Seven Earnings Down 10%, Original Content Booms
Seven West Media’s new CEO James Warburton has a tough task ahead of him after the company posted a 10 per cent drop in earnings this morning.
Despite those numbers the company actually lost $444.4 million over the financial year.
Writedowns to the value of Seven’s television licence and The West Australian newspaper formed the bulk of the $573.7 million after tax in “significant items”.
A $16.8 million loss on the sale of its share of Yahoo7 to Verizon also contributed.
Overall revenue dropped 4 per cent to $1.56 billion.
Newly appointed CEO James Warburton took over from Tim Worner last week, bringing his scandal plagued time at the helm to an end.
The coup Worner helped engineer with Foxtel to snatch cricket rights away from Nine could go down as his legacy in the future after the broadcasts “outperformed expectations”.
Combined with the network’s AFL coverage (the audience for which grew 10 per cent year on year), cricket now gives Seven premium sport broadcasting every week of the year.
Seven is looking to content to lead growth, with plans to “explore a meaningful streaming partnership play” hinting at a possible look to cosy up with incoming Disney+ as memories of the failed Presto partnership with Foxtel linger.
Original content has recently proven a winner, with Seven Studios continuing its run of success posting a 7th consecutive year of EBIT growth and increased efficiency.
The Studios returned $90.4 million to company coffers (up 0.9 per cent from last year) off the back of a $31.3 million investment (6.6 per cent less than the year before).
The content library now sits at over 9,000 hours, a useful addition to the 7Plus broadcast-video-on-demand (BVOD) platform.
Things continued to look dire on the publishing front, with West Australian Newspapers revenue falling 9 per cent to $185.8 million and Pacific Magazines falling 7.2 per cent to $129.4 million.
Publishing earnings before income and tax dropped 25.1 per cent to $23 million.
Bean counting razor gangs managed to find $38 million in savings but the company is still carrying more than half a billion in debt.
Maintaining “cost discipline” and “targeting operating savings where prudent” have been identified as a focus in the group outlook for the next financial year.
Seven West Media shares have risen 1.3 per cent in early trade to 39 cents.