Seven West (ASX: SWM) aims to reduce costs by leveraging technology

Highlights

• Seven west Media is an ASX-listed media group which operates multiple brands
• In 1QFY24, the company recorded an increase its TV share to 42.2%, compared to 38.5% in FY23
• Seven Group Holdings Limited has nearly 39.83% shareholding in the company

Seven West Media Limited (ASX:SWM) is an integrated media firm with an existence in content production across broadcast digital, publishing and television. Its media business includes Seven Network and its affiliated channels. Moreover, the company operates multiple brands like Sunrise, 7NEWS, Framer Wants a Wife, SAS Australia, and Big Brother.

The AUD 357.32 million market cap firm saw an increase in its total TV market share to 42.2% in the first quarter of the financial year 2024 (1QFY24) from 38.5% in FY23. When compared to the market, which declined by 8% during the reported period, the company was slightly ahead of it.

In FY23, the company witnessed a 3.38% YoY fall in total revenue at AUD 1,488 million, as the TV market recorded an annual fall of 7.9%. The digital earnings increased by 17% YoY, excluding Commonwealth and Olympics games in FY23. With this, digital has more than 49% contribution in underlying earnings. During the reported period, the company recorded a 22.89% YoY decline in EBIT to AUD 238.27 million, while NPAT fell by 31% YoY to AUD 145.75 million.

Top 10 shareholders of SWM

The top 10 shareholders of SWM have nearly 63.56% shareholding in the company, while the top four have around 52.56% shareholding. The top two shareholders in the company are   Seven Group Holdings Limited and Spheria Asset Management Pty Limited, with a shareholding of ~39.83% and ~5.06%, respectively.

Recent business update

On 13 November 2023, SWM informed that it had bought 14.9% stake in ARN Media Limited (ASX:A1N) as a strategic equity investment in the media sector.

Moreover, the company inked a deal with Barrenjoey Markets Pty Limited to acquire a further 5% interest in A1N. The company said that it has an existing and long-standing commercial partnership with A1N.

Outlook

The company is committed to elevating its digital assets and is harnessing technology to minimize costs. Its partnerships with AWS, Databricks and NBCUniversal are few examples that portray its intent to minimize costs by harnessing technology.

SWM has secured all its major sports deals until 2031.

For FY24, the company targets 40% TV market revenue share. In 2QFY24, the advertising market conditions are forecasted to be similar to 1QFY24.

Share performance of SWM

SWM shares closed flat at AUD 0.25 apiece on 1 December 2023. In the past one year, SWM’s share price has declined by 41.18% and in the last three months, it has decreased by 19.35%.

The 52-week high of SWM is AUD 0.48, recorded on 7 February 2023, while the 52-week low is AUD 0.22, recorded on 23 November 2023.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 1 December 2023. The reference data in this report has been partly sourced from EODHD/Others.

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