But it’s predominantly an impairment - we’ve seen similar from other media companies
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Seven West Media full year financial results
for year ended 29 June 2019
KEY POINTS
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Television licence and newspaper masthead carrying values impaired due to softer advertising market conditions. Total significant items of $573.7m net of tax were recorded in the period.
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Metro TV revenue share grew 0.7% pts to 38.8% in FY19, despite softer ad market
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Cost discipline delivered $38m reduction in opex, at the upper end of guidance
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Underlying Group EBIT of $212.1m, down 7.5% YoY excluding 53rd week in FY18
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Seven Digital grew EBIT 3x to $15m driven by strong BVOD market growth (+32%)
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Seven Studios delivers $59m EBIT up 5.3%, capitalising on global content growth
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Seven West Ventures portfolio value grows 24% to $95m
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Group net debt reduced to $564m with debt facilities refinanced to 2021/2022
The Seven Network has again proven to be Australia’s favourite, delivering a 13th consecutive year of ratings leadership, and a 40.3 per cent share of commercial free-to-air viewing across the day – up a full percentage point on last year. Seven was also number one in the key advertising demographic of people aged 25-54 across the day, and grew revenue share across the period.
Channel 7 and 7mate ended the year as the most-watched channel and multichannel respectively.
Seven’s Summer of Cricket broke records, growing commercial share in all key demographics throughout the day and in primetime. At year end, the current season’s AFL’s audiences were up 10 per cent on last year.
Seven’s strategy to own and operate its direct to consumer products has resulted in a significant uplift in performance of all its digital assets compared to when they were under the Yahoo7 joint venture.
Streaming platform 7plus is scaling both audience and revenue at a rapid rate, while 7NEWS.com.au has established itself as one of the most-viewed sites in the country just weeks after launch.
Seven Studios is capitalising on the global demand for content by licencing Seven’s shows, and signing production and co-production deals, with a wide range of international broadcasters and digital platforms including Netflix, Twitter and Facebook.
Seven’s publications in Western Australia continue to be clear leaders in the local market. The West Australian has undergone a renewal under new creative leadership, resulting in a readership lift of six per cent over the year.
Pacific has delivered market-leading performance in both print circulation and advertising revenue, with digital revenue growing 27 per cent over the period. Costs have reduced by by 7.3 per cent.
Seven West Media has delivered $38 million of net cost reductions in FY19, which reflected savings across all business units and was at the top end of cost-out guidance range of $30- 40 million.
Net debt reduced to $564.4 million at year end, with $72.2m free cash flow generated, improving balance sheet flexibility. Debt is well within covenants.
Seven West Media is forecasting FY20 EBIT of $190 to $200 million, including the impact of new accounting standard AASB 16.
Seven West Media Managing Director and Chief Executive James Warburton said: “FY19 was a tough year in the economy and advertising markets, which impacted Seven West Media’s performance.
“But we have incredibly strong assets, and our focus moving forward is to speed up the rate of transformation while exploring opportunities for growth in our core and adjacent markets.
“We will revitalise our entertainment programming, creating momentum to engage heartland Australia and enrich the demographic mix, ensuring we are the most relevant and exciting offer to advertisers.
“We will sharpen our focus on being a high-performance audience and sales led organisation, and we will redefine our working practices, becoming more efficient and effective and making savings which do not impact on ratings.
“We will be a hunter and explore M&A opportunities in both traditional media and non- traditional adjacencies that are positive for our shareholders.”
Results
Seven West Media reports a loss after income tax of $444.4 million on total revenue of
$1,557.6 million. Underlying net profit after tax was $129.3 million, down 7.9 per cent on the previous year.
EBITDA of $243.6 million and EBIT of $212.1 million were down 10.1 per cent and 10.0 per cent respectively versus the prior corresponding period.
Television licence and newspaper masthead carrying values were impaired due to softer advertising market conditions. Total significant items of $573.7m net of tax were recorded in the period.
Cost Management
Group operating costs (including depreciation and amortisation) of $1,345.5 million was down 3.0 per cent on the previous year, equivalent to a $38m reduction in group operating expense and on the top end of guidance.
FY20 outlook:
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Targeting underlying FY20 Group EBIT to be between $190m - $200m, including impact of new accounting standard AASB 16
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Maintain cost discipline across the group, targeting operating savings where prudent
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Metro TV advertising market expected to decline low single digits
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Expect BVOD market to grow >25%
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Targeting growth in ratings and revenue share in both broadcast and BVOD
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Seven Studios to deliver eighth consecutive year of EBIT growth
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Ongoing focus on improving balance sheet and working down debt
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LOL “clear leaders” when they are a monopoly in newspapers.
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Maybe Disney or Comcast would show interested in Seven, especially with them looking at streaming options. Having a highly rated network to go along with streaming would be an advantage. Both would go well with Sevens family image.
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I agree with this:
And News Corp should do the same by banishing Jones from Sky News and their newspapers.
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I honestly think Disney is more likely to do a deal with Nine than Seven these days.
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Why?
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Disney doesn’t need to do a deal with anyone now they have a direct to consumer offering.
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Last I checked, a number of key Disney titles have aired on Nine & 9Go! recently - particularly on Friday & Saturday nights.
There was also Today & Nine News coverage of a new Star Wars attraction at Disneyland back in June, which could’ve been seen as an attempt by the network to butter up Disney.
they’d be crazy if they did - CBS investing in Ten is a bit of an aberration that is the product of circumstance.
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So? Seven still have active rights to Disney, as do 10!
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I agree with @blackbox on his latest podcast. 7 have had a real arrogance and have been complacent for a number of years. Focused too much on being No1 , didn’t innovate during the period and now everything is so tired and not rating that they scrabble to keep face at their position. The latest Sunrise twitter wars are very evident of this and Warner’s axing really shows how bad things are at the network.
I really hope Warbuton will get rid of this toxic arrogant culture within the network.
I really think overall their branding is aged and tired too. The logo is fine, but time to refresh all assets.
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sunrise hasnt rated very well since sam armitage became host and they kciked mel out and seeing pell having a twitter war and people seeing this wont see sunrise having ratings like it used to be ie when it used to be 300,000 . I think warbouton should axe pell and get another ep in who wont act like a child and bring back mel and make sam go to sunday night
What? It’s Number One 
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Still Australia’s number one
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oh your so wrong on every front
not over all it is not. and esp not in every market. yes there are times its a win for sunrise but it is not ever what it used to be. sometimes today takes over in markets where sunrise would always win . People are getting sick of the entertianment breakfast tv and breakfast tv in general.
The tweet that you just shared from Mr Pell does not seem to demonstrate your point
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they only won 22 weeks in sydney and brisbane and nothing elese