Seven West Media is poised to benefit from a recovery in the advertising market, says CEO James Warburton.
And he has his eyes set on increasing his network's share of ad spend.
"Seven is set up to benefit from the recovery underway in the advertising market," he told analysts when releasing half year results.
"Our new content line-up is drawing larger audiences and, importantly, improving our demographic mix in prime time.
"We are determined to monetise those results in 2021 and are targeting a material increase in revenue share.
“7plus was the #1 commercial free-to-air TV platform in 2020 and we’re targeting the #1 revenue share spot as well."
The company reported a statutory net profit after income tax for the half year to December of $116.4 million on group revenue of $644.2 million, down almost 10%.
Underlying net profit after tax -- excluding significant items -- was $86.6 million, an increase of 26.5% on the same six months the year before.
And revenue is lifting, with Warburton describing the television advertising market as "buoyant".
Early bookings indicate Seven’s March quarter revenue could be 7-10% ahead of the same three months in 2020.
" Q4 (June quarter) remains too early to call, but is up against a softer comparative period," he says.
A slide from Warburton's results presentation:
“FY21 will see an incremental $30 million cash saving, further lowering our cash expenses and increasing leverage to the market recovery," says Warburton.
"We will continue to maintain a sharp focus on operating costs, including onerous sports contracts.
“We have addressed our content strategy and cost base to provide a path to debt reduction.
"While this continues, we believe that media consolidation and a focus on building a bigger and better business is still our major priority.
“We are positioning Seven West Media to win. This will ensure that we have the ability to lead market consolidation."
Warburton says he's targeting improved revenue share in the financial year starting in July on the back of stronger audience share 2021.
He calculates that a 1% movement in market share means $21 million in EBIT(earnings before interest and taxes).
"Our new content strategy is firing, with a significantly improved ratings share and a more attractive demographic profile," he says.
"We secured the leading share of audiences in broadcast and BVOD in the half. Our new tent poles are delivering on average 75% more audience than the old content strategy. This will translate to higher revenue share in the coming 12 months."
Plans for the year ahead:
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