After a big full-year loss in FY17, Seven West Media (SWM) has returned to profit during the last financial year.
The company posted a net profit of $135.8 million for the 12 months to 30 June 2018 after a net loss of $744.3 million a year earlier.
However, with the exclusion of significant items, SWM’s underlying net profit after tax was down 14.6 per cent to $142.5 million in FY18. Revenue for the group fell 3.4 per cent to $1.6 billion.
SWM’s underlying earnings before interest, taxes, depreciation and amortisation was down 11.7 per cent to $270.9 million.
The company’s broadcast and production division (Seven) saw total revenue fall 1.2 per cent in FY18 to $1.3 billion.
Broadcast and digital advertising, affiliate fees and other revenue was at $1.18 billion for Seven (down 0.7 per cent), with production and distribution (Seven Studios) revenue at $89.6 million (down eight per cent).
SWM’s West Australian newspapers division saw total revenue drop 6.1 per cent last financial year to $204.1 million, with ad revenue at $114.6 million (down 9.6 per cent) and circulation revenue at $61.3 million (up 2.3 per cent).
Pacific Magazines’ total revenue sank 17 per cent in FY18 to $139.5 million, with ad revenue for the division at $37.3 million (down 26.6 per cent) and circulation revenue at $98.1 million (down 11.6 per cent).
Revenue from other SWM from other business and new ventures grew 10 per cent over the 12-month period to $14.2 million.
SWM also announced a five-year extension of its affiliation agreement with Prime Media Group, effective 1 July 2018.
Commenting on the results, SWM chief executive and managing director Tim Worner said the group has maintained a single-minded focus on improving its core business with ratings, revenue and costs savings initiatives the priority.
“I’m pleased to report that we have delivered underlying EBIT at the upper-end of our guidance, we have over-delivered on our cost-out targets and significantly reduced our debt,” he said.
“Our transformation accelerated in the second half of the financial year and delivered $61 million of cost savings on our initial $40 million target. These savings, which included a seven per cent reduction in FTEs, more than offset the anticipated AFL uplift and spectrum charge.
“The transformation will continue in FY19, targeting further cost reductions in each of the three operating businesses and will deliver a $10-20 million net group cost reduction, including cricket.
Worner noted that SWM has delivered a record-breaking ratings performance so far in 2018 and grown its share across every key demo at the expense of its competitors, resulting in a 12th consecutive financial year at number one.
He said this momentum will be further driven by SWM’s historic six-year agreement with Cricket Australia.
“We are executing our strategy at great pace, maintaining our focus on the core to continue to drive a stronger performance in ratings and revenue, while transforming the business to be more lean and agile,” Worner said.
“Growing our studios business, digital assets and investment portfolio underpins growth across the business.
“We very well placed to meet the challenges and capitalise on the opportunities ahead of us.”