No fee funds manager Collins St Value Fund has grabbed a strategic stake in Seven West Media.
The Melbourne-based fund, which charges no ongoing management fees, taking a cut when its investors get a return, now has almost 6% of the media player.
Seven West shares are trading at 17.5 cents each, well down on the year high of 30.75 cents.
In a notice to the ASX, Collins Street says it now has more than 92 million Seven West shares, representing 5.99% of the company.
The market capitalisation of Seven West is currently $269 million, which is below its total debt of $301 million.
However, some analysts value the media group at twice that, which would make the Collins Street a cheap and opportunistic move.
Seven reported revenue down 5% to $1.415 billion for the year to June. Statutory net profit after tax dropped 69% to $45 million. Underlying net profit after tax, after excluding significant items was down 46% to $78 million.
To meet the downturn, the media group plans to accelerate cost cutting following $25 million of savings in the half year to June. This means a $108 million cost-out program into the 2025 financial year.
Seven, like other media groups, is facing a stubbornly low advertising market but this is expected to improve when the economy emerges from the current downturn.
However, analysts say the TV sector remains challenging from both a cyclical and structural perspective.
And Seven West has about 85% of revenue flowing from advertising.
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