Seven West Media's revenue fell for the half year to December but the media group lifted net profit while cutting expenses and slashing debt.
The company reported a statutory net profit after income tax of $116.4 million on group revenue of $644.2 million, down almost 10%.
Underlying net profit after tax -- excluding significant items -- was $86.6 million, an increase of 26.5% on the same six months the year before.
Costs were sliced 17.5% to $493.7 million and net debt cut by 42% to $329 million.
The company says the market is showing positive signs of recovery with strong growth with positive forward bookings.
“Seven is set up to benefit from the recovery underway in the advertising market," says CEO James Warburton.
"Our new content line-up is drawing larger audiences and, importantly, improving our demographic mix in prime time. We are determined to monetise those results in 2021 and are targeting a material increase in revenue share."
Warburton described the half year result as a "strong performance" with significant progress in the transformation strategy.
“This has been a very big year for Seven, with several major milestones achieved as we continue to re-position the business," he says.
“Our new content strategy is firing, with a significantly improved ratings share and a more attractive demographic profile.
"We secured the leading share of audiences in broadcast and BVOD in the half. Our new tent poles are delivering on average 75% more audience than the old content strategy. This will translate to higher revenue share in the coming 12 months.
“The market is showing positive signs of recovery with strong growth in the second quarter and forward bookings are looking positive for the third quarter."
Warburton says the company's digital transformation can be seen in the success of 7plus, with its revenue inn the six month up 79% compared to market growth of 44%.
Seven’s total digital EBIT (earnings before interest and taxes) grew 168% to $32 million in the half year.
Cost cutting is on track to $170 million plus another another $30 million in cash savings have been identified.
“At WAN, the team has undertaken a significant transformation, accelerating digital growth, cutting operating costs and executing a strategy to stabilise earnings and generate cash," says Warburton.
“Improving Seven West Media’s balance sheet has been one of our company’s key objectives over the past 12 months.
“We have made significant progress in addressing this, with a 42% reduction in net debt year on year – ahead of our plan at the beginning of the financial year. We have also retired $150 million of debt since the end of the half year.
“This significantly improved financial position has provided us greater optionality in our asset sale processes to ensure we maximise value for our shareholders."
- Television advertising markets remain buoyant after a solid Q2
- Early bookings indicate Seven’s Q3 revenue could be 7% to 10% ahead of prior year
- Q4 too early to call, albeit against a soft COVID-19 impacted comparative period
- Targeting improved revenue share in the 2022 financial year on the back of stronger audience share.
- Annual operating expenses infor the full financial year 2021 to be at the bottom end of analyst range of $1.03 billion to $1.05 billion (excluding net one-off temporary benefit of $17 million)
The half year to December 2020 results:
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