- Total TV Market Revenue Share: 40.2%, up 1.7 percentage points on the prior year.
- Group Revenue: $1.4 billion, down 5% on FY23.
- Operating Cost Growth: 2%, in line with guidance.
- Cost Reduction Savings: $25 million in the second half, 4% decline in costs versus the same period in FY23.
- Group EBITDA Before Significant Items: $187 million, down 33% on FY23.
- Statutory Net Profit After Tax: $45 million, down 69% on FY23.
- Underlying Net Profit After Tax: $78 million, down 46% on FY23.
- Television Revenue: $1.24 billion, down 6%.
- Advertising Revenue Decline: $84 million, or 7%.
- BVOD Market Growth: 12.7%.
- Minutes Consumed on 7plus: Increased by 39%.
- Television Operating Costs: $1.068 billion, up 2% on FY23.
- Television EBITDA: Fell $93 million or 35% for the year.
- The West Revenue: Up 1% in FY24.
- Advertising Revenue for The West: Flat year on year.
- Circulation Revenue for The West: Down 3%.
- EBITDA Decline for The West: 13% on FY23.
- Statutory Profit After Tax: $45 million, down 69% on FY23.
- Basic Earnings Per Share: $0.29, down 69% on FY23.
- Net Profit Excluding Significant Items: $78 million, down 47%.
- Underlying EPS: $0.051.
- Cash Flow Before Temporary and Capital Items: $54 million for the year.
- Net Debt: $301 million, an increase of $52 million from June '23.
- Closing Leverage: 1.6x.
Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Seven West Media Ltd (ASX:SWM, Financial) achieved a total TV market revenue share of 40.2%, up 1.7 percentage points from the previous year.
- Strong audience growth on 7plus, with minutes viewed increasing by 39% year-over-year.
- Successful launch of new digital platforms, including The Nightly and the 7NEWS.com.au app.
- Cost growth was contained at 2%, in line with guidance, and a cost-out program delivered $25 million in savings in the second half.
- The West division saw a 1% revenue increase and continued growth in digital subscribers, with total digital audiences reaching 4.5 million.
Negative Points
- Group revenue of $1.4 billion was down 5% compared to FY23.
- Group EBITDA before significant items fell by 33% to $187 million.
- Statutory net profit after tax dropped by 69% to $45 million.
- Television revenue declined by 6%, driven by a 7% drop in advertising revenue.
- The total TV advertising market declined by 8.2%, impacting overall revenue.
Q & A Highlights
Seven West Media Ltd (ASX:SWM) Earnings Call Highlights
Q: Can you talk to the share impact of the Olympics and provide a share target for the year?
A: Historically, the Olympics have shifted a share point or two to the holder. We expect market growth and share decline to balance out. While we anticipate share growth, we haven't set a specific target yet.
Q: Is the 4% to 5% decline in September and October for total TV operations? Are you seeing BVOD growth offsetting linear declines?
A: Yes, the decline is for total TV. BVOD is growing, especially with events like the AFL Grand Final and Cricket season, but overall, we see a 4% to 5% decline compared to last year.
Q: How do you balance the need for cost reduction with minimizing revenue impact?
A: We focus on maintaining editorial and content quality while making tough calls to reduce costs. The goal is to drive content quality and efficiency without compromising revenue.
Q: Can you provide details on share gains across metro, BVOD, and regional markets?
A: We saw good growth in metro markets, with share gains across all three categories. Metro performed slightly better than BVOD and regional.
Q: What are your thoughts on renewing content deals with Google and Meta?
A: We are in good conversations with Google, with a couple of years left on the deal. Meta's situation is more complex due to government inquiries, but we are actively engaged.
Q: How are you planning to better monetize your BVOD asset, 7plus?
A: We are revising our go-to-market strategy and launching the Phoenix trading platform to improve inventory management. Despite a 39% increase in minutes viewed, BVOD revenue was up only 10%, indicating significant growth potential.
Q: What is the impact of content cost inflation?
A: We face inflationary pressures across the business, particularly in content costs. We manage this by optimizing costs and making strategic content decisions, such as with Australian Idol.
Q: Are there any more restructuring costs related to your cost-out program?
A: We have provided for a chunk of it at the end of FY24. If we expand the program further, additional restructuring costs may be incurred, but currently, no more are identified.
Q: How are BVOD yields performing, and what is the difference between live and on-demand yields?
A: We aim to maintain or slightly improve BVOD yields. Live sport, such as the upcoming Cricket season, is expected to drive significant results in terms of minutes and monetization.
Q: Is Seven West Media considering entering the SVOD space?
A: We are not actively pursuing SVOD but recognize the complementary potential of subscriber-based revenue streams, particularly for our publishing assets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
