Seven West Media has this morning announced a 48 per cent jump to $128.7 million in underlying net profit after tax for the half year to December 2021 on the back of a buoyant ad market and successful Summer Olympics coverage.
The media company – still crowing from winning the 2021’s ratings – reported earnings before interest, tax, depreciation and amortisation of $215.3 million for the half year, which was an increase of 31 per cent.
Revenue was up 27 per cent to $819.5 million driven by a recovery in the ad market and its online video service, 7Plus. The fiscal half included the Tokyo Olympics, which delivered record television ratings for the network.
As of December 25, the company had net debt of $116.7 million. Net debt following the transaction with Prime Media Group is $240.9 million.
Seven shares closed at 74 cents each on Monday evening. The company has not declared an interim dividend
Highlights of today’s numbers included:
Commenting on the numbers, Seven West Media managing director and CEO, James Warburton (main photo), said: “This result reflects the successful execution of our strategy over the past 30 months. We have a television network that has returned to the number one position in a robust advertising market; a fast-growing digital business that now makes up 35 per cent of earnings; a turnaround at WAN; and a team focused on growth.
“We have completed the acquisition of the assets of Prime Media Group, which unlocks an unrivalled opportunity for the business to capture a greater share of the $3.8 billion total television market.
“The balance sheet has been significantly strengthened over the past 18 months, with leverage now at 0.9x net debt/EBITDA on a pro-forma basis after the acquisition of Prime. The Board will assess capital management options during the second half to further enhance shareholder value.
“We had an amazing start to the financial year with the Olympic Games Tokyo 2020, which was the biggest television and streaming event in Australian history. The Voice exceeded our expectations, becoming the #1 regular series of 2021, while the AFL Grand Final was the #1 program of the year. Our new entertainment schedule is driving television ratings gains and significant growth for 7plus. Over 11 million users are now registered on 7plus and we expect this to grow further with the Winter Olympics in Beijing.
“Seven returned to the #1 position in ratings leadership for the fiscal half and the 2021 calendar year, which was a significant achievement. The TV advertising market was very strong throughout the year. For the six months to 31 December, the markets were up 13 per cent in metropolitan, 7.2 per cent in regional and 58 per cent in BVOD. SWM outperformed the market growth in every segment. In the metropolitan market, our 40.3 per cent share was in line with our forecast.
“After growing 144 per cent this half to $76 million, Seven Digital is on track to deliver EBITDA of more than $130 million for the full year, or approximately 40 per cent of group EBITDA. The transformation of the digital side of our business has been dramatic, with a step change in the sophistication of our platforms, our data and how we monetise these audiences. This half also marked the first contribution from the digital platforms payments for our news content.
“WAN continues to execute its strategy of holding the line on print, reducing costs and turbo- charging the digital and subscription side of its business. Revenue growth in digital more than offset print decline in the period. Underlying EBITDA grew 65% in the period after excluding one-off benefits for JobKeeper and PING grants in the prior period.
“Seven West Ventures has strong momentum, completing six investments in the period, including four new companies with large addressable markets. The investments are predominantly via media for equity which can be supercharged by SWM’s assets. The portfolio value increased 56 per cent to $87 million in the period,” Warburton said.