Seven reported a decrease in revenue and profit year-on-year as it was hit by poor market conditions, as well as there being no Olympics and Commonwealth Games in the 2022/2023 financial year.
- Seven reported a profit drop of 31% year-on-year
- Says it was hit by difficult economic headwinds with overall TV ad revenue down 7.9 per cent YOY
- CEO James Warburton told shareholders that TV market is now a two-player race
In its financial results, released today, the network reported that its profit after tax had dropped 31 per cent year-on-year coming in at $146 million dollars, compared to $ 211 million last year.
Its revenue was also down three per cent year-on-year, falling to $1.488 billion for 2023 financial year, compared to $1.540 billion for the previous year.
Despite the decrease in profits for the financial year ending June, Seven said things are looking to be improving.
Early trading indicates Seven underlying revenue is tracking to FY23 market trend in July and August. It is also currently pacing slightly ahead of last year in September, with Warburton saying that they are 85 per cent booked for the month.
He said the growth in September was largely driven by travel, auto, and insurance. Government spending remains down since Covid and retail and food were also down.
In an earnings call held after the investor presentation, Warburton didn’t hold back in criticising Network 10, saying that the television market is now becoming a “two-player race” with the third player “quickly evaporating” in terms of its share market.
Seven CEO James Warburton said the results were ‘solid’ given the ‘challenging’ economic conditions that the network faced over the 2022-2023 financial year.
Industry body Think TV recently announced that TV advertising revenue was down 7.9 per cent year-on-year due to economic headwinds.
Commenting on the results, Seven West Media managing director and chief executive officer, James Warburton, said: “We have delivered a solid result for the 2022-23 financial year in what was a challenging environment, primarily driven by the 7.9 per cent decline in the total TV market over FY22”.
“The market decline accelerated during the second half, driven by the macroeconomic environment. Our position as a national TV network and the strength of our digital offering continues to resonate in the market and somewhat mitigated the market decline.”
“We achieved our total TV revenue share target of 39 per cent in the first half and in the fourth quarter and we finished the year with a 38.5 per cent 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.”
“Operating costs have been well managed within the context of our continued investment in programming and the ongoing inflationary pressures across our business.”
“Excluding depreciation and amortisation, our costs increased by 1 per cent over the prior year to $1,208 million, which was in line with our most recent guidance and reflecting the benefit of temporary cost savings.”
As well as the difficult economic conditions, Warburton also noted that the previous reporting period (the 2021/2022 financial year) benefited from the Olympics and the Commonwealth Games.
When an analyst asked Warburton if he expected Seven’s future results to be hit by Nine taking up the Olympic games, Warburton said that given the time difference between Paris and Australia, a lot of the big Olympic events will be held at highly unsociable hours.
Commenting on the 2032 Brisbane Games, he also noted that whoever has taken up the games (Nine) will also have to take on the significant costs associated with hosting the event.