Seven West Media cost reduction efforts in the second half of financial year 2018 has put the company in a position to return to profit and strengthen commercial ties with other media outlets.
The group – which publishes The West Australian and Perth’s The Sunday Times – managed to reduce net debt by 12.6 per cent, or $634.5 million, in the financial year, just shy of the target of $650 million.
Group operating costs reduced 2.2 per cent to $1.39 billion.
Seven West Media chief executive Tim Worner said: “We are more focused than ever on transforming our company. We are vigorously managing our costs, and we continue to seek greater operational efficiencies right across the group.
“Seven Network, Pacific and WAN, are all set to deliver year-on-year cost reductions. We continue to make these businesses more efficient through headcount savings and by outsourcing services where appropriate.”
Total group revenues were down 3.4 per cent to $1.62 billion during the period, due to declines in the print and television businesses.
Underlying group earnings before interest and tax were down 9.9 per cent to $235.60 from financial year 2017.
Cost reductions within the West Australian Newspaper (WAN) business are on track. In financial year 2018, costs were reduced 4.4 per cent to $183 million, a figure which includes the recently acquired The Sunday Times. Further reductions to the tune of $10 million are projected for next financial year.
Chief financial officer Warwick Lynch noted the advertising difficulties faced by WAN, but said an upward trend in the second half of the financial year improved the publisher’s position. Full year ad revenue was down 9.6 per cent year-on-year.
However, the newspaper group recorded improved circulation revenues of 2.3 per cent on the back of increased cover prices, targeted promotional activities and acquisitions.
Mr Worner said the company was encouraged by signs of improvement in the local market, although that was yet to flow through to advertising, particularly retailers. “In addition, the recently implemented sales structure is delivering an improvement on trend with the rate of revenue decline halving in the second half,” he said.
Digital audiences accessing The Sunday Times and PerthNow increased 51 per cent year-on-year