NZME Limited (NZM) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to New Zealand Media and Entertainment's 2023 Half Year Results Webcast. My name is Kelly Gunn, GM Communications at NZME. Presenting on the call today will be Michael Boggs, NZME's Chief Executive Officer; and David Mackrell, NZME's Chief Financial Officer. [Operator Instructions] I will now hand over to our CEO, Michael Boggs.

Good morning, everyone. Thanks for joining David and I, as we take you through NZME's 2023 half year results this morning. For those of you joining through our webcast, we'll take you through the presentation pack. You should see that in front of you now. Firstly, I'll go through a summary of our results and an overview of our advertising revenue across each of our platforms so far in 2023. David will then take you through the financial results for the half. Following that, I'll come back to cover off some of the specifics around each of our divisions, that's Audio, Publishing and OneRoof, and we'll conclude by reiterating the outlook and capital management plans for the remainder of the year. We'll obviously then be happy to take any questions that you may have for us. By way of introduction, as noted earlier this year, the market has continued to be challenging following the significant decline in business confidence that was experienced in the last quarter of 2022. Coupled with extremely low consumer confidence that has been linked to higher interest rates, we've seen the property market stall with new listings coming to market down 20% year-on-year. This decline is even worse for Auckland, which had a 25% fewer listings coming to market. As you'll see in our results, NZME's revenue declined by $10.7 million, predominantly from the real estate industry revenue, which had a $4.1 million impact. Government spending was down $2.7 million and retail customers are down $2.2 million. Interesting, the travel category has yet to fully recover, and it remains $3 million below 2019 levels during the half. We've continued to carefully manage costs across the business, finding some immediate cost savings and efficiencies without impacting significantly on the business' performance. These cost efficiencies offset the reduction in revenue by $3.9 million in the half. However, we are beginning to see some improvement. Business confidence in New Zealand, while still negative, has been recovering and interest rates are peaking. There are positive signs for our OneRoof business with real estate sentiment also improving. However, we do note the economic environment does remain uncertain. Pleasingly, the second half of 2023 has commenced well with revenue performance improving. August and September bookings are currently tracking to be 3% higher than the corresponding months in 2022. Given the current performance, NZME confirms that it picks to be at the lower end of the EBITDA guidance that we previously issued of $59 million to $64 million 2023. There has been a further working capital increase during the half. However, a working capital reduction of around $10 million is expected by the end of the year, leaving the net debt forecast to be below the lower end of the target leverage ratio. Let me now take you through the results for the half on Page 5. As you'll hear, we have continued to deliver against our strategic objectives in the first half of the year despite this uncertain economic environment. Operating revenue was 6% lower than last year. This reflected reduced business confidence and a weak real estate market. However, NZME's Audio division saw its highest revenue market share since measurement began in 2016 at 42.4%. We also continued to grow our Publishing subscriptions, reaching 218,000, that's up from 209,000 at the end of 2022. And of those, 123,000 were digital-only subscriptions. That's up from 113,000 at the end of last year. OneRoof digital listings revenue grew 13% year-on-year. This was despite the aforementioned weak real estate market, which resulted in a 20% reduction in new residential real estate listings coming to market. These growth areas demonstrate we continue to make progress and improvement in key strategic areas despite the challenging economic environment we're operating in. Operating expenses for the half reduced by 3%. This reflects our continual focus on cost disciplines during this fairly very challenging market. This resulted in operating EBITDA of $21.3 million. That's a reduction of 24% on the previous corresponding period. In turn, net profit after tax was $2 million for the half and operating earnings per share were $0.016 per share. As I noted, we are seeing some pleasing signs of recovery in several key areas leading into the second half of the year. Based on this, the NZME Board has declared a fully imputed interim dividend of $0.03 per share. This is the same as last year. The net debt increased to $31.6 million during the half. This reflects the payment of dividends to shareholders of $11 million and a temporary increase in working capital of $8.2 million. As I noted earlier, we expect to see a reduction in working capital and net debt by year-end. Let's now turn to Page 6. Business confidence has been negative for some time and was at its lowest at the start of this year, while still negative confidence has steadily improved over the year and continues to do so in the second half. The graph on the bottom left shows that the total agency advertising market has been lower year-on-year for every month since December of 2022. This again highlights the impact of lower business confidence on advertising revenues right across the market. The graph on the right shows NZME's year-on-year advertising revenue decline by month, albeit as I noted earlier, August and September are improving and returning to growth. The graphs on Page 7 further demonstrate the challenging environment we have faced. Consumer conference has been negative for nearly 2 years. The official cash rate has risen from 0.75% to 5.5%, with median house prices down 16% from the peaks we saw in the housing market in November '21. The graph on the right shows the significant decline in new real estate market listings from October of last year. As I noted earlier, total new property listings were down 20% for the half year. That's the blue line with Auckland down 25% year-on-year. There are signs of recovery with market consensus for house price growth in the second half of 2023 and interest rate reductions expected in 2024. I'll now cover our 3 strategic priorities and our performance in the context of the overall market performance. We remain focused on our 3 strategic priorities we set for 2023 as part of the plan that we set in 2020. To recap, our strategic priorities are: firstly, to be New Zealand's leading audio company; Secondly, for the New Zealand Herald to become New Zealand Herald; and finally, for OneRoof to become your complete property destination. Each of these strategic priorities has key pillars of delivery, and I'll cover these in more detail later in the presentation. On Page 9, we highlight the key revenue streams across our multiple platforms and our 3 divisions: Audio, OneRoof and Publishing. For Audio, we've seen both audience market share and revenue market share increase from the end of 2022. Audience share has increased to 38.1% and revenue market share is up to 42.4%. In OneRoof, despite the property market stalling, we have grown our digital property audience reach to 49%. Our print readership market share remained stable at 56.3%. However, our revenue market share across OneRoof print and publishing is lower as a result of NZME's greater exposure to the Auckland market, which has been weaker, particularly for real estate activity given the reduced number of new listings that I've referenced earlier. The graphs on Page 11 show the separate components of NZME's digital advertising revenue. The strength of our digital audio offering is clearly evident on the left of the page with strong revenue growth of 28% in net digital audio. The other 2 graphs show the market headwinds faced by both Publishing and OneRoof. These have both declined compared to last year, reflecting the overall reduction in market spend during the year. The challenges spoken about previously, including lower consumer and business confidence, significantly lower spend in government, travel, retail as well as fewer new property listings coming to market have contributed to these declines. Let me now pass over to David Mackrell, our Chief Financial Officer, to take you through our 2023 half year financial results, then I'll come back to talk through each of the pillars.

Thanks, Michael. Thank you, everyone. Thanks to those of you who have joined us on the call this morning. Page 13 shows the operating results for the year and which you will see the difficult market conditions reflected in these figures. Operating earnings were impacted by weaker revenue with declines in both advertising and reader revenue. Reader revenue was 5% lower, largely as a result of the decline in print circulation revenues, which reflect significant impacts due to Cyclone Gabrielle. Advertising revenue was 7% lower, driven by lower Publishing and OneRoof advertising revenues, with Audio revenue flat year-on-year. The other revenue growth of 23% is primarily due to higher third-party print and distribution and events revenue in the half. Disciplined cost management more than offset inflationary cost pressures across the business, resulting in operating expenses being 3% lower. Operating EBITDA was 24% lower than the previous corresponding half, delivering an operating NPAT of $2.9 million, which was 68% lower than last year. Slide 14 highlights the movements in key expense categories contributing to the overall reduction in operating expenses I mentioned in the previous slide. There have been some minor changes to expense classifications with the impact of these changes detailed on the supplementary pages 38 to 40. Overall, people costs were 2% lower, reflecting the efficiencies achieved across the business, more than offsetting the inflationary pressures on the category. Print and distribution costs were similar year-on-year with increased paper and distribution costs, offset by lower volumes. Agency commission and marketing costs were 11% lower due to the reduced revenues. Overall, other expenses were 3% higher with lower IT and communications costs, offset by other costs being higher, including the fulfillment costs, which relate to the resale of digital marketing products. Nonrecurring expenses relate primarily to the restructuring in response to the weaker revenue in the period. The balance sheet remains strong, albeit with increased working capital and the payment of the final 2022 dividend, resulting in a net debt increasing by $14.1 million. Net working capital, excluding cash, increased by $8.2 million in the first half driven by seasonally lower payables and accruals and a $4.6 million increase in tax receivable, which is also timing related. We expect working capital to reduce by around $10 million by the end of 2023 based on lower inventory levels and the seasonality of tax payments. The cash flows for the first half are shown on Slide 16. Cash flows from operations is lower than the first half of last year due to the reduced earnings, partially offset by lower tax payments. Given the lower first half earnings, tax expense is lower than tax paid during the first half of 2023. Capital expenditure for the first half is in line with the expected full year number of around $10 million. The final dividend for 2022 was $0.06 per share and was paid on the 22nd of March 2023. Slide 17 shows the movement in net debt and the resulting leverage ratio over the last 5 years. Net debt increased last year as a result of the capital return program, which resulted in distributions to shareholders of $43 million. As a result of the increased net debt in the first half of this year, combined with the reduced earnings over the last 12 months, the leverage ratio has increased to 0.8x EBITDA, which is in the middle of the target range of 0.5 to 1x. As Michael mentioned earlier, the Board has declared a fully imputed dividend of $0.03 per share, which is due to be paid on the 27th of September 2023. I'll now hand back to Michael to cover progress across our strategic priorities.

Thanks, David. Now let me take you through the performance of each of our 3 divisions for the half, along with an update on progress towards the strategic targets that we set back in 2020. So let's first move into the Audio division. So the graphs on Page 19 shows the audience metrics for our Audio division. The chart to the left shows that NZME's weekly radio listeners has remained around $2 million. The center chart highlights NZME's audience market share with the darker section of each bar reflecting the share of our music radio stations and the lighter section is the share made up by our talk radio audience. Newstalk ZB continues to be the country's #1 commercial radio network, and it's maintaining its overall talk radio audience share. The right-hand chart shows the total monthly listening hours on NZME's digital audio platform, iHeartRadio by month. You can see the continued growth during the last 6 months. The table on Page 20 shows that financial performance of our Audio division continues to improve with digital revenue growth and lower costs contributing to improved profitability. Digital audio revenue grew 28% compared to the first half of last year, with overall audio revenue just 1% lower than the first half of 2022. Pleasingly, our radio market share grew to 42.4%. That's up 1 percentage point compared to 2022. People costs in the audio division were lower for the half due to the strong cost management initiatives, which have been offsetting the wage inflationary pressures. Agency commission and marketing costs were 13% lower. This reflects the lower agency revenues and the reduced marketing during the half. Despite this challenging operating environment, the division's EBITDA margin improved 1 percentage point. We're making good progress towards our Audio targets for 2023, and these are highlighted on Page 21. We're 2.5 years into the 3-year strategy and audience here has grown. The digital radio total listening hours have grown 12% to $38 million for the half, and it's expected in the strong -- or reflected, sorry, in the strong digital revenue growth that we saw of 28%. In addition, NZME's podcast network continues to lead the market with 1 million monthly listeners who have downloaded more than 44 million podcasts in the first half of this year. Podcasting continues to be a focus area of growth for NZME. We are pleased with the radio revenue market share growing 1 percentage point compared to the 2022 year-end. Our new focus on an industry-wide audio efficacy program that's led by the Radio Broadcasters Association was launched to drive total radio market growth. And this program will continue to develop over the remainder of the year, putting audio at the forefront of all agencies and advertisers for the total market. While the New Zealand advertising market does remain challenging, our audio revenue is now 5% ahead of what it was in 2019. It's important to also note that currently, NZME's digital audio revenues are not included in the radio share metrics. However, they deliver incremental revenue and share gains for [ us ]. With this digital audio revenue now making up 7% of our total audio revenue, we've already exceeded our target set for 2023. Increased customer enquiries are being generated across our customer base to support this growth in digital audio revenue. We also commenced commercial representation for the second and third largest podcast networks in New Zealand earlier this year, which opens up further digital audio revenue opportunities for us. Let me now move on to our Publishing business. The digital transformation of our Publishing business continues to progress, whilst we continue to maintain a high-performing print business. The chart on the left shows our print subscriber volumes and the yield trend over recent years. Unfortunately, Cyclone Gabrielle, which impacted many communities across New Zealand's North Island had an impact on volume and yield with reduced acquisition, challenges with distribution, deferred yield management and temporary cancellations of subscribers over that time. The middle chart shows the continued growth in paid digital-only subscribers. They now reach 123,000. We now have more than 218,000 paid subscribers across our print and digital customer base. The right-hand chart shows digital subscription volume split between corporate and individuals. The solid lines show the continued growth in the number of both individual and corporate subscriptions. The dashed lines show the yield of each subscription type with a relatively small decline in individual subscription yield, but a significant decline in corporate yield as the take-up of subscriptions through corporate relationships exceeded our expectations. We see a real opportunity to enhance performance through both volume and yield initiatives with our digital subscriptions. Now turning to Page 24 and our Publishing division financial results for the half. The difficult economic environment has impacted both reader and advertising revenues. Total reader revenue declined with lower print subscriptions revenue and retail outlet sales only partially offset by the growth in digital subscriptions revenue. As I just noted, Cyclone Gabrielle had a significant impact on print subscriptions with these temporary cancellations, reduced acquisitions and the deferred yield enhancements, all contributing. We would expect future performance across print and retail to be in line with prior trends. Total advertising revenue declined 11%, with both digital and print advertising revenue lower. Digital revenues are impacted by a reduction in overall market spend. Advertisers are able to quickly turn campaigns on and off based on their own business performance and expectations. This has definitely impacted us during the half. With lower revenue, several initiatives were undertaken to manage costs with lower people costs more than offsetting the wage inflationary pressure. Agency commission and marketing costs were 18% lower, reflecting the lower revenue from agency clients and the reduced marketing spend in the half. Despite expenses being 2% lower, EBITDA was 29% lower than the first half of 2022. So moving on to Page 25, I can highlight the progress we continue to make towards the Herald becoming New Zealand's Herald, with several of our strategic targets set out in 2020 already met. Total subscribers increased to 218,000, with more than half of these, 123,000, being paid digital-only subscriptions. We've seen strong growth in activations of corporate subscriptions in the first half and growth in customers taking up introductory offers for bundled packages for Herald Premium and for BusinessDesk. In July 2023, we increased the price of Herald Premium and BusinessDesk with a view to lifting yield on the individual subscriber base, while corporate yield initiatives will be undertaken on a customized basis. Also in July, we launched a new partner subscription offering by a New Zealand Herald with the New Zealand Listener and our media. This has been performing well to date. We also introduced What The Actual, a new video-led news platform targeting our Gen-Z audience via social media. We've expanded the personalization of our New Zealand Herald homepage with enhanced data models to increase audience engagement and conversion, and this will lead to improve subscriber acquisition and advertising revenues moving forward. Let's now turn to OneRoof, NZME's property division. Page 27, the graph on the left highlights that the OneRoof digital platform has almost all of the residential for sale listings in the market. The main gap is the private sales, which are not a focus of OneRoof. The chart in the center shows that OneRoof continues to close the audience gap to Trade Me online and as a result, delivers high-quality inquiries and leads to agents. The chart on the right demonstrates the improvement in digital listings upgrades compared to the same months last year. Upgrade conversions are the key revenue generator for the OneRoof business. As you can see, the ongoing focus on upgrades has continued to lift the conversion percentages right across the country. So let's move to Page 28 to review OneRoof's financial performance for the half. The increased listing upgrades I just mentioned have offset the 20% decline in new listings coming to market. Even with lower new listings, digital listings revenue grew 13% year-on-year. However, this was offset by reduced advertising and sponsorship revenue on the site. Print has seen a larger reduction with OneRoof print product skewed to Auckland into higher-value properties, both of which have seen significant reductions in market activity. As we've also seen in our Audio and Publishing divisions, OneRoof people costs were lower due to initiatives to manage costs, which helped offset the inflationary pressure on wages. Print and distribution costs were also lower with fewer and smaller publications, given reduced demand with the significant decrease in listings during the period. Continuing the trend from the second half of 2022, marketing costs increased due to the focus on growing the OneRoof brand and driving listing conversion rates nationwide. So lower overall revenue for OneRoof due to the real estate market weakness resulted in a reduction in EBITDA, although despite these market conditions, there was still an improvement on the second half of 2022. We were pleased to recently exercise the 2018 option for the [ purpose ] of the remaining 20% of OneRoof from our joint venture partner. This reflects our belief the OneRoof business is positioned well to take advantage of improving real estate sentiment. You'll see on Page 29 that OneRoof is making strong progress towards its strategic targets. OneRoof continues to close the online gap to Trade Me as the #1 real estate player in the market. This has been helped by growing brand awareness and content optimization, which is focused on personalization, localized communications and data insights. Our share of audience reach also continues to grow with increased online listings, views and inquiries. Our multi-platform capabilities and reach have also helped deliver an increase of 64% on listing views. Enquiries are up 35% year-on-year. Despite vendors being reluctant to spend on marketing their properties during a sluggish environment, the percentage of listings upgraded has continued its impressive growth in Auckland. Regional listing upgrades also continue to grow and represent a significant opportunity given that 2/3 of new listings are from outside of Auckland. With continued focus on improving listings conversion, OneRoof is well positioned to deliver EBITDA growth as the real estate market recovers from this current downturn. The following slide, which is Corporate and Other, shows increased revenue as our NZME Events team didn't run any events in the first half of last year due to COVID. Therefore, business activity for this division resulted in slightly higher revenue and costs when compared to the first half of 2022. So let's now move to discussing NZME's outlook and a recap of what we've talked about earlier. So as mentioned earlier in the presentation, business confidence, whilst all negative, has been improving in the first half of the year and interest rates are peaking. Real estate sentiment is improving. However, we understand the economic environment does continue to remain uncertain. We are pleased that the second half of 2023 has started off well and revenue performance is improving. As we noted earlier, August and September bookings are currently tracking to be 3% higher than a year earlier. As you'll know, the fourth quarter is typically NZME's largest quarter, and 2023 will be influenced by the New Zealand election, the Rugby World Cup and the partial recovery of the real estate market. Based on our current performance, we confirm we expect to be at the lower end of the EBITDA range previously issued of $59 million to $64 million for 2023. We are pleased to have declared an interim dividend of $0.03 per share for '23, which is at the same level as last year. Given the seasonality of cash flows, we also expect to see a release of working capital of around $10 million in the second half of 2023. Given this, and based on the expected financial performance, net debt is forecast to reduce by the end of the year, resulting in net debt below the lower end of the target leverage ratio. We've regularly talked today about the uncertain environment we're operating in. Given this, the Board continues to have a desire to operate at the lower end of the target leverage ratio, and will it review its capital management options together with the full year results at the end of the year. That now concludes our presentation, but David and I are obviously now happy to take your questions.

[Operator Instructions] Our first question is from Arie Dekker.

Great outcome on Audio. Just on costs. I mean, obviously, you've improved the resilience of the business coming out of COVID. But in COVID, you did take a lot of cost out of the business sort of along the way there and sort of 2020 in that. I mean, in terms of this economic downturn, like, it looks at this point, and I accept you're obviously managing inflation as well, but that you're more managing costs at this point rather than looking at doing any rebasing of the cost base. So I guess my question is, in the second half, if things do remain tough on the economic front, do you have any deviation to -- sorry, any intention to deviate from this managing of course or will you look at some rebasing of the cost if things continue to be tough?

No, I think you're right. We aren't managing costs as opposed to rebasing. Having said that, we are always looking at opportunities where we can be more efficient across the business. I think internally we consistently talk about -- we think we've got great teams and great processes, and we're focused now on improving the revenue line while managing costs to improve overall profitability in the second half and beyond.

And then just in terms of your guidance, I mean, at the lower end of the guidance range, just sort of looking at what that's premised on in terms of for the remainder of the year? And in particular, I mean, you've called out that by the end of the year you'll be cycling an easier prior corresponding period given that fourth quarter last year was pretty tough. Can you hit the bottom end of the guidance range if the economy is still challenging in fourth quarter this year and sort of flat to slightly down on fourth quarter '22?

Yes. our forecasts aren't predicated on significant growth for the rest of the year. As you see, August and September, we think showing improving signs of 3%, up on pre-declines for quarter 4 last year. And so we're not looking for significant growth on quarter 4.

If you were saying flat on fourth quarter last year, would you still be able to hit the guidance?

Yes, we would.

I'll come back with some more detailed questions once others have had a chance.

We've also had some online questions. James [ Lenzi ] has asked, nice work on cost control in the first half of '23, with operating costs down 3%. Can you speak to cost expectations for the second half, what you sort of already covered, but is there anything you want to add?

No, just as Michael said, we have a constant focus on cost in particular in the challenging times. We've continually looked at everything that we're doing and making sure that we're looking for those opportunities where we can keep the cost base under control.

And the second one from James [ Lenzi ]. With the New Zealand general election coming later in the year, can you talk to how elections have influenced each of the divisions historically?

Yes. So elections for us is a bit of a mixed bag. So in some regards, we do actually see increased spend whether that be from parties, for example, or people promoting the elections overall. But at a similar time, we see a number of customers who want to stand back because, specifically around election weekends, they want to stand back and not be associated with that advertising. Now the other thing that's obviously happening virtually at the same time, or in fact, at the election weekend, is actually a big game of rugby going on with Rugby World Cup, and the All Blacks are expected to be playing that weekend as well, all going well. And so, we are already seeing advertisers who have laid down significant values of revenue for those periods of time. So I think this one might just be a little bit different, and that election will be putting pressure up and down across different parts of the business. But at the same time, we have the Rugby World Cup happening at exactly the same time, which is a positive for the business.

Another one from Chris [ Patel ]. Debt increases are explained as payment of dividend. So it's a good practice unless you're very sure about strong earnings in the second half is being forecasted and $21.6 million EBIT for the first half and you're still forecasting at around $59 million being at the lower end. And does that mean second half should generate $38 million plus?

So I think -- so key thing is that this -- as we've talked about in the context of the working capital release in the second half, that will mean that the cash flow will be stronger in the second half than the first half, and that is typical of our seasonality. And then, as we look at, obviously, earnings, flatter in the first half and we look to the second half, thinking about the dividend across the overall cash generation for the year. So we're confident in what we expect to see in the second half.

Now we will ask Roger [ Colman ] to unmute his microphone.

I do want to focus on OneRoof, which is the big potential game changer. Do that [indiscernible] data include rentals, when you compare Trade Me against you guys? That's the first query. Secondly, in terms of that lead performance that -- I think you said 19% up overall. Are you beating Trade Me in lead performance in Auckland on your surveys online?

So there's a couple of questions. So our understanding is that this is the Trade Me Property total audience. So it would include rentals. NZME's OneRoof does have a few rentals on it, but isn't currently a significant focus. And obviously, NZME also has a strong news drive as part of it. As we move to the great audience gains, as you point out, and the enquiry gains, we don't have specifics around how we go volume wise versus our competitors, but more and more in our surveys, we are told that we deliver a bit of quality lead and more often than not ones that can have a big impact on enquiries of a particular property and the eventual sale of it. So the real estate agents are really valuing the leads that they receive from OneRoof.

But just a little bit of a follow-up on that. In respect to the editorial content [indiscernible] if you get in the OneRoof survey, what percentage is it roughly? Because they wouldn't have any editorial.

Yes, they do have some editorial, but it's definitely the smallest percentages.

But what is your lead percentage -- Sorry, What is your [indiscernible] percentage coming from editorial in traffic to the site?

I haven't got that here for you, Roger, but it is by far the smallest component.

Yes. Look, I'll have a follow-up question, so I'll let somebody else take their turn.

It looks like Arie Dekker has another question.

Just the reader revenues. So print sub volumes, I just -- have they continued to stabilize in the first 2 months -- or nearly first 2 months of second half?

So our standard, as you will recall, our last year's overall print subscriptions, volume was down 11% and yield was up 8%. And so that's effectively what we see as the normal sort of run rate from a print perspective. In this first half, what we saw was volume down 13% and yield up 6%.

And so you would expect a return in the second half to what you normally...

That's correct.

And some of that was the impact of the cyclone as well on subscriptions, Arie.

And then just on the softer yields from individuals, at the same time as I guess there's some moderation in the growth in individual subs. Can you just sort of talk a little to the initiatives to sort of stimulate growth in individual subs and digital? And then also, I think it's the first time you've provided it, but with that visibility on what's happening with corporate, how are you sort of -- how much further penetration do you see there? And are you concerned that you could be cannibalizing your individual -- your high-value individual audience with those corporate subs?

Yes. So I think a good couple of questions here, Arie. So yes, it is the first time we've split out the individuals and the corporates. On the -- As I may have noted earlier on the first, or in July, we actually have increased pricing for individual subs. So they've gone from being $5 a week, including GST to $6 a week from a Herald Premium perspective. And so that's rolled through with very little impact from a volume perspective. And what we are doing, and we'll see the improvements in this over the second half of the year is, as we continue to grow, we are offering longer introduction packages. So that has the impact of overall bringing yields down slightly, but all of those packages will move back up to full price over time. So both of those are key initiatives for us from a yield perspective with regards to the individuals. The -- on corporates, that absolutely is a watch out for us just on could we be cannibalizing individuals to become corporates. The key thing for us with the corporates, it's an easy way to get people using the service when the corporate is paying for it. And then our objective will be to continue to yield manage the corporate over time or introduce different features maybe that are different for corporates versus individuals where they may prefer to be an individual subscriber moving forward.

And then just a last one from me. Just on the publishing ad revenue and, I guess, digital, in particular, and you did talk to the fact that it's more easy to switch on and off. But I guess, just in the 12% that, that's down, have you lost share in digital advertising? And also, is there any aspect to which there's sort of a correction back to more sustainable levels? And I guess, I'm just sort of asking were there things and revenues in the prior period that were extraordinary in nature?

So to the last one first. No, there wasn't anything extraordinary in the past. One thing just to maybe help explain that digital that I talked a little bit about on the call was, we've seen quite a change in people's booking time frames. So we always get a large portion of our revenue actually in the month being booked. But what we've seen during these challenging times is, we're getting the normal amounts booked before a month, but in the month, customers making longer decisions in the month and then are deferring, whereas previously they may well have booked. So we actually see all the work still going on to try and win the business and book it. I mean, someone like David, the CFO in the business goes, actually, can you just hold off another month or 2 for that revenue and pushes it out of it. So that's why we see that it's an easy decision to make digital on and off nearly on a daily basis. As we talked about August and September seeing that back into growth mode year-on-year across the business, digital is definitely back into growth mode as part of that.

We have another online question from James [ Lenzi ]. Noting you spent $5.4 million in the first half CapEx, can you talk to the large projects ongoing at the moment for the $10 million for the full year?

So our CapEx is pretty consistent and has been over the last couple of years. And around half of our annual CapEx, maybe a little more, is generally related to the product development that we're doing, both across all of our platforms. So the developments we're doing with our online products for our Publishing business and our OneRoof business are the primary aspects of that. And so that accounts for probably about 2/3 of the annual spend. And then the balance goes to [ theology ] infrastructure that supports all of that and the various property spend that we have as well. So that gives you a bit of a sense of what's in that and that has been consistent over the last couple of years.

And a follow-up from James [ Lenzi ]. The team have done well on audience share gains within Audio. Can you talk to the drivers influencing this multiyear uplift?

Yes. So fundamentally, we're seeing a larger percentage of our customers buying across platform. So you -- previously, for example, Audio may have been bought stand-alone. So we're now seeing a customer going actually, we really like what you're doing in digital audio overall, so we'd like to take the digital and the broadcast audio and then we'd like to combine it with what you can do from an overall solution across the publishing assets as well. So fundamentally, I think it's our ability to be able to be creative and provide solutions across all of the assets that we have as a business.

And another one from David [ Barrow ]. Great result on digital audio areas. Do you feel like you're collecting a fair CPM yet? Assuming not, how much further to go?

Yes. So we're still -- a couple of things there. We still have plenty of inventory to sell from a digital audio perspective. So one, we're continuing to see audience grow. We continue to have inventory within the audience that we have, and therefore, that's our focus. It's certainly a product, though, that we do not want to be discounting and market. We have, as I mentioned, the largest podcaster in the country, and we -- absolutely from the market share data we have, have the largest share from a revenue perspective and one that we continue to think we can grow well.

And it looks like Roger [ Colman ] has another question.

Just a question on this process, right? There's a lot of competing companies releasing in the last week of August. But I'm wondering if the Board could consider that you guys release it 1 week early where there's less competition from [ Atlas ] and people with other media stocks releasing. That was at -- wherein -- if not that, all shareholder open window in September -- the first week in September. The effort that goes into this presentation is enormous and the audience is restricted by the fact that there's any other competing companies.

Great suggestion. We'll certainly report that back. Okay. I think that's us. So everyone -- I think see everyone today for your attendance and for those who ask questions, so it does bring us to the end of the presentation. There will be a recording of this available on our site later today. For all those on here, thanks for your interest. For those who are shareholders, thanks again for your support of NZME. We're catching up with a number of you over the coming days and weeks. So we look forward to having that and being able to give you more insight into our business. We are currently working on the next 3-year update for our strategy. And so we're currently planning an Investor Day for November at this stage. We will look to present NZME's strategy for 2024 and beyond. Thanks again for your interest and speak to you all soon. Cheers. Bye-bye.