Profits halve for Kerry Stokes’ Seven West Media
Kerry Stokes' Seven West has posted an H1 underlying net profit of $63 million, down 49 per cent. Photo: AAP
Kerry Stokes’ Seven West Media has reported a profit slump for the first half of 2023/24 and flagged further cost-cutting measures may be needed.
Underlying net profit after tax fell to $63 million excluding significant items, down 49 per cent on the previous corresponding period ending December 30.
The company, which owns the Seven Network and The West Australian newspaper, saw revenue decline by five per cent to $775 million amid weakening advertising markets.
Earnings before interest, tax, depreciation and amortisation fell 39.4 per cent to $124 million.
Costs also increased by seven per cent compared to the same time last year due to inflation and spending on content, with the company taking a stake in audio venture ARN Media.
The media conglomerate is already looking to cut spending with $60 million in cost-cutting measures to be implemented in the 2024 and 2025 fiscal years.
But chief financial officer and incoming managing director and chief executive Jeff Howard flagged more may be required.
“We will revisit this program if the advertising market remains weak across the remainder of 2024, we will act decisively to respond to any further challenges that arise,” he told an investor briefing on Tuesday.
However, both Howard and outgoing Seven West chief James Warburton said they were confident the ad market would come back, with Mr Warburton offering an upbeat assessment of the company’s position.
“After nearly five years leading Seven West Media, I’m proud to say that the business is set up for the future,” he said.
Once again, Seven West did not hand out a dividend to investors, with the last dividend issued in 2017.
The broadcast video-on-demand market provided one small bright spot with Seven’s audience share growing 16 per cent amid broader market growth of 12 per cent, while Seven grew its share of the total television market to 41 per cent, an increase of 1.7 points.
Seven could potentially take a leading position in the BVOD market, said Warburton, who predicted streaming numbers for the Paris 2024 Olympics would be huge.
Yet the overall television market, which includes metropolitan, regional and BVOD, saw a year-on-year decline of 9.1 per cent, the company said.