★★★★★ 0/5

Seven returns to profit, further cuts to come.

Seven West Media has posted a half-year profit of $100m, but suspends shareholder dividends.

5
Leave a comment

Seven West Media has posted a half-year profit of $100.7 million but suspended dividends in a move designed to pay down its debt and take part in media mergers.

In its interim financial results for half year ended 30 December, the company reported earnings of between $220 million and $240 million, despite revenue in the last six months of 2017 dropping 10.4 per cent to $809 million. Operating expenses fell 13.8 per cent in the period and net debt was reduced to $711 million.

Seven flagged a further $20 million in cuts to $125 million across 2017-18 and 2018-19, hoping to cut its debt to $650 million by the end of June.

The biggest savings will come from $25 million worth of job cuts in Seven’s television business and $50 million in one-off sports rights costs, including the 2018 Commonwealth Games.

“The return to growth in the FTA (free-to-air) advertising market has been encouraging,” CEO Tim Worner said.

“2018 will see us capitalise on our proven ability to grow and deliver strong FTA and online audiences, featuring the 2018 Winter Olympics, the Commonwealth Games in April and AFL. The recent successful launch of 7plus provides us the platform to greater monetise audiences for our content whenever and wherever they want to consume it.”

But he also conceded 2017 was not Seven’s best year.

“It was a tough year, our toughest in recent history…we are very unhappy with the result and have taken appropriate steps,” he said.

“We’ve definitely targeted that second half as an area we can do better, we’ve commissioned more content for that second half.”

Worner rejected speculation he would be leaving Seven after June 30, with rumours his contract had not yet been renewed.

“There seems to be more interest in it than at my house. Regardless it’s a rolling contract with 12 months notice either side. And believe you me I talk with Kerry Stokes all the time.”

Seven will also exit its Pyrmont headquarters this year to its current site at Media City in Eveleigh.

Source: West Australian, AFR.

5 Responses

  1. $25M worth of job cuts, but I bet their executive team will get big fat bonuses

    It’s the world of the haves and have nots – and the way we reward the haves like the Seven executive group is stop watching the rubbish they produce

  2. IMO a reduced dividend would have better pleased their shareholders. There must be a good reason to pay off debt when interest rates are so low. Commissioning more content whilst reducing costs is a difficult balancing act.
    It seems that many FTA Networks are selling off their real-estate and moving to smaller premises in a lower rent district. A sign of the times.

  4. Next AFL negotiation will be interesting! don’t think Foxtel and Seven will just handover $Billions$ they will push the AFL to lower their target price JMHO.

    1. I think next AFL rights (2023-?) will be very interesting.
      I think Ten will bid for these rights combined with CBS All Access.

      Maybe streaming services will bid too.

Leave a Reply