Seven swings to FY18 profit
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Seven West Media has swung to a full-year profit for the 2018 financial year, while also announcing a five-year extension to its long-standing program supply agreement with Prime Media Group.
The company posted a net profit of $134.9 million for the year ended June 30, compared with a net loss of $744 million in FY17, when it had been hit by weak ad revenue and a heavy write-off in the carrying value of its television licences.
Annual revenue fell 3.2 per cent to $1.62 billion, from $1.67 billion a year earlier.
The three primary sources of revenue for the group are the Seven Network, The West Australian and Pacific Magazines.
Seven’s revenue fell from $1.28 billion last year to $1.27 billion in FY18, while The West’s revenue declined about $13 million to $204.1 million.
Revenue at Pacific fell from $168 million in FY17 to $139.5 million this year.
Chief executive Tim Worner said the company was focused on improving its core business, with ratings, revenue and cost savings the priority.
“Our transformation accelerated in the second half of the financial year and delivered $61 million of cost savings on our initial $40 million target," Mr Worner said on Tuesday.
Annual underlying earnings fell 9.9 per cent to $235.6 million, at the upper end of its $220-$240 million guidance range, and the media company has forecast five to 10 per cent underlying earnings growth in 2018/19.
Despite the improved bottom line, Seven said its dividend remains suspended to give it financial flexibility.
Meanwhile, Seven said today it has also agreed to terms to extend its long running program supply agreement with Prime Media.
Seven said the agreement recognises current market terms and reflects Seven’s ongoing investment in content and sporting rights.
“Our partnership with Prime, which now runs over 30 years, is one that we value tremendously,” Mr Worner said.
“It delivers great results for both organisations, and ensures millions of viewers in regional and rural Australia can enjoy Seven’s marketleading news, entertainment and sport programming.”
At 1043 AEST, Seven West shares were down 5.5 cents, or 5.2 per cent, to $1.00 in a weak Australian share market.
SEVEN MEDIA RETURNS TO PROFIT
*Net profit of $135.8m vs $744m net loss year ago
*Revenue down 3.2pct to $1.62b
*No final dividend vs two cents dividend last year