Seven West confronts a $70m loss
The company fell into the red in 2012-13 due to write-downs on the value of its magazine business, plus redundancy and restructuring costs that totalled about $300 million. The value of Pacific Magazines was reduced by $221 million, and Seven West's investment in the Yahoo!7 digital businesses was also cut by $60 million.
Redundancy and restructure costs totalled $27 million, part of the first phase of a cost-cutting program.
The company has cut staff at The West Australian newspaper, but has offered no details on cuts in other businesses.
The cost cutting program delivered $71 million in benefits in the year, and further benefits are expected to be realised in 2013-14, Seven West Media said.
When one-off items are excluded, Seven West Media's underlying profit was $225 million, down 1 per cent from the year before. That was slightly better than the company had forecast, and its shares were rose 13¢, or 5 per cent, to $2.45. Mr Worner, the former head of Seven Network, said the business had performed well, given lower advertising revenues and the technological changes facing the media industry.
"Our television business continues to lead in both audience share and advertising revenue," he said.
"Our publishing businesses are outperforming their peers in what is a challenging market.
"The company's objective over the coming 12 months is to further strengthen our financial performance in a challenging advertising market."
Pre-tax earnings from television dropped by 3.5 per cent in the 2012-13 financial year to $290 million, despite the company lifting its market share of advertising revenue above 40 per cent.
Newspaper earnings were down more than 25 per cent, to $87 million, and earnings from magazines were down almost 27 per cent, at $29 million.
Mr Worner said the company would focus on ways to grow its business and maintain market share in TV, newspapers and magazines.
Frequently Asked Questions about this Article…
Seven West Media posted a $70 million full-year loss mainly because of large one-off write-downs and restructuring costs. The company reduced the value of Pacific Magazines by $221 million, cut its investment in Yahoo!7 by $60 million, and recorded significant redundancy and restructuring charges that contributed to the loss.
Excluding one-off items, Seven West Media's underlying profit was $225 million, which was down 1% from the prior year and slightly ahead of the company's own forecast.
Investors reacted positively to the result: Seven West Media's shares rose by 13 cents, or about 5%, to $2.45 after the company reported its full-year numbers.
Television pre-tax earnings fell 3.5% to $290 million, although TV lifted its share of advertising revenue to above 40%. Newspaper earnings dropped more than 25% to $87 million, and magazine earnings were down almost 27% to $29 million.
Seven West Media launched a cost-cutting program that included redundancy and restructuring activity. The first phase recorded $27 million in redundancy and restructure costs and the program delivered $71 million in benefits during the year, with further benefits expected in 2013-14.
Yes. The company has cut staff at The West Australian newspaper. Management has not provided details about cuts in other parts of the business.
Tim Worner said Seven West Media is working to overcome weak advertising markets and will focus on growing the business and maintaining market share across television, newspapers and magazines. He noted the TV business continues to lead in audience share and advertising revenue, and that the publishing businesses are outperforming peers in a challenging market.
Watch how advertising markets trend (especially TV ad revenue), progress on the company's cost-cutting program and the realisation of further benefits, updates on underlying profit excluding one-offs, and any further impairment or restructuring announcements. These factors will drive future profitability and share-price performance.
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