Shares in Seven West Media hit a record low of 14 cents as the company revealed a 69 percent slump in earnings for the year to June.
Seven West Media (SWM) reported an earnings decline of 69 percent for the year to June, which sent its share price to a record low of 14 cents. For the ninth year running, shareholders will receive no dividend.
Seven’s total TV revenue share increased by 1.7 percent over the year, to 40.2 percent. This helped offset its market decline, with share growth achieved in every quarter.
While full-year costs were up 2 percent, costs in the second half of the 2024 financial year were percent lower than the prior corresponding half-year.
After the market had time to absorb the shock, the value briefly saw gains, reaching 16.5 cents on Aug. 14, up 6.5 percent.
Despite the slight recovery, however, the SWM share price remains down 59 percent over 12 months.
The business consists of the Seven Network and its affiliate channels—7two, 7mate, 7flix and 7Bravo—the broadcast video-on-demand platform 7plus; online sites 7NEWS.com.au, the nightly.com.au and perthnow.com.au; and newspaper titles The West Australian (which also has its own paywalled website), The Sunday Times, and 19 regional publications in Western Australia.
It reported $45 million (US$30 million) in net profit for the year, negatively affected by falling advertising sales and $44 million in one-off charges, including restructuring costs and write-downs of the value of TV programs (which is now an annual entry in its accounts).
Revenue dropped 5 percent to $1.42 billion as ad bookings declined across Seven’s channels, in common with the rest of the TV industry.
Setting aside the one-off charges, profit still fell 46 percent to $78 million and operating earnings before significant charges fell a third to $187 million.
Earnings at Perth-based newspaper The West rose 1 percent to $172 million, but operating earnings fell 13 percent to $27 million.
Hopes Pinned on Sports to Increase Revenues
CEO Jeff Howard admitted FY 2024 was “a tough result for SWM in a challenging market” and warned that more than $650 million cut from free-to-air television advertising spending was unlikely to ever return.
“Following delivery of $25 million of cost out initiatives in [the second half of the financial year], we have taken decisive action to materially increase the program into FY25 to give SWM a platform to drive improved performance,” he said.
“Despite the advertising environment, we are focusing on capturing a greater proportion of available dollars in each market including a step change in our digital revenue performance. FY 2025 revenue will include the benefit of digital rights under the new cricket and AFL sport contracts.”
The cost out program will see costs decline in FY25 to a range of $1.2 billion to $1.21 billion. That is on top of around $60 million in cuts that had previously announced across the business.
Seven is facing a series of scandals after a former employee alleged the company paid for drugs and prostitutes to secure an interview with Bruce Lehrmann.
Seven denies this and says it has sacked people whose behaviour didn’t reflect the company’s values.
The Seven West Media Annual General Meeting will be held on Nov. 7 2024.