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MarketScreener Homepage  >  Equities  >  Australian Stock Exchange  >  Seven West Media Limited    SWM   AU000000SWM4

SEVEN WEST MEDIA LIMITED

(SWM)
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Seven West Media : Full Year Financia...

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08/19/2019 | 07:47pm EDT

Tuesday August 20, 2019

Seven West Media releases full year financial results

for year ended 29 June 2019

KEY POINTS

  • Television licence and newspaper masthead carrying values impaired due to softer advertising market conditions. Total significant items of $573.7m net of tax were recorded in the period.
  • Metro TV revenue share grew 0.7% pts to 38.8% in FY19, despite softer ad market
  • Cost discipline delivered $38m reduction in opex, at the upper end of guidance
  • Underlying Group EBIT of $212.1m, down 7.5% YoY excluding 53rd week in FY18
  • Seven Digital grew EBIT 3x to $15m driven by strong BVOD market growth (+32%)
  • Seven Studios delivers $59m EBIT up 5.3%, capitalising on global content growth
  • Seven West Ventures portfolio value grows 24% to $95m
  • Group net debt reduced to $564m with debt facilities refinanced to 2021/2022

The Seven Network has again proven to be Australia's favourite, delivering a 13th consecutive year of ratings leadership, and a 40.3 per cent share of commercial free-to-air viewing across the day - up a full percentage point on last year. Seven was also number one in the key advertising demographic of people aged 25-54 across the day, and grew revenue share across the period.

Channel 7 and 7mate ended the year as the most-watched channel and multichannel respectively.

Seven's Summer of Cricket broke records, growing commercial share in all key demographics throughout the day and in primetime. At year end, the current season's AFL's audiences were up 10 per cent on last year.

Seven's strategy to own and operate its direct to consumer products has resulted in a significant uplift in performance of all its digital assets compared to when they were under the Yahoo7 joint venture.

Streaming platform 7plus is scaling both audience and revenue at a rapid rate, while 7NEWS.com.au has established itself as one of the most-viewed sites in the country just weeks after launch.

Seven Studios is capitalising on the global demand for content by licencing Seven's shows, and signing production and co-production deals, with a wide range of international broadcasters and digital platforms including Netflix, Twitter and Facebook.

…cont over/

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Seven's publications in Western Australia continue to be clear leaders in the local market. The West Australian has undergone a renewal under new creative leadership, resulting in a readership lift of six per cent over the year.

Pacific has delivered market-leading performance in both print circulation and advertising revenue, with digital revenue growing 27 per cent over the period. Costs have reduced by by 7.3 per cent.

Seven West Media has delivered $38 million of net cost reductions in FY19, which reflected savings across all business units and was at the top end of cost-out guidance range of $30- 40 million.

Net debt reduced to $564.4 million at year end, with $72.2m free cash flow generated, improving balance sheet flexibility. Debt is well within covenants.

Seven West Media is forecasting FY20 EBIT of $190 to $200 million, including the impact of new accounting standard AASB 16.

Seven West Media Managing Director and Chief Executive James Warburton said: "FY19 was a tough year in the economy and advertising markets, which impacted Seven West Media's performance.

"But we have incredibly strong assets, and our focus moving forward is to speed up the rate of transformation while exploring opportunities for growth in our core and adjacent markets.

"We will revitalise our entertainment programming, creating momentum to engage heartland Australia and enrich the demographic mix, ensuring we are the most relevant and exciting offer to advertisers.

"We will sharpen our focus on being a high-performance audience and sales led organisation, and we will redefine our working practices, becoming more efficient and effective and making savings which do not impact on ratings.

"We will be a hunter and explore M&A opportunities in both traditional media and non- traditional adjacencies that are positive for our shareholders."

Results

Seven West Media reports a loss after income tax of $444.4 million on total revenue of $1,557.6 million. Underlying net profit after tax was $129.3 million, down 7.9 per cent on the previous year.

EBITDA of $243.6 million and EBIT of $212.1 million were down 10.1 per cent and 10.0 per cent respectively versus the prior corresponding period.

Television licence and newspaper masthead carrying values were impaired due to softer advertising market conditions. Total significant items of $573.7m net of tax were recorded in the period.

…cont over

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Financial Year Results

Year Ended

Year Ended

29 June 2019

30 June 2018**

Total Revenue*

$1,557.6m

$1,622.8m

EBITDA

$243.6m

$270.9m

EBIT

$212.1m

$235.6m

Underlying NPAT

$129.3m

$140.4m

Underlying EPS

8.6 cents

9.3 cents

Final Dividend per Ordinary Share

-

-

Profit (loss) before tax (including significant items)

($433.6m)

$188.8m

Profit (loss) after tax (including significant items)

($444.4m)

$132.8m

Basic EPS

(29.5 cents)

8.8 cents

Diluted EPS

(29.5 cents)

8.8 cents

Reconciliation to statutory results:

Profit before significant items, net finance costs and tax

$212.1m

$235.6m

Net finance costs

$34.7m

$38.3m

Profit before tax excluding significant items

$177.4m

$197.3m

Significant Items

$611.0m

$8.5m

Profit before income tax

$433.6m

$188.8m

* Revenue includes share of equity accounted investees and other income

** Prior year figures have been restated for AASB 9 Financial Instruments standard

Cost Management

Group operating costs (including depreciation and amortisation) of $1,345.5 million was down 3.0 per cent on the previous year, equivalent to a $38m reduction in group operating expense and on the top end of guidance.

Outlook

FY20 outlook:

  • Targeting underlying FY20 Group EBIT to be between $190m - $200m, including impact of new accounting standard AASB 16
  • Maintain cost discipline across the group, targeting operating savings where prudent
  • Metro TV advertising market expected to decline low single digits
  • Expect BVOD market to grow >25%
  • Targeting growth in ratings and revenue share in both broadcast and BVOD
  • Seven Studios to deliver eighth consecutive year of EBIT growth
  • Ongoing focus on improving balance sheet and working down debt

End.

3

For further information contact:

Investor / Analyst:

Media:

Alan Stuart

Stephen Browning

astuart@seven.com.au

stbrowning@seven.com.au

02 8777 7211

0432 961 773

About Seven West Media

Seven West Media (ASX: SWM) is one of Australia's leading integrated media companies, with a market-leading presence in broadcast television, magazine and newspaper publishing and online.

The company is the home to many of Australia's leading media businesses - Seven, 7TWO and 7mate, 7flix, Pacific Magazines, The West Australian and thewest.com.au, The Sunday Times and PerthNow.com.au, and the biggest content brands including My Kitchen Rules, House Rules, Home and Away, Sunrise, the Australian Football League, Cricket, the Olympic Games, Better Homes and Gardens, marie claire, Who, racing.com and 7plus.

4

Disclaimer

Seven West Media Limited published this content on 20 August 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 August 2019 23:46:01 UTC

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Financials (AUD)
Sales 2020 1 423 M
EBIT 2020 145 M
Net income 2020 -56,6 M
Debt 2020 546 M
Yield 2020 -
P/E ratio 2020 -2,29x
P/E ratio 2021 2,97x
EV / Sales2020 0,47x
EV / Sales2021 0,45x
Capitalization 129 M
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Mean consensus HOLD
Number of Analysts 8
Average target price 0,20 AUD
Last Close Price 0,08 AUD
Spread / Highest target 436%
Spread / Average Target 139%
Spread / Lowest Target -10,7%
EPS Revisions
Managers
NameTitle
James R. Warburton Chief Executive Officer & Managing Director
Kerry Matthew Stokes Chairman
Jeffrey Peter Howard Chief Financial Officer
Ryan Kerry Stokes Non-Independent Non-Executive Director
David Evans Independent Non-Executive Director
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