Write-downs hit Seven West Media bottom line

Write-downs hit Seven West Media bottom lineA core part of Seven West Media's strategy is to make its content available, anywhere, any screen and at any time, said Seven West chief executive Tim Worner. Photo: News Corp

Seven West Media is looking to reap the benefits from its investments in sport and digital platforms, following a writedown of more than $2 billion, mainly centred around the company’s television assets.

The writedowns forced a full-year loss of $1.89 billion, but once significant items are excluded, the company reported a net profit of $209 million.

While this represents an 11.5 per cent decline from the previous year, the figure is within Seven West’s February guidance range and was complimented by a 28.7 per cent reduction in net debt and an overall reduction in costs by 2.4 per cent.

The TV division increased its share of total company revenue from 71 per cent to 76 per cent, however earnings before interest and tax dropped by 5.1 per cent to $296 million.

The company’s newspaper division, West Australian Newspapers, shrunk to a 17 per cent share of total company revenue, with falling advertising revenue blamed on weaker employment and auto and property markets impacting classifieds.

In the face of a 13.3 per cent year-on-year decline in newspaper advertising revenue, WAN has cut costs by 4.8 per cent. Advertising revenue was down from $193.8 million to $167.9 million.

Circulation revenue was down 7.4 per cent to $61.6 million, from $66.5 million the previous year.

However digital revenue for The West Australian grew 17 per cent and Yahoo7 has seen a growth in daily active users from 2.8 to 3.1 million.

“Distribution and content consumption habits are evolving fast, but great stories really well told will always be the life blood of our business,” Seven West chief executive Tim Worner said.

“There is a significant transition underway across our business, some of the moves we are making will take time, but we believe they will better position us for what will be a very exciting future.

Videos streams on Yahoo7 also jumped 15 per cent to 133 million video streams over the past financial year.

The company’s Pacific Magazines had a 7.9 per cent drop in revenue from $154.4 million to $142.2 million, while the company reduced costs by 8 per cent.

In television, the Seven Network enjoyed its ninth consecutive year at top of the television ratings and continues to have strong international demand for its in-house programs.

The company also outlined new multi-device distribution channels ahead of its extensive 2016 Olympics coverage and the AFL broadcast rights deal signed this week.

As part of a partnership with News Corp and Telstra, Seven will pay $840 million in cash and $60 million in contra advertising to the AFL to broadcast between three and four games per week, as well as exclusive rights to the finals series and the grand final.

Seven’s Rio de Janeiro Olympics coverage will be broadcast online, available on demand and also as a paid subscription offering 36 live streams in two foreign languages

“A core part of our strategy is making our content available, anywhere, any screen and at any time with two key caveats – where it can be measured and incrementally monetised,” Mr Worner said.

The company said subscriber growth for Presto, its joint-venture streaming service with Foxtel, was on track. The company also launched its live streaming app yesterday for content from channels 7, 7mate and 7Two.

Seven West also announced a 4 cents per share dividend, bringing shareholders a total of 10 cents fully franked dividend for the year.

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