Seven West Media Limited has unveiled its financial results for the year ending 30 June 2024, revealing a difficult year marked by declining advertising revenues and increased operational costs. Despite these challenges, the company has managed to slightly grow its audience and expand its market share.
For FY24, Seven West Media’s total revenue stood at $1,415 million, a decrease of 5 per cent compared to FY23. The decline reflects a broader 8.2 per cent contraction in the total TV advertising market. Notably, the second half of the fiscal year saw a moderated decline of 7.2 per cent compared to a 9.1 per cent drop in the first half.
The company’s operating costs increased by 2 per cent to $1,228 million. However, costs were significantly reduced by 4 per cent in the second half of FY24 compared to the previous year, driven by the initial phase of a cost reduction program, which saved $25 million. Despite these efforts, EBITDA dropped significantly by 33 per cent to $187 million, and net cash flow before temporary and capital items fell by 65 per cent to $54 million.
The statutory net profit after tax plummeted by 69 per cent to $45 million, while the underlying net profit, excluding significant items, decreased by 46 per cent to $78 million. The net debt increased to $301 million, influenced by the investment in ARN Media Limited, though the net debt was reduced by $15 million when excluding this investment.
In television, Seven West Media achieved a 40.2 per cent share of the total TV market, up 1.7 percentage points year-on-year. This share growth was driven by targeted content investments and resulted in a 6 per cent decline in TV revenue to $1,240 million. The TV sector experienced a 35 per cent drop in EBITDA, reflecting both the revenue decline and higher costs.
The West, the company’s publishing division, reported a revenue of $172 million, maintaining stability through digital growth and commercial printing. Despite flat advertising revenue and a 3 per cent decline in circulation revenue, The West’s digital platforms showed promising growth, with 4.54 million users and 59.5 million monthly page views. EBITDA for The West was down 13 per cent to $27 million due to cost increases.
In response to the challenging market conditions, Seven West Media has implemented a new operating model set to commence in FY25. This model will structure the company into three divisions—television, digital, and The West—each responsible for driving profitability and efficiency. The goal is to enhance digital revenue streams and better capitalise on the BVOD and broader digital advertising market.
Jeff Howard, managing director and CEO, emphasised the need for strategic cost management and revenue growth despite market difficulties. He highlighted ongoing efforts to capture a greater share of available advertising dollars and an anticipated boost in digital revenue from new sports rights contracts, including cricket and AFL.
“FY24 is a tough result for SWM in a challenging market. While growth in audience and revenue share partially offset the impact of the weak market, cost growth of 2 per cent contributed to our EBITDA decline of 33 per cent, reflecting the operating leverage in our business. Following delivery of $25 million of cost out initiatives in 2H, we have taken decisive action to materially increase the program into FY25 to give SWM a platform to drive improved performance,” Howard said.
“The continued weak economic environment contributed to an 8.2 per cent decline in the total TV advertising market on FY23. SWM was able to partially offset this decline by
increasing our revenue share of the total TV market to 40.2 per cent. This share growth was built on the targeted content investments made. The Group was able to partially offset these investments through the implementation of $25 million of cost reductions in the 2H under the program announced at the FY23 AGM”.
“SWM continues to deliver market-leading content across our linear and digital platforms that engaged and grew audiences during FY24. We achieved solid growth in
our BVOD audience during the year, but we are still to fully capture the revenue opportunity,” said Howard. “We are committed to driving improved profit and cash flow irrespective of market conditions. Despite the advertising environment, we are focusing on capturing a greater proportion of available dollars in each market, including a step change in our digital revenue performance. FY25 revenue will include the benefit of digital rights under the new cricket and AFL sports contracts. We have also implemented an enhanced cost-out program that will deliver a year-on-year decline in costs in FY25”.
Seven West Media’s FY24 results underscore the significant impact of a soft advertising market on its financial performance. The company’s efforts to mitigate these challenges through cost reduction and strategic investments in digital content are crucial as it navigates a competitive media landscape. The new operating model and focus on digital revenue are key to its strategy for recovery and growth in the upcoming fiscal year.
