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Earnings fall 54% at Seven as the FTA market drops 14.1%

Seven West Media saw its earnings before interest and taxes (EBIT) fall 54% for the 2020 financial year – $98.654m from $212.812m for FY19. The business reports the free to air (FTA) broadcast market dropped 14.1% across the period, compared to 15.2% for the overall advertising market.

The fourth quarter alone saw FTA fall 33.7%. The business reported a net profit after tax (NPAT) loss of $200m, an improvement from last year’s $327.5m loss.

CEO James Warburton, who has now had a year in the top role after coming into SWM shortly before its FY19 results, said the business was well on its way with the transformation he had been planning since his arrival.

SWM’s overall results FY20 [click to enlarge]

“It’s been twelve months since I returned to Seven West Media and laid out our new strategy to transform the company,” he said.

“We have made material progress on our transformation plan despite the challenges that COVID-19 has thrown at us. It has not changed our plan, but assisted us to accelerate the transformation.

“Our content-led growth strategy which launched in June with Big Brother and was followed by Farmer Wants a Wife is delivering dramatically improved results for Seven. Combined with our daily content spine which is a dominant number one in Sunrise, The Morning Show, 7NEWS, The Chase, Home and Away, Better Homes and Gardens and sport with the AFL and horse racing, our tentpole focus at 7,30pm Sunday to Tuesday is working, helping us win the content battle.”

SWM’s total people broadcast share [click to enlarge]

Warburton went on to say change has happened at The West, Seven’s West Australian newspaper arm, where the regional and community mastheads have pivoted to focus on digital, seeing subscribers double to 60,000 over the 12 months.

Seven has also brought in $170m of gross cost out initiatives across the group, including the renegotiation of the AFL agreement and $51m in temporary savings related to COVID-19. It sold off several assets, including Pacific Magazines, across the year and has flagged interest in divesting more.

Total revenue across the group was $1.228bn, down from $1.428bn in FY19. No dividend was paid for the period.

Seven is anticipating market conditions to remain volatile for the first quarter of FY21, but reports the rate of decline has already begun to moderate. It will not be providing an earnings guide for FY21 at this time.

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