Seven records 15 per cent profit drop
Seven West Media chief executive Tim Worner has emphasised the network's upcoming summer cricket coverage and cross-promotion opportunities while posting a 14.6 per cent year-on-year decline in net profit, to $142.5 million down from $166.8 million in 2017.
Mr Worner said the free-to-air metropolitan market as a whole had experienced two consecutive growth halves, noting earnings (before interest and tax) was in the upper end of guidance at $236 million for the year ending June 30.
"We expect growth to continue in the 2019 financial year," Mr Worner said in a statement.
“Throughout the financial year we have maintained a single-minded focus on improving our
core business with ratings, revenue and our costs savings initiatives the priority," he said.
Mr Worner said Seven had "over-delivered" on its cost out targets, and significantly reduced its debt.
“Our transformation accelerated in the second half of the financial year and delivered $61
million of cost savings on our initial $40 million target," he said. The savings "more than offset" an increase in AFL and spectrum costs.
He said there had been "record-breaking ratings performance in the 2018 calendar year to date ... resulting in the twelfth consecutive financial year at number one" and noted the recent re-launch of on-demand app 7plus would help "drive greater monetisation" of content.
Earlier in the year Seven, which includes Pacific Magazines and The West Australian newspaper along with its free-to-air television assets, suspended its dividend to focus on the balance sheet to pay down debt to help position the company to take part in any potential future mergers.
The broadcaster then increased cost-cutting plans to $125 million over the next two years. This didn't stop Mr Worner from signing a $1.2 billion deal with Foxtel/Fox Sports for broadcast rights to six-years of cricket, ending rival free-to-air broadcaster Nine Entertainment Co's stranglehold on the Ashes.
Nine and Fairfax Media (owner of The Sydney Morning Herald and The Age) recently announced plans to merge and form a $4.2 billion media company, ending months of speculation about discussions between the newspaper publisher and Seven. Seven has since ruled out a rival bid.