Seven West Media has announced its financial year results for 2023. Key takeouts include:
• Seven claims to be #1 national total TV network
• National TV reach driving revenue share (excluding Olympics) and partially offsetting the 7.9% decline in the total TV advertising market.
• On year growth to <1%
• NBCUniversal content driving digital audience growth, on track for two billion minutes annually with step change from digital sports rights (cricket, AFL) commencing in September 2024
• Content, platform and enabling investments ongoing and will drive digital leadership
Results
The group reported revenue of $1.488 million (including share of associates), down 3% on the prior year. The revenue decline primarily reflects a weaker advertising market with the year-on-year decline of 7.9% in the total TV market (metropolitan, regional and BVOD). The inclusion of a full year of regional earnings from Prime as well as an extra week in the first half largely offset the impact of revenue attributable to the Olympics in FY22.
Net debt of $249 million was down slightly from $256 million in the prior period. During the year, the group repurchased $15 million of shares under its on-market buy-back which will continue into FY24. The group has determined that the dividend will remain on hold given prevailing market conditions.
SWM managing director and chief executive officer, James Warburton, said: “We have delivered a solid result for the 2022-23 financial year in what was a challenging environment, primarily driven by the 7.9% decline in the total TV market over FY22. The market decline accelerated during the second half, driven by the macroeconomic environment. Our position as a national TV network and the strength of our digital offering continues to resonate in the market and somewhat mitigated the market decline.”
See Also: Seven’s Half Year Results: Total TV and Digital revenue lead the way
Outlook and Priorities
Trading update and strategic priorities:
Total TV market share and expectations:
• FY24 content schedule optimised to maximise total TV audience
• Targeting 40% + total TV revenue share
• Total TV market expected to stabilise during Q2 once comps ease
Seven’s trading:
• Seven will continue to look for ways to drive efficiency into the business
• Early trading indicates Seven underlying revenue is tracking to FY23 market trend in July and August. Currently pacing slightly ahead of last year in September
Warburton said: “Our strategy is simple but clear: to become the most connected news, sport and entertainment brand in Australia. In order to achieve this, we will accelerate our digital future while enhancing and elevating the Seven brand.”
Comments from James Warburton
Speaking to the results, Warburton further commented:
“Operating costs have been well managed within the context of our continued investment in programming and the ongoing inflationary pressures across our business. Excluding depreciation and amortisation, our costs increased by 1% over the prior year to $1,208 million, which was in line with our most recent guidance and reflecting the benefit of temporary cost savings.
“We are excited to have secured new sport and entertainment deals which underpin our content though 2031 including digital rights which will deliver significant growth in both audience and revenue across total TV. Our deals with the AFL and Cricket Australia are the biggest change in the history of Australian streaming, marking the first time Australia’s number one winter and summer sports will be provided live and free on a streaming platform.
“Our launch of 7Bravo and the NBCUniversal content has progressed well. This content is attracting high-value female audiences. It now represents over 10% of total minutes on 7plus and is on track to deliver over two billion minutes annually.
“Our digital earnings grew 17% on an underlying basis – excluding the Olympics and Commonwealth Games – and we continue to invest in our digital future with a focus on our user experience and adding new innovative features and functionality. Digital earnings now account for more than 49% of group underlying earnings.
“West Australian Newspapers continues to transform its business, with its focus on high quality local editorial driving an increase in digital subscription revenue of 17% during the year. The West Australian news brands now have a collective 4.5 million unique monthly audiences, up 22%. Revenue increased slightly in FY23 driven by an additional week. Despite excellent cost control, the impact of well flagged, significant newsprint increases during the year saw EBITDA decline by 9%.
“Seven West Ventures expanded during the financial year with the finalisation of the investment in View Media Group. The current portfolio value stands at approximately $100 million.”