Media equity experts have lauded Seven West for the robust financials it announced to investors yesterday, stating that Seven West will continue to lead free-to-air pack.
Seven West stocks spiked by 15% adding nearly $300 million to its value, broadly reflecting the strong guidance of the company recently as it emerges from a difficult trading period.
Justin Diddams (pictured), an equity analyst at Citi Bank, told B&T that the strong share performance, added to no earnings downgrade, came as a significant relief to investors.
“Seven West’s presentation yesterday demonstrated a level of professionalism that maybe we haven’t seen in the past,” said Diddams, adding that Seven West’s sales boss, Kurt Burnette, spoke bullishly about the current ad market.
“The company has shown a commitment to focusing on their business and were able to provide confirmation that they're on track for cost saving targets, which is another positive. They demonstrated that they’re definitely leading the pack of FTA players in terms of embracing digital and getting to grips with changing media landscape,” he added.
Credit Suisse said that Seven West’s strategies were “well formulated, focusing on content and the consumer”, while it praised the company’s senior management as “energetic and motivated to execute these strategies and aware of structural issues facing the sector”.
Credit Suisse added that it’s confident that Seven West can deliver strong results through to the end of the year, even predicting a potential improvement in the final quarter.
“Seven West is aware of the structural changes facing its businesses and is repositioning itself to be more agile and capture additional revenue streams without compromising content or the consumer (or profitability),” said Credit Suisse.
It also said Seven West appears driven to extend its revenue share lead through investing in areas where it has competitive advantage-in-house production studio, multiple news sources across business units, strong brands which can extend across platforms, digital solutions and transactions-whilst also retaining a focus on cost.
“Print is focused on developing new revenue streams-an essential strategy given the continued structural pressure on ad revenues. We remain conservative in our forecasts given the magnitude of the revenue offset from these new verticals is unknown. In short term, cost reduction is likely to continue to provide some relief," said Credit Suisse