Seven earnings down as Worner delivers first results since Harrison scandal revealed
Amid a cloud of controversy surrounding its CEO and his affair with a former executive assistant, Seven West Media has announced a 27.7% drop in earnings before interest and tax on revenues of $905.1m
Tim Worner delivers his first results since sex scandal broke
Reporting its results for the first half of the 2016/2017 financial year, SWM saw group profit plummet 90.8% to $12.4m
EBIT [earnings before tax and interest] has fallen from $205m at the end of the December half in 2015 to $148.5m. Total revenues were up slightly from the previous period.
EBITDA [earnings before interest, tax, depreciation and amortisation] were down from $229.3m to $170.8m.
Highlights for the media company included Seven reporting a 40.8% share in TV advertising revenue, including the third-highest share for revenue from the Olympic Games broadcasts ever, with Rio 2016 coming in behind Sydney 2000 and Beijing 2008.
Audiences for Seven grew 1%, year-on-year.
Seven CEO Tim Worner, who has kept a low profile since the news of his affair with company EA Amber Harrison exploded across the media, leading to him being disciplined by chairman Kerry Stokes, said the result was a strong one, despite the ongoing distractions.
Worner opened the results call saying: “In the last two months there has been much that has been written about and discussed” but he did not want to “give any more oxygen” to things that did happen or “did not happen”.
He said the company and the board had not been distracted and remained focused on the business.
“We are delivering leadership across our media platforms,” Worner said in a statement.
“We are delivering a successful strategy that provides us with a clear, continuous and sustainable plan for growth to 2020 and beyond. We will continue to build our businesses, manage our costs, grow our content production capacity and deliver that content wherever the audience wants to consume it and wherever we can monetise it.”
Worner said SWM will continue to focus on building efficiencies to improve margins.
Revenue for the Seven Network through advertising, affiliate fees and other revenue lifted 4.6% to $648.7m, but EBIT dropped 22.9% to $143m.
However, Seven’s magazine division, Pacific Magazines, continued to suffer from the flight from print by advertisers.
Advertising revenue fell 22.5% to $25.4m, while circulation revenue was down 13.8% to $57.8m.
The drop resulted in the division reporting EBIT of just $1.3m, down 82.8% on the previous year.
Looking forward SWM said while the advertising market “remained soft” it was continuing to focus on reducing costs. It is also continuing its guidance that TV advertising revenue will be down “single digits”.
“However, management has been encouraged to see growth in February and March for the first time since 2014,” the company said.
It also said that it expected to see earnings growth from Pacific and The West in the second half.
The revelation of the affair between Worner and Harrison has continued to be a distraction for Seven, as Harrison took to Twitter to raise allegations against the company before it successfully applied for an injunction against her earlier this week.
More bad news.
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Tim Worner is still the best media operator in the country, regardless of what went on in 2014.
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Wow if the best delivers a group profit down 90.8% then I guess the whole industry is FUBAR?
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Perhaps if they produce any decent content across all their brands they might be able to make some money.
As it is they pay silly prices for events where the margins are so tight they just about break even.
Their digital offering is appalling (member Olympics), literally nothing worth watching on free to air, you could hardly call their news, news it’s just one big promo with some headlines.
If you’ve got shares sell them now, this isn’t going to get any better. This company won’t be around much longer in its current form.
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Glib comment. You are obviously not very business savvy, S.
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I note J you have no facts just an assertion my comment is glib. Oh the irony. If you can’t understand a 90% decrease in profit perhaps you don’t understand business? Why don’t you ask your colleagues at Seven West Media for some help?
And yes it looks like the industry is FUBAR…
http://www.afr.com/business/me.....216-guemu5
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