Seven West Media boss warns profits could be down 10% for first half



Seven West media CEO Tim Worner has today warned profits for the six months to December could be down as much as 10 per cent on the same period last year but has promised to slash costs to compensate.

At the company’s AGM this morning Worner pointed to the  “unexpected softness in the television advertising market in the first half and our response to it” as a reason for the drop in profits, saying they now expect the TV ad market to be “flat to slightly negative in the 2015 financial year”.

Pointing to changes he said the company would reduce its cost base, holding cost growth to 1 per cent, as opposed CPI-linked growth of around 2-3 per cent. The company’s half-year profits were $150m last year.

He added: “Advertising revenue trends in our publishing businesses have improved as expected when compared to last year, although these changes are less significant in the West Australian Newspapers business than in Pacific Magazines.

“Looking at the market more generally, we remain comfortable with the full year outlook we gave at our 2014 financial year results presentation, namely: for a continuation of trend in newspapers and an improvement in trend of magazines.

“As a result of the cost reductions, I have referred to, we are revising our cost guidance and now expect growth in group operating costs to be around 1% for the 2015 financial year, down from our previous guidance which was around CPI levels.

“When we put the changes to the market forecasts and the improved cost position together, we remain comfortable that the fully year underlying net profit will be within the range of market estimates.”

Alex Hayes


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.