Seven West Media reports $67m loss as group revenue slips 3.2%

Seven West Media is reporting a $67m loss on a total revenue of $773.3m for the first half of the 2020 financial year and a drop in underlying net profit after tax of 22.5%. The results come amidst tough advertising conditions, pushing the entire free-to-air (FTA) TV market down 7.0% in the half, and a total advertising market decline of 8.5%.

The company isn’t paying dividends to shareholders and has downgraded its projections for the remainder of the financial year.

CEO James Warburton is confident Seven can rally in the latter half of the 2020 financial year, despite setbacks with both the Pacific Magazines sale and the Prime merger

Advertising revenue for television was $491.7m, down from $515.9m in the same half of the 2019 financial year.

CEO James Warburton is still relying on the sale of Pacific Magazines to Bauer Media, which is currently at the mercy of the ACCC, to help right the ship.

“Over the last six months, we have executed on a number of major strategic initiatives, including the investment in our new content strategy for our primetime entertainment schedule which commences in April; a major reorganisation and cost out plan delivering $45m of gross savings; the divestment of Redwave; and proposed sale of Pacific Magazines,” he told the Australian Stock Exchange (ASX).

“The ACCC’s decision on Pacific Magazines is due in April 2020. We continue to work with the ACCC to address their concerns. While management were disappointed that certain stakeholders blocked the Prime Media merger, we have secured a strategic stake of 14.9%. Working down debt remains a key priority with a number of initiatives underway.”

Seven West Media has a net debt of $541.5m, including proceeds from Redwave, the sale of which to Southern Cross Austereo was completed in December 2019. The group has implemented a $45m cost out programme for the second half of the year and FY21.

In television, the network is reporting to be the number one FTA by revenue share for the first half, increasing to 38.8%. Seven is thought to currently be in trouble due to the failing ratings of My Kitchen Rules which may impact its end of year result.

Seven championed its sports offering in the results, reporting the AFL audience for 2019 increased 3% and the test cricket audience by 12.5%. On the flip side, the Big Bash League suffered from low ratings across the summer. Seven noted it is “in discussions with Cricket Australia to review the Big Bash season and product moving forward”.

Promising a big fourth quarter for FY20, Seven said it will bring “several well established, and new and exciting franchises to prime time viewing”. Still on the slate for the network are Big Brother, Farmer Wants a Wife, Holey Moley and Plate of Origin. The network championed a “tentpole investment to launch in Q4 targeting 25-54” in the results.

Earnings before interest and tax declined 25.1% to $108.9m for the Seven business.

Seven’s broadcast video on demand (BVOD) platform 7Plus grew 33% in consumption and 42% in revenue year-on-year, the ASX report said.

Seven’s performance by segment (Click to enlarge)

“We will continue to be creative and apply entrepreneurial thinking. My mandate is to dramatically change the business which means transformative M&A opportunities are very much on the agenda,” said Warburton.

“I believe we have the team, the platform and the strategy to transform and grow this business to increase shareholder value.”


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