Write-downs push Seven into the red
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 business was also cut by $60 million. Redundancy and restructure costs totalled $27 million, as part of the first phase of a cost-cutting program.
The company has cut staff at The West Australian newspaper, but has offered no detail 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 previous year. Its shares rose 13¢ to $2.45.
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Seven West Media posted a $70 million full-year loss mainly because of large write-downs on its magazine business and redundancy and restructuring costs. The company said those one-off items — including cuts to the value of assets — pushed it into the red for 2012–13.
The new boss is Tim Worner. He says the television and publishing group is working to overcome weak advertising markets and is executing cost-cutting measures to stabilise the business after the reported loss.
Seven West Media reduced the value of Pacific Magazines by $221 million and cut its investment in the Yahoo7 digital business by $60 million. Together with redundancy and restructure costs, the one-off items added up to about $300 million.
The company reported $27 million in redundancy and restructure costs as part of the first phase of its cost-cutting programme, and it has also implemented staff cuts at The West Australian newspaper.
Seven West Media said the cost-cutting program delivered $71 million in benefits during the year, and the company expects further benefits to be realised in 2013–14.
Excluding one-off items, Seven West Media's underlying profit was $225 million, which was down 1% from the previous year.
The company's shares rose 13 cents to $2.45 after the results and the cost-cutting announcements were made public.
Investors should watch how effectively Seven West Media executes its cost-cutting program, whether further benefits are realised in 2013–14, any updates on staff or asset reductions beyond The West Australian, and how advertising market conditions affect future revenue and underlying profit.
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