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- Seven West Media (SWM) has felt the impacts of COVID-19 over FY20, especially in its advertising market sector
- The company’s FY20 revenue dropped 14 per cent to approximately $1.2 million and its underlying net profit after tax (NPAT) was also down 66 per cent to $40.8 million
- However, the group’s total net loss after tax, including significant items, was just over $200 million — an improvement on FY19’s $327.6 million loss
- Overall, in FY20, SWM’s metropolitan TV advertising market dropped 14.1 per cent, with a substantial 33.7 per cent drop posted in the fourth quarter
- However, Seven West has seen a 30.5 per cent increase in its broadcast video in-demand segment, with advertising revenues up to $162 million
- Over at the West Australian, SWM reported the paper received over 60,000 subscribers in the first 12 months of releasing subscription-based online newspaper
- The company saw an increase in viewers across Channel 7, thanks to reality shows like Big Brother and Farmer Wants a Wife
- On the market this morning, Seven West is down 17.7 per cent and is trading for 12.8 cents per share
Seven West Media (SWM) has felt the impact of COVID-19 over FY20, especially in its advertising market sector.
The COVID-19 pandemic has highly disrupted the media sector, with production delayed, cancellation of sporting events like the Olympics and a significant decline in advertising revenue.
SWM’s revenue dropped 14 per cent to approximately $1.2 million. Its underlying net profit after tax was down 66 per cent to $40.8 million. However, the group’s total net loss after tax, including significant items, was just over $200 million — an improvement on FY19’s $327.6 million loss
Seven West tabled an earnings before interest, taxes, depreciation, and amortisation (EBITDA) of around $129,000, which is a 49 per cent drop from FY19’s nearly $253,000.
Advertising market
Over FY20, the Standard Media Index (SMI) reported the Australian advertising market declined by 15.2 per cent, compared to the last financial year. This was due to advertisers reducing their spend as they grappled with the financial effects of the coronavirus.
Overall, in FY20, SWM’s metropolitan TV advertising market dropped 14.1 per cent, with a substantial 33.7 per cent drop posted in the fourth quarter.
The network only secured a 37.4 per cent free to air share in the financial year, which was impacted by limited sports offerings and an “underperforming entertainment lineup.”
However, SWM says the broadcast video on demand (BVOD) segment continues to grow rapidly, as advertising revenues from online catch-up and live TV streaming were up 30.5 per cent to $162 million, compared to 2019’s result.
The West Australian
The West Australian is a leading publisher in WA, with an average of 1.6 million people in the state reading The West, Sunday Times, thewest.com.au and
PerthNow.com.au, each month.
“In print, The West Australian Monday–Friday edition has the highest market reach of any major metro weekday masthead in the nation, with 21.5 per cent
of West Australians on average reading an issue of the weekday edition,” the company explained.
Seven West Media says The West has been transforming its business model to adapt to the challenges around print media.
Digital subscriptions for the online newspaper were launched in June 2019 and subscriptions are ahead now ahead of the plan. The West currently boasts over 60,000 subscribers.
Podcasting is another new avenue the media business is exploring. This year, The West saw its podcast, ‘Claremont,’ focusing on the Claremont serial killer, net 5.5 million downloads across 119 episodes.
However, economic conditions remained challenging in Western Australia during the financial year.
Revenue for The West declined 10.1 per cent to $167.1 million and EBITDA also declined by 24.4 per cent to $20.4 million during the period. Its earnings before tax increased by 12.7 per cent to $17.7 million.
What’s the upside?
It’s been twelve months since Managing Director and CEO, James Warburton, returned to Seven West and put out a new strategy to transform the company.
“We have made material progress on our transformation plan despite the challenges that COVID-19 has thrown at us. It has not changed our plan but assisted us to accelerate the transformation,” he said.
On Channel 7, the company launched Big Brother in June, which delivered the highest audience share of 25-to-54-year-olds in a decade. This was followed by Farmer Wants a Wife, which has “dramatically improved results for Seven.”
“Combined with our daily content spine which is a dominant number 1 in Sunrise, The Morning Show, 7NEWS, The Chase, Home and Away, Better Homes and Gardens and Sport with the AFL and Horse Racing, our tentpole focus at 7.30pm Sunday to Tuesday is working, helping us win the content battle,” James said.
“Seven has won 10 of the last 11 weeks of ratings,” he added.
“We continue to focus on transforming our business. Our objective is to establish a lean, efficient operating cost base to deliver further savings in the 2021 financial year and I am confident we will deliver our strategy and ambitions for the future,” James said.
“We have significant operating leverage with our lower cost base to provide greater upside on market recovery and drive significant value for our shareholder,” he added.
On the market this morning, Seven West is down 17.7 per cent and is trading for 12.8 cents per share at 10:37 am AEST.
