Seven West Media Posts $1.89 Billion Loss After Major Write Downs

Seven West Media has suffered a $1.89 billion full year loss to June 2015 following major write downs in its TV business Channel Seven by $929 million.

The group’s net loss for the year to June was affected by major writedowns to the value of its TV assets and compared to a $148.19 million net profit for 2013/14.

Excluding those write-downs, the media group’s underlying profits fell 11.5 per cent to $209.1 million as revenue softened 4.7 per cent to just $1.77 billion.

The net loss compares with a $149.2 million profit in financial 2014. The final dividend, payable on October 9, is 4 cents, down from 6 cents in 2014.

Seven’s underlying profit of $209.1 million was in line with its earlier guidance range of $205-$215 million.

Interestingly, Seven was part of the AFL deal yesterday – the biggest in Australian sporting history – and is obliged to pay $840 million in cash and $60 million worth of advertising to secure 3.5 AFL matches per round for its free-to-air TV channel. The six-year deal will begin in 2017.

Seven also said it expected low single digit growth for television advertising over the coming 12 months; however, it predicted improvements in its West Australian newspaper business.

Seven’s CEO Tim Worner said at this morning’s presentation of the results: “We have delivered another robust revenue share performance in what have continued to be challenging market conditions. The advertising market in the financial year grew 3.1 per cent. The metro television market declined 1.6 per cent, due to the softer first half, which was cycling against Federal Election advertising spend in the prior corresponding period. Despite this we have delivered another market leading 40 per cent share of advertising revenue.

“Trends continued in Newspaper advertising, while the advertising revenue trend for Pacific Magazines continued to improve. Yahoo7 pushed on and continues to increase its market share compared to digital publishing peers.

“In terms of our outlook for the coming financial year, our advertising market growth expectations for television are low single digit growth. We are seeing early signs of improvement in display advertising in the Newspaper market and we expect a continuation in trend for magazines,” Worner said.

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