Seven West Media is optimistic about the advertising market for the rest of this year but is prepared to cut costs if necessary.
The market is still a short one, with cautious brands in an uncertain economic climate, but Seven’s television advertising bookings for September are, so far, coming in better than in 2022.
Analysts are being cautious, describing the early positive signs for a rebound as "faint".
CEO James Warburton says the market decline accelerated during the half year to June, driven by the macroeconomic environment.
However, he says Seven's position as a national TV network and the strength of its digital offering continues to resonate in the market and "somewhat mitigated" the market decline.
“We are very comfortable and on a bit of a roll with our ratings at the moment and our share growth,” he told analysts in a briefing on results for the year to June. “And we think we can continue that.
“We're also banking … on how the market after a downturn always rebounds.
“We obviously will continue to look at levers (including costs) ... should the market deteriorate.”
Seven West Media revenue fell 3% to $1.488 billion in the year to June as the television market was battered by economic winds. Profit was down 31% to $145.75 million.
The media group is continuing to look for ways to drive efficiency but says that the total TV market, down 7.9% in the 2023 financial year, is expected to stabilise.
Early trading indicates Seven's underlying revenue is tracking to 2023 financial year market trends in July and August.
And September is pacing "slightly" ahead of last year.
That, if the trend continues, could set the network up for a good December quarter.
“From September point of view, we're about 85% booked into September,” Warburton said during the analyst briefing in response to a question from investment bank Jefferies.
“So we've obviously got very great clarity in terms of where that's heading. But the market is short.
“We're seeing travel, auto, insurance, communications and entertainment trending up quite well with a good outlook.
“And then we're seeing government support back which you'd expect from the COVID highs. Retail is stagnating a bit, again off COVID highs.
“Wagering is moving away a bit, probably in light of some of the sort of the noise out there around regulation.
“And food has been a little bit more sporadic.”
Seven is targeting a better than 40% total TV revenue share.
The network says it hit 39% in the first half of the 2023 financial year and in the June quarter.
The underlying share was 1.2 share points better over the financial year to June.
“It's becoming even more … a two player market,” says Warburton. “The third player (Paramount) is evaporating relatively quickly from a share perspective.
“We're probably also taking a small bite out of nine. The big two are going head to head and the third player … falling by the wayside and getting weaker.”
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