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. And shareholders will have to wait as the company keeps dividends on hold given "prevailing market conditions".
The media group is continuing to look for ways to drive efficiency but says that the total TV market is expected to stabilise during the December half.
Early trading indicates Seven's underlying revenue is tracking to market trend in July and August, currently pacing slightly ahead of last year in September.
Weakness in the metropolitan free-to-air TV advertising is continuing, overshadowed by economic uncertainty and dipping consumer confidence.
According to numbers released by industry body ThinkTV, metropolitan free-to-air, regional free-to-air and Broadcaster Video on Demand (BVOD) excluding SBS, fell 7.9% to $3.6 billion for the year to June.
“We have delivered a solid result for the 2022-23 financial year in what was a challenging environment,” says CEO James Warburton.
“The market decline accelerated during the second half, driven by the macroeconomic environment.”
Warburton says he’s optimistic into the current financial year and beyond.
“Our owned national reach, our content strategy and our market-leading digital assets underpin our ambition to grow our audience and revenue share,” he says.
“We continue to invest in our digital future and with our solid balance sheet and ongoing investment and cost discipline.
“We are well placed to capitalise on a market improvement, and well placed to compete for a larger share of the total video advertising pool.
“Our strategy is simple but clear: to become the most connected news, sport and entertainment brand in Australia. In order to achieve this, we will accelerate our digital future while enhancing and elevating the Seven brand.”
Warburton says Seven’s position as a national TV network and the strength of the group’s digital offering continues to resonate in the market and has somewhat mitigated the market decline.
“Our content strategy continued with the return of key tentpoles and the introduction of new programming,” he says.
“The programming slate continued to deliver audience consistency and strength, and ensured Seven retained its position as the number one network for national audience share for the third year running.
“We achieved our total TV revenue share target of 39% in the first half and in the fourth quarter and we finished the year with a 38.5% total TV revenue share.
“Our ambition to grow our underlying revenue share (excluding the Olympics and Commonwealth Games) was achieved in each quarter, with a year-on-year underlying gain of 1.2 share points thanks to the quality of our market leading news and public affairs programming, and our stable of long-running Seven productions.
The media group in May told the market it had identified $15 million to $20 million in "new additional temporary cost savings".
Warburton says operating costs have been well managed within the context of continued investment in programming and the ongoing inflationary pressures.
Costs, excluding depreciation and amortisation, increased by 1% to $1.208 billion, in line with recent guidance and reflecting the benefit of temporary cost savings.
“We are excited to have secured new sport and entertainment deals which underpin our content though 2031 including digital rights which will deliver significant growth in both audience and revenue across total TV," he says.
"Our deals with the AFL and Cricket Australia are the biggest change in the history of Australian streaming, marking the first time Australia’s number one winter and summer sports will be provided live and free on a streaming platform.
“Our launch of 7Bravo and the NBCUniversal content has progressed well. This content is attracting high-value female audiences. It now represents over 10% of total minutes on 7plus and is on track to deliver over two billion minutes annually.
“Our digital earnings grew 17% on an underlying basis – excluding the Olympics and Commonwealth Games – and we continue to invest in our digital future with a focus on our user experience and adding new innovative features and functionality. Digital earnings now account for more than 49% of group underlying earnings.
“West Australian Newspapers continues to transform its business, with its focus on high quality local editorial driving an increase in digital subscription revenue of 17% during the year. The West Australian news brands now have a collective 4.5 million unique monthly audiences, up 22%. Revenue increased slightly in FY23 driven by an additional week. Despite excellent cost control, the impact of well flagged, significant newsprint increases during the year saw EBITDA decline by 9%.
“Seven West Ventures expanded during the financial year with the finalisation of the investment in View Media Group. The current portfolio value stands at approximately $100 million.”
A slide from Seven West Media's results presentation:
And the numbers:
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