Seven profit in steep fall

By AdNews | 13 February 2024
Credit: Daniel Moqvist via Unsplash

Seven West Media reported a steep drop in net profit after tax, down 52% to $54.46 million for the half year to December, reflecting "weakness" in advertising. 

Revenue was down almost 5% to $775.78 million and the group is continuing a cost cutting program, with savings of $20 million to 25 million in the six months to June.

No dividends were declared. 

The media group says the market decline is "moderating" in the current quarter, pacing better than the December half.

The June quarter has "limited visibility" but the company is expecting further easing in the decline.

CEO James Warburton pointed to a year-on-year decline of 9.1% in the total TV market (metropolitan, regional and BVOD).
However, this was partially offset by the 1.7 share point growth in total TV market share to 41%.

“SWM successfully executed on our strategy during the period to deliver consistent and engaging content to drive audience growth and revenue share across the total TV market," says Warburton.

"Despite this progress and our disciplined management of costs, our financial performance reflects the weakness in advertising markets, particularly as the second quarter progressed.

“We continue to believe in the power of television and firmly believe that the total TV industry is set to regain market share. Total TV is now growing, and Seven is leading that growth.

"Our view that audiences will be attracted to quality and consistent content across news, entertainment and sport is evidenced by the growth in our linear and BVOD audiences for the half year, including a linear increase of 2.2% and a 35% increase in minutes on 7plus."

Warburton says the FIFA Women’s World Cup 2023 delivered extraordinary numbers on 7plus and Seven tentpole programs saw a 36% increase in live minutes watched year-on-year.

"We are also seeing good growth in our news, with an 18% increase in live viewership on 7plus year-on-year," he says.

"Our NBCUniversal content now accounts for 16% of our total BVOD minutes and is attracting new younger female audiences as expected when we made this investment.

“Thanks to our audience growth, we were able to record a total TV revenue share of 41%, achieving the number one position in the market, an increase of 1.7 points on the previous corresponding period.

"Our share growth was achieved across each month of the half and partially offset the 9.1% decline in the total TV advertising market during the period. We gained share in metropolitan and BVOD markets and remained in line in our regional

“We see a significant opportunity to grow our digital earnings with the recent launch of VOZ finally pushing TV audience measurement into a comparable position versus other media channels.

"We are also excited by the game changing addition of digital rights for the AFL and cricket later this calendar year; together, they will add an estimated four billion minutes of content a year to 7plus and allow us to capture an estimated 45% revenue share.

“West Australian Newspapers once again delivered a solid result, with strong growth in digital audiences and the launch of new digital products resulting in 4.4 million unique monthly audience, up 18.5% in the past year. Revenue increased, largely attributable to new commercial print opportunities, albeit with higher costs.

“We continue to be disciplined on our cost outlook. Costs for the half were in line with our expectation, with the majority of our FY24 content investment weighted to the first half. We are well progressed on implementing our $60 million cost initiative program and are on track to deliver $25 million this year. We expect FY24 cost growth to be limited to 1-2%. We will,
however, revisit the current cost initiatives program if advertising markets remain weak for the remainder of the year and will act decisively to meet such challenges.

“Our investment in ARN Media Limited in November 2023 was a meaningful step to position our business to deliver commercial partnership and collaboration with the market leading radio business in Australia and we continue to monitor industry consolidation.”

The numbers for the half to December 2023:

SWM half year to dec 2023 - from results feb 2024

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