Seven West Media’s half year revenue dips due to ‘weaker advertising market across total TV’

Seven West Media (SWM) first half year earnings for the 2023 financial year show that net profit after income tax, group revenue, and EBITDA all dropped compared to the same period last year.

The media company saw a statutory net profit after income tax of $114.9 million for H1 2023 (compared to $120.5 million last corresponding period) on group revenue of $815.4 million. EBITDA was $205 million, a decrease of 4.8% year-on-year (YoY).

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SWM managing director and CEO, James Warburton, said the results delivered today were strong, “despite tracking against the Tokyo Olympics in the prior year”.

“Despite some of the negative economic commentary, the market has been relatively robust, with growing demand from our core advertisers,” he said.

However, the results report acknowledged that the declining revenue was driven by a weaker advertising market across total TV (metropolitan, regional and BVOD). The group reported 39.3% of total TV revenue share in this half year.

Seven’s Broadcast Video on Demand (BVOD) streaming platform 7plus streamed a total of 6.366 billion in the first half year, with a reported 37% share of catch-up free-to-air market minutes streamed.

Registered and verified users on 7plus finished at 12 million on 31 December 2022.

Warburton added: “Our digital earnings have soared from $3 million in the first half of FY19 to $80 million in the most recent period and digital now accounts for approximately 40% of group earnings. The BVOD market continues to grow strongly, up 18% in CY22, even with the Olympics in CY21.”

James Warburton

Net debt at the end of the half year to December 2022 was $186.4 million, compared to $116.7 million in the last corresponding period. This included the acquisition of Prime Media Group’s assets on 31 December 2021.

Warburton continued: “We’ve been highly disciplined in the bidding for our new sport and content deals, with incremental rights offsetting any increase. 7plus will now feature all content on broadcast with significant upside from the addition of the AFL, cricket and NBCUniversal digital content rights.

“Seven’s content pillars with news, live sport and our strengthening entertainment schedule ensure that Seven will continue to be a dominant player in ratings and grow its revenue share.

“West Australian Newspapers continues to execute its strategy of holding the line on print, turbocharging digital growth and reducing costs.

“The business delivered strong digital audience growth, up 15.9% year-on-year, and digital circulation revenue continued to grow, up 28%. EBITDA declined 11%, which is due to a significant increase in paper costs in the period.

“Seven West Ventures completed a new investment in the period in new disruptive property play, View Media Group, investing $12 million cash and $24 million in media advertising. The current portfolio value stands at $105 million.”

Looking into Seven’s trading in 2023, SWM expects January and February to be weaker than the first half year’s trend, partially due to one-off events. March is set to be better, tracking in line with the total TV trend in the first half year.

Warburton concluded: “We will continue to build a more diversified media organisation to reduce risk and to grow; remain focused on being audience led and digital first, powered by data and tech; and step up our focus on monetising total TV audiences, that is, across broadcast and digital.”

Seven West Media traded at $0.45 on 14 February, the market cap currently sits at $700.62 million.


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