoof Digital revenue on the platform grew by 90% to $8.1 million, while Print revenues were in line with last year. OneRoof revenue grew 20% after adjusting for the wage subsidy received last year. Marketing and selling costs were significantly higher, as OneRoof invested in improving brand awareness, listings penetration and listings upgrade conversion. EBITDA was similar to last year at $2.1 million, with the increased investment focused on the growing [ Digital ] business. You'll note that pleasingly, real estate industry revenue across all NZME brands was $41.3 million. That's an 18% increase over 2020. OneRoof's continued to progress its position to become your complete property destination, and that's highlighted on Page 23. OneRoof is strengthening its reach, it's focusing resources nationally to drive listings growth and to introduce new products within the platform. There is a strong focus on growing the audience and on increasing national brand awareness. The percentage of listings upgrades have continued to increase with bespoke product bundles key to ensuring the value is being delivered to customers. We are targeting to continue growing Digital revenue, assisted by the addition of new listing verticals and additional solutions for agents. Slide 24 shows the performance of the corporate division. This also includes our [indiscernible] business and our automotive [indiscernible] side-driven. Revenue has increased 25% to $3 million, with additional events able to be run in 2021 and growth in revenue from Driven. Expenses were 10% higher, primarily as a result of additional events during the year, given events were able to be run. Let me now hand over to David Mackrell, NZME's CFO, to take you through the financial results.

Thanks, Michael, and thank you to all who have joined us on the call today. Page 26 shows the operating results for the year with operating EBITDA of $66 million, which is in line with the adjusted 2020 result. The IFRS Interpretations Committee made [ a tender ] decision in April 2021 with regards to the accounting treatment of configuration and customization costs in relation to Software-as-a-Service arrangements. As a result, the company has changed its accounting policy in regard to the capitalization of these costs. The result of this was to expense $1.7 million in 2021 that would previously been capitalized and also to have adjusted the 2020 accounts to reclassify $1.4 million from capitalized cost on the balance sheet to expenses. The impact on net profit was minimal, as there was an offsetting reduction in the amortization expense. As mentioned, operating revenue was up 5%, with segment revenue up 9%, excluding the impact of the net $8.6 million of wage subsidy received in the first half of 2020. Operating expenses increased by 7%, driven by higher costs in line with increased volumes and higher revenue, noting also that in 2020, we had some temporary cost savings as a result of initiatives in regard to COVID-19. Overall, operating net profit after tax was $23.6 million, which was 6% higher than last year, resulting in operating earnings per share of $0.119 per share. I'll now comment on our expenses for the year on Page 27. NZME continues to focus on ensuring it has an efficient cost base. While overall, the cost base was up 7% on last year, it remains more than $20 million below the 2019 level, supported by the permanent cost base reductions implemented in 2020. Print and distribution costs were 11% higher due to the temporary cost savings achieved in 2020 in response to COVID-19. Agency commission and marketing costs increased to $43.3 million, largely driven by increases in revenue and higher selling costs to grow the OneRoof business. Content expenses increased 9% year-on-year, in line with increases in music royalties and digital content, which supported the higher revenue. Exceptional items totaled a net $10.8 million gain, including a $15.4 million profit on the sale of GrabOne, which was completed on 29 October, 2021. This compares to last year's net exceptional costs of $8 million as a result of the significant workforce restructuring conducted in response to COVID-19 during 2020. The summarized balance sheet on Page 28 shows a further-strengthening position with net assets of 10 -- sorry, $157.1 million. Net working capital, including cash, continues to be a net liability due to increases in tax payable, deferred revenue, creditors and other accruals. These more than offset the reduction in merchant liabilities as a result of the sale of GrabOne. Plant property and equipment, intangibles and other net current (sic) [ non-current ] assets decreased due to depreciation and amortization exceeding capital expenditure. Right-of-use assets reduced in line with the reduction in lease liabilities, as the terms of the leases reduced together with the reclassification of a portion of this asset to a finance lease receivable in relation to the sublease part of the Auckland and Whangarei offices. The company finished the year with a net cash position of $13.5 million, representing an improvement of $47.4 million compared to last year's net debt position of $33.8 million. Moving now to the cash flow summary on Page 29. Cash flow from operations was $3.8 million lower than 2020, primarily as a result of higher tax paid for the year and a smaller movement in working capital. These were partly offset by lower exceptional items. Capital expenditure was $6.5 million for the year, which was $1.5 million higher than 2020. Both years have been adjusted for the Software-as-a-Service accounting policy change. Ongoing capital expenditure is expected to be between $8 million and $10 million per annum. This is lower than we have previously guided, given the accounting policy change relating to Software-as-a-Service. Proceeds from the sale of assets includes the cash proceeds from the sale of GrabOne of $17.5 million. The graph on Page 30 shows how the company has repaid $100 million of debt over the last 3 years and is now in a net cash position. This means our leverage ratio is well below our target range. With a strong leverage position, the Board has declared a fully-imputed and fully-franked final dividend of $0.05 per share, bringing the total dividend for the year to $0.08 per share. The dividend will be paid on the 23rd of March 2022 for shareholders registered as at March 11, 2022. I'll now hand back to Michael to talk about the outlook and for the year ahead.

Thanks, David. NZME's played a significant role during 2021 with regards to its purpose of keeping Kiwis in the know. You'll see on Page 32, some examples of how we've leveraged our powerful platforms to inform, improve and foster conversations on key topics during the year. I'm really proud of how the NZME team came together to create and deliver on the 90% Project, championing Kiwis to get fully immunized by December 2021. This was not only good for New Zealanders but good for New Zealand businesses and for the New Zealand economy. We felt it was important to lead on the [indiscernible] and [indiscernible]. We've invested in new platforms and brands that we know will support the delivery of our purpose over the years ahead. Let me now share an update on our outlook provided on Page 33. As you'll know, we are in the early days of our Omicron outbreak. We note that the housing market is cooling, and there are inflationary pressures building across the economy. Businesses are, therefore, being cautious in their marketing approach at this time. Having noted that, though, we are pleased to see that advertising levels currently tracking above 2021, with first quarter 2022 bookings tracking 4% above the first quarter of 2021 levels. This revenue growth is offsetting the inflationary cost pressure that we are seeing. Based on the early trends to date, we would expect EBITDA growth over 2021, despite the loss of the GrabOne contribution from 2021. As previously announced, we have engaged in dialogue with Google and Facebook. To date, they have not provided offers in line with those achieved in Australia, even after adjusting for New Zealand's smaller market and audience size. We do, however, anticipate a decision from the New Zealand Commerce Commission regarding the provisional authorization to commence collective bargaining in the first week of March 2022. Following this decision, NZME expects to announce the on-market buyback, and a further announcement will be made to confirm the commencement of that buyback. We look forward to providing you with further updates at our Annual Shareholders Meeting in April this year. That concludes today's formal presentation. David and I are now happy to take your questions.

[Operator Instructions] Our first question is from Roger Colman.

I got -- first question relates to the dividend payout policy, the net cash development. If in the long run, you run it at 50% of free cash flow and looking at the current EPS, you'll be building up maybe $0.20 a share worth of net cash at the proposed dividend payout ratio every 3 years, at least. So what's the plan of disposing that after this -- getting rid of that excess cash after you do the $30 million stockpile a day?

Thanks for that question. No, you're absolutely right. So first thing is, we're pleased to have, obviously, repaid all the debt and be in a strong cash position, that's obviously led the Board to not only be able to pay strong dividend for the year, but signal the tended commencement of the buyback, with a further announcement on that in a couple of weeks' time. I think as you say, the Board has already shown its appetite for returning cash to shareholders. And so capital management is certainly key on the agenda of the Board meetings, each meeting. And so I would expect you to be seeing on a regular basis, excess cash being able to be returned to shareholders, just as we're doing with the share buyback.

Thank you. I'll let other people talk.

Roger, we've got lots of people on the call today, but I thank everyone's maybe waiting for other one-on-ones or other questions. Is there anything else you had before we close off, Roger?

Yes. So there's a question on the OneRoof gap on Trade Me, right, from [ 250,000 to 396,000 ]. Is that the good Trade Me stronger in the regional markets? Or do you just [indiscernible] slack a bit?

We saw actually in the middle of the year, Trade Me have a step-up from a [indiscernible] perspective. We've not been able to explain it from seeing anything different in the market or anything different happening on their site. So we're not convinced, that's actually a real step change, and we're really comfortable with what we're doing, from a product perspective and from [indiscernible] but obviously [indiscernible], and so we'll continue to focus on building the brand and closing that gap. Having said that, listing is the key. We've got to have the inventory first. So we're doing well on closing net gap, and we're obviously engaging an audience with the upgrades that are now being sold through those listings, which we're pleased to see that growth.

Right. If I'm allowed to just continue on OneRoof, if I look at what's happened since -- if I look at, let's say, February, mid-February inventories relative to last year, compared with what happened at the close of calendar '21, there's been a significant uplift in inventories on the websites, both you guys and Trade Me. And I would -- and with this Auckland run at 23.5%. We got to see revenue growth of OneRoof of current rates in the Digital component still running at 50% to 60% at least?

Yes, absolutely. That's our expectation. And that's why you'll see that we have a 2023 goal of significant increases in [ deep ] listings overall. You're right, of seeing more listings on the sites and -- we often have this dilemma. At the beginning of last year, properties were selling very, very quickly, so people weren't needing to advertise. Now, there's more inventory on the site, properties are taking longer to sell. So people are advertising. So it's an interesting time in the market, right now.

Right. And if I just ask one last question relating to, one, the Print media business, right? The increase in distribution costs, obviously, reflected the low base beforehand. But you've got declining Print issuance and [indiscernible] Print publications. And we're going to see that big cost factor go to zero growth rates with the decline in Print revenues?

Yes. I think our Print and distribution costs are about 50% fixed, 50% variable. We do see pressure from, as you can imagine, from freight and Print costs just from inflationary pressures. So that's something we're working hard to offset. But absolutely, volume declines do help with that.

We have a written question from Dennis [indiscernible]. Why is the buyback timing dependent on the decision of the Commerce Commission on collective [ bargaining ], does that mean the buyback might not happen, if the timing is pushed out or the decision is negative?

Dennis, thanks for your question. I think, as you're probably aware, markets have to be completely informed when buybacks are being undertaken. So our Board quite rightly said, let's make sure the market is fully informed of any pending decisions, positive or negative, at the time before a buyback is commenced. So we didn't want to be in the market, when the decision came out and given it's [indiscernible] action to take.

We have another question from Shuo Yang.

Just on the capital management. In terms of acquisition opportunities, what's the scope to do more in acquisitions and the type of acquisitions it would look like? Is it, sort of, similar to the BusinessDesk acquisition or would you [ not ] look at something larger on bulk here as well?

I think, in terms of the way we think about the acquisition opportunities, obviously, things that will help make us go faster and align with our core strategic objectives, and you can see how BusinessDesk very much fits into that. So we are always on the lookout for the right thing that will make us go more quickly. And at the moment, we don't have anything on the horizon, but if something was to come up, it's those sorts of things that [indiscernible] our strategy and make us move faster towards it, and that could be of any size, but at this stage, there's nothing on the horizon.

And David, just on the cost base in 2022, when the economy opens up, just want to understand what sort of cost will come back into the business, assuming no growth in revenue-related costs?

Sorry, the cost price, as I said, for this year -- in 2021, there was very little temporary adjustments that were made. It was a little different to 2020. We had a period of time, where there was no production of some of the newspapers, and that didn't occur this year. So the cost base is stable in that context. So there is only the volume-related costs and inflationary pressures that would drive the cost base up in 2022.

We have a written question from Jason [ Simonton ]. "Can you talk to M&A and the integration of BusinessDesk? Are you actively seeking other opportunities?" I think David answered most of that conversation, but perhaps you could you could talk to the integration of BusinessDesk.

Jason, thanks for the question. So we've effectively taken the position that BusinessDesk is a really strong brand in its own right, and we think it can stand completely separate in the market from a New Zealand Herald Premium. So our initial integration is as much as making sure that we're using our marketing and sales capabilities to ensure that we can grow it as quickly as possible, while it's effectively a stand-alone brand, stand-alone great team of journalists and at the same time, ensuring we use our technology platforms to seemed audience to it or to seemed programmatic revenues. And so we've immediately seen those actions taken and beginning to be a fruit. So that is our plan. There's no -- nothing more than actually ensuring we grow that brand, that business, as quickly as we can with using our skills and assets. With regard to other M&A, just sort of tearing on from David, we have no plans to be out -- doing any large M&A transactions. I think, as we've said before, though, if something turned up and it made sense for shareholders, of course, we'd consider it, and we bring it to shareholders, if that was the right thing to do. But if there are smaller things like BusinessDesk, which are core to the 3 pillars of our strategy, allow us to grow quicker and generate returns for our shareholders at that sort of level, we think those are good opportunities for us.

Thank you, Jason. We have another recent question from Akshay [indiscernible], "Agency commission and marketing costs grew faster than revenue in 2021. What drove this? And should we expect a similar trend in 2022?"

Yes. So two separate things there. Firstly, the agency revenue component of our business, which is just over 30% of our total advertising revenues, is the segment of our business that has been growing the quickest. And maybe putting that in perspective, that probably highlights larger corporates, who are dealing with agencies, have probably been doing better and spending through the [ media ] agencies than smaller SMEs necessarily to have maybe done a little tougher over the last year. So we've seen a bit of a mix change in our revenues over that last year, which has seen that agency revenue line increase. And then substantially, the marketing increases have been within the OneRoof business, and that's been a fine balance that David and myself and Paul Maher, who runs the OneRoof business, have been managing. Let's spend appropriately and invest for growing the overall total audience and growing the brand of OneRoof while not jeopardizing its profitability. So effectively, any incremental available contribution from OneRoof is being put back into marketing to grow it faster.

We have another recent question from Dennis, "Can you provide more color on what collective bargaining means, in terms of timeline, and probability of a deal with Google and/or Facebook? Can NZME choose to negotiate independently?"

Yes. So maybe I'll tackle the second part of that question first. And yes, we absolutely would retain the right to continue to negotiate individually. And I think, we put out a market announcement back in November last year, when we announced that we would look to obtain collective bargaining, that we were engaging individually, and we'll continue to do that. So that's certainly something that we would predict. We think the ability to be able to negotiate as an industry just allows us to have a stronger voice at the table with the platforms. It allows us to engage with the New Zealand government and policymakers better around what's right for the New Zealand industry to support editorial and [indiscernible] overall and continued investment in journalism. On timing, I think some of that would be a bit of unknown. We obviously know that Google has announced that it wants to bring Google in new showcase to New Zealand, it hasn't launched it yet. It has done a small number of deals we understand, but they're really looking to have enough content in New Zealand that would allow them to launch it, and so being able to complete arrangements with some of the larger publishers, I'm sure, would be important to them. So we'll be focused on that. Okay. So I think, that's all of our Q&A for today. So thank you, everyone, for participating on the call. We'll obviously be catching up with many of you over the next week or so, and we'd be happy to receive any other questions or calls from me. There will be a recording of this presentation available on our website by the end of the day. So thank you for your time, and enjoy the rest of your day. Thanks.

Goodbye.