Seven West Media plans cost cutting to meet a weaker television advertising market.
The media group today reported flat revenue and a dip in profits for the half year to December.
The company says early indications suggest the television market may fall mid to high single digits in the half year to June but said visibility was "limited" at this stage.
BVOD was expected to maintain double digital growth and Seven expects to grow total TV share. Total TV revenue share was 39.3% in the six months to December.
The company has identified $15 million to $20 million cost savings to offset market conditions. And dividends are on hold.
Seven West today reported half year results, including a statutory net profit after income tax of $114.9 million on revenue of $815.4 million, down 0.5%.
Underlying net profit after tax (excluding significant items) fell 4.1% to $123.4 million
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 4.8% to $205. Earnings before interest and tax of dropped 9% to $185.1 million.
Net debt at the end of the half year was $186.4 million, which included the acquisition of Prime Media Group’s assets.
CEO James Warburton, said: “We have established the dominant national total TV business; we are delivering on share and revenue; and we have a fast-growing digital business that has growth underpinned for the future with major new deals.
"The big moves we have made in the past six months set the foundations for the network and 7plus for years to come.
"We’ve been highly disciplined in the bidding for our new sport and content deals, with incremental rights offsetting any increase. 7plus will now feature all content on broadcast with significant upside from the addition of the AFL, Cricket and NBCUniversal digital content rights.
"Seven’s content pillars with news, live sport and our strengthening entertainment schedule ensure that Seven will continue to be a dominant player in ratings and grow its revenue share.
"The results we have delivered today are strong, despite tracking against the Tokyo Olympics in the prior year. Revenue is relatively flat year-on-year at $815 million; expenses have been controlled tightly despite the inflationary environment, up only 1%; and our net debt continues to decline. We also commenced our capital management program during the half with our on-market buy back.
“Seven was the #1 network across calendar 2022 and won 38 of the 52 weeks.
“That success was driven by our content-led growth strategy, the re-vitalisation of our entertainment content schedule in recent years; our market-leading sport content including the AFL; and the ongoing dominance of 7NEWS, Sunrise, Home and Away and our multi channels. The latter, of course, became stronger with the addition of 7Bravo last month.
“In the first five weeks of the 2023 calendar year, we had our most competitive start to a year in total people since 2018 in terms of audience share and our best start in 25 to 54s since 2019.
“Our digital earnings have soared from $3 million in the first half of FY19 to $80 million in the most recent period and digital now accounts for approximately 40% of group earnings. The BVOD market continues to grow strongly, up 18% in CY22, even with the Olympics in CY21.
"We expect our share of this market to grow significantly from the new digital content and sports rights secured.
“In October 2022, we announced a multi-year content agreement with NBCUniversal, one of the world’s leading entertainment and media companies. The agreement is bringing thousands of hours of additional content to the Seven Network and 7plus, creating significant new revenue opportunities. The agreement also enabled the launch of a new, female-skewed channel, 7Bravo, on free-to-air and 7plus on 15 January this year.
“7Bravo has made a positive start and the NBCU content accounted for three of the top 25 BVOD shows overall in the first few weeks of launch."
The numbers for the half year to December:
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