Seven West confronts a $70m loss
The new boss of Seven West Media, Tim Worner, says the television and publishing group is working to overcome weak advertising markets, after posting a $70 million full-year 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.