Seven West Media shares plunge on half-year profit drop
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More news: Shares in Seven West Media were down 11% by 11:45am AEDT, after the media group reported a 53% drop in profit for the first half of the financial year.
UBS analysts commented that EBITDA, down 39.4% year on year, was 10% off expectations. Net profit, however, was in line with expectations owing to content reinvestment during the first half.
Seven's key positive was the performance of its broadcast video on demand service, which saw a 12.5% lift in the six months to December 2023 and is expected to maintain double digit growth.
Seven boss upbeat on audience growth, AI deals
More news: Seven chief executive and managing director James Warburton was upbeat on the return of TV advertising off the back of Seven’s audience growth, despite sustained softness in the market.
Warburton told analysts that the arrival of audience measurement system, VOZ, and ongoing consolidation in the market stand to benefit the company, after it took a position in ARN Media late last year.
What they said: “No matter what the naysayers claim, VOZ is demonstrating that free-to-air is growing, driven by the two biggest networks, and people are spending longer watching our content across multiple streams,” Warburton said. “This will drive advertising dollars back to TV.”
He also said the company was exploring its options as it pursues commercial agreements for the use of its content to train generative AI algorithms, as earlier reported by Capital Brief.
“We’re exploring avenues through direct engagement with the digital platforms while also considering regulatory options, including seeking copyright reform or a solution under competition law,” he said.
Seven West Media reports 53% half-yearly profit drop
The news: Seven West Media reported a 53% drop in profit for the first half of the financial year, as revenue was hit by a decline in the TV advertising market.
The numbers: The media group recorded a statutory profit after tax of $54 million compared to $115 million from the previous corresponding period.
Its EBITDA was $124.2 million, down 39.4% year on year. Excluding significant items, half-year profit after tax was 49.3% lower at $62.5 million. Revenue dropped 4.8% to $775.7 million.
The context: Seven attributed the dip in revenue to a downturn in TV advertising, referring to findings by ThinkTV that total television advertising decreased by 10.4% in the last calendar year. However, the group said it was able to partially offset the impacts by growing its share of the market by 1.7% in the first half.
Elsewhere, Seven's West Australian newspapers monthly audience figures were up 18.5% in the past year as a result of new commercial print opportunities but with higher costs.
In November, Seven announced the acquisition of a near-20% stake in ARN Media, becoming the ASX-listed radio company's largest shareholder. A month later, the group confirmed the appointment of Jeff Howard as incoming managing director and CEO, succeeding James Warburton, who will step down later this year.
The source: ASX announcement
