Seven reports 240% bump in profit to $125.5m, 7Plus revenue up 78%

Seven West Media has released its full-year results for 2021, headlined by an underlying net profit after tax (NPAT) of $125.5 million, a 240% increase on the previous year.

Group revenue was reported at $1.27 billion, up 3.5% on the prior corresponding period, while Seven reduced its net debt by 40% to $240 million.

Underlying group EBITDA was $253.9 million, up 105%, while EBIT was $227.1 million, a 141% increase. Seven also revealed $200 million in cost and cash savings, resulting in a 7.5% reduction in operating costs. Dividends remain suspended.

Seven FY21 Results [click to enlarge]

Seven West Media managing director and chief executive officer, James Warburton, said: “Our result today reflects the material progress of the changes made over the past two years.

“Since 2019, we have increased EBIT and grown our digital business to over 25% of earnings. We have a new entertainment schedule that is increasing ratings across all key demographics.

“We were the only network to grow commercial audience share across the key demographics in the financial year, which has set us up strongly to monetise this in FY22. At the same time, we have slashed our net debt position by 57% since FY19, giving us a balance sheet to pursue future growth opportunities.”

Seven also reported significant growth in its revenue from its BVOD service 7Plus, up 78% on the prior corresponding period. Digital earnings overall, meanwhile, grew 131% to $60 million.

It was also revealed that the Seven Network Olympics coverage reached 20.2 million Australians, with a record-breaking 4.74 billion minutes streamed on 7Plus.

Warburton pointed to the strong viewing across all platforms during the recent broadcast of the Tokyo 2020 Olympics as proof of the reach and scale of Seven West Media.

“The evolution of the digital and data side of our business has been a core element of our transformation strategy and the results are clear. 7Plus revenue grew 78% in the financial year, outstripping the BVOD advertising market growth of 55%, and 7Plus now has 9.2 million registered users,” he said.

He also hailed Seven’s deals with Google and Facebook as “a landmark milestone” and proof of the “quality and value of our news content”.

In its FY21 report, Seven West Media also updated its outlook, revealing it is now marketing a 40% broadcast share in the second half of 2021.

The salaries of Warburton, as well as other senior Seven West Media executives, were also revealed.

Warburton’s remuneration was just over $7.6 million including share price growth, while chief revenue officer Kurt Burnette took home just under $3.2 million, and commercial director Bruce McWilliam earned just under $2.9 million.

Seven also now expects digital earnings to double to more than $120 million in FY22, while operating expenses in the coming financial year are now expected to be between $1.08 billion to $1.1 billion on a normalised basis, plus $94 million of one-off costs.

Warburton said Seven continues to pursue its three priorities “content-led growth, transformation, and capital structure and M&A” as part of a three-year plan introduced in the second half of 2019.

He said content changes, including a content slate in 2021 that welcomed a host of new formats, will continue to grow revenue share, a “$90 million incremental opportunity.”

“7Plus is also a key focus. We will continue to expand our BVOD offering and examine SVOD options that are viable and make financial sense.

“Cost discipline and addressing onerous content contracts are an ongoing focus for us. This year we will also renegotiate our debt facilities to secure an improved financial position.

“All of this, particularly the improvement in our balance sheet, puts us in an excellent position to work with new partners and/or towards consolidating the media sector. We are pursuing several options in these areas.”

Seven West Media has a current market capitalisation of $661.35 million and a daily share price of $0.45.


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