Seven West Media’s FY22 earnings reveal strongest performance since FY11

Seven West Media released its group earnings for FY ending June 25 2022, reporting a #1 national network spot in ratings and revenue in addition to a group EBITDA of $342 million – the best the network has seen since 2011.

Seven West Media’s FY22 earnings revealed $1,540m in revenue, up 21% since the previous reporting period. 7plus outperformed in a strong BVOD market, with Seven CEO James Warburton noting in an earnings call that looking forward, BVOD was “expected to continue robust growth”.

The results exceeded Group FY22 EBITDA guidance with 35% growth YoY, putting Seven in the top position for revenue share, having captured 39.1% share of the national television advertising market across FY22.

On an earnings call to investors and analysts, Warburton confirmed that 7plus has driven 40% of Q2 22 earnings, with the platform encompassing a market-leading data offering in place that leverages 13 million registered, verified users.

Revenue from Seven Digital grew 93% in the period to $178 million and EBITDA increased 129% to $139 million. 7plus has outperformed the BVOD market, growing 57% year-on-year in a market that increased 47%.

Warburton said that Seven’s “content led strategy and success of news, current affairs and sports programs have taken Seven to #1” in the overall television market.

Seven reported the best EBIDTA for newspapers this year.

“West Australian Newspapers delivered its best financial result since FY17. Digital growth and the full year contribution from the digital platforms revenue more than offset the decline in print. The West Australian is one of the strongest news brands in Australia, with impressive results across both digital and print. Digital subscriptions and audiences continue to show strong growth,” the earnings report read.

Warburton mentioned that the “acquisition of assets including Prime Media Group and the growth of 7Plus have made Seven a market leader”. Integration of Prime Media Group is underway, including the development of revenue synergies.

Net debt at the end of the financial year was $256.5 million, which included the acquisition of Prime Media Group’s assets on 31 December 2021.

Seven had an improved ratings performance in January-June 2022, capturing a robust portion of the total TV advertising market.

Metro free-to-air advertising market revenue grew 8.7% in FY22, with regional free-to-air advertising market increasing 6% in FY22, and BVOD increasing 47%.

Seven’s Q1 results were skewed by the 2022 Commonwealth Games, which were successful across both Seven and 7plus.

Costs have reduced by $200 million over the last 3 years, after the initiation of cost efficiency program in 2019. Operating costs were in line with the guidance provided in this financial period.

Operating costs were delivered at the mid-point of the reported guidance range of between $1.19 billion to $1.21 billion, despite the inflationary environment.

Speaking on the strength and resilience of the television advertising market, Warburton said: “What we’re seeing is an incredibly strong focus forward in terms of Q2, retail’s very strong, all of those primary drivers of free-to-air are strong through the sector. We’re seeing a lot come back in terms of travel, we’re seeing very very strong bookings coming through. A lot of briefs around automotive for the start of the 2023 calendar.

All the agency groups and all the conglomerates we speak to have put out their individual perspective on the market, they’ve all indicated that they’ll be up year on year.”

Seven reported a plan for an on-market share buyback of up to 10% of the Company’s issued capital, which Warbuton said, “will be funded out of existing strategies”.

Looking forward, Warburton said Seven plans “targeting 40% of revenue share of the national total television market in 2024”, in addition to expanding the existing $60 million Seven Ventures portfolio and pursuing value accretive M&A.

Warburton’s strategic guidance aims to “diversify and scale the business to reduce risk and grow.”

Seven’s strategy update also notes an aim to accelerate the digital transformation of 7plus to improve UX and grow consumption.

This topic was discussed on a recent episode of the Mumbrellacast.


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