Seven predicts FY22 digital earnings to double, highlights BVOD growth in trading update
Seven West Media (SWM) has issued a trading update in which the company highlighted positive trading conditions in the fourth quarter of FY21.
The update, shared with the ASX and authorised by the SWM board, included an admission that the beginning of the 2021 calendar year was “the riskiest period in the schedule” for SWM, and acknowledged that new unknown formats [Holey Moley and Ultimate Tag] had “mixed success”.
Since then, Seven has built significant momentum in linear television audience and share, the update said. The network won the most recent ratings week despite State Of Origin taking place on Nine, delivering it a seventh consecutive network share win for the year.
The trading update pointed to SWM winning TV revenue share for linear in April, adding: “SWM is highly confident in Seven’s schedule for the next six months, with proven and successful formats and Olympic Games Tokyo 2020 and the Ashes Test series.”
In terms of specific trading figures Seven now estimates its advertising revenue including BVOD will grow more than 45% Q4 of FY21.
Leading up to the Olympics, where Seven hopes to have eight million registered users on its 7Plus platform, registered users on the platform grew 62% in the financial year-to-date (compared to overall market growth in BVOD subscribers of 50.7%).
In terms of earnings, the trading update revealed Seven expects its digital earnings to contribute EBITDA of more than $60 million, up 130%, while digital earnings are expected to double next financial year.
SWM said cost control remains “an ongoing focus… with costs expected to come in line with guidance at the lower end of the range”, but admitted there will be incremental costs from Olympic Games Tokyo 2020 and the Ashes Test series in FY22.
Underlying EBITDA is now expected to be between $250 million and $255 million in FY21, including temporary benefits outlined in H21 results. Net debt is expected to come in between $240 million and $250 million.
SWM’s share price is currently at $0.40 down from a six-month high of $0.58 in February. SWM will release its full-year FY21 results in August.
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Zanda Wilson was a reporter and podcast producer at Mumbrella, specialising in radio reporting. He left Mumbrella in September 2021.
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