Seven West Media swings back to profit
Seven West Media has swung to a full-year profit as the television broadcaster and magazine publisher reported an increased market share in 2018 and higher-than-expected cost savings.
The company posted a net profit of $135.8 million for the year ended June 30, compared to a net loss of $744 million in 2016/17, when it had been hit by weak ad revenue and a heavy write-off in the carrying value of its television licences.
Annual revenue fell 3.2 per cent to $1.62 billion, from $1.67 billion a year earlier.
Chief executive Tim Worner says the company maintained a "single-minded focus" on improving its core business with ratings, revenue and cost savings the priority.
"Our transformation accelerated in the second half of the financial year and delivered $61 million of cost savings on our initial $40 million target," Mr Worner said on Tuesday.
The group - which includes Seven Network, Pacific Magazines and The West Australian newspaper - said its cost cutting program is on target to deliver net group cost savings between $10 million and 20 million in 2018/19.
Seven Network's broadcast of the Commonwealth Games earlier this year helped attract and keep viewers tuned in, Mr Worner said during the group's annual earnings results briefing.
"There's no question that it was a circuit breaker for us, it allowed us to relaunch shows like My Kitchen Rules but also shows like Sunrise, Seven News in particular in Sydney and Brisbane and the rest of the entertainment schedule have simply been a lot stronger since the Commonwealth Games," he said.
The company is planning a television cricket blitz over the summer after splashing $450 million in April to buy the broadcast rights to Australian test matches as well as the men and women's Big Bash Leagues.
"Too much cricket is never enough," Mr Worner said.
Annual underlying earnings fell 9.9 per cent to $235.6 million, at the upper end of its $220-$240 million guidance range, and the media company has forecast five to 10 per cent underlying earnings growth in 2018/19.
Seven Network - the group's biggest division - reported a 13.5 per cent drop in underlying earnings to $216 million as revenue fell 1.2 per cent and costs rose 1.7 per cent.
Underlying earnings at its newspaper operations fell 19 per cent to $21.1 million on the back of lower revenue.
Seven West expects to wrap up the previously announced divestment of its 50 per stake in online media group Yahoo7 to US partner Oath by October, and will launch its new digital news and sport products early next year.
Despite the improved bottom line, Seven said its dividend remains suspended to give it financial flexibility.
At 1445 AEST, Seven West shares were down 1.25 cents, or 1.2 per cent, to $1.0525 in a weak Australian share market.
SEVEN MEDIA RETURNS TO PROFIT
*Net profit of $135.8m vs $744m net loss year ago
*Revenue down 3.2pct to $1.62b
*No final dividend vs two cents dividend last year
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