Seven West Media Ended By Rising 3.896%: What Investors Need to Know

  • Oct 30, 2018 AEDT
  • Team Kalkine
Seven West Media Ended By Rising 3.896%: What Investors Need to Know

On October 30, 2018, Seven West Media (ASX: SWM) ended the session at A$0.800 per share which implies that the stock has advanced 3.896%. The analysts are optimistic about the company’s growth moving forward. Today, the stock witnessed robust trading activity. The analysts expect that the company’s earnings for 2018-2019 are expected to witness a rise in the earnings and this increase is also expected by the management of the company. However, the growth potential for the next 5 years is not much appealing. The market trackers are of the view that the company would not be inking a merger deal with the News Corporation. 

Seven West Media ended FY 2018 with total EBIT or earnings before interests and taxes amounting to $236 million which represents that the company has managed to achieve in the upper end of the guidance it had provided. In FY 2018, the company has garnered revenues and other income amounting to $1.6 billion reflecting the YoY decline of 3.4%. However, during the same period, the company generated profit after tax or PAT amounting to $134.9 million while in FY 2017, the loss after tax was $745 million. Its net finance costs witnessed a fall in FY 2018 on the YoY basis.

Seven West Media generated total revenues of $139.5 million in FY 2018 from the Pacific division which implies the substantial rise of 17%. The significant rise of 174.8% YoY was also witnessed in the division’s EBIT to $9.6 million in FY 2018. During the same period, the division’s total costs also rose on YoY basis. However, other business and new ventures division managed to generate total revenues amounting to $14.2 million in FY 2018 which implies the YoY growth of 10%. Total costs of this division also rose on the YoY basis.

Moving forward, the company is expected to maintain its focus on the ratings as well as revenues. The company is also working towards disciplined cost management and the company has been increasing the efforts towards reducing the costs. The company would also be deploying towards the digital tools as the time passes by. It is also focusing to improve its balance sheet so that the necessary flexibility can be achieved.  The company also plans to work towards increasing the market share as it would be entering into new and fresh partnerships with the competitors. However, the management believes that these partnerships would be entered with respect to the business activities which are non-competitive.

Seven West Media expects to work towards reducing the leverage ratio to a level which would be lesser than 2x. Apart from this, the company also expects that the TV advertising market would be witnessing the favourable momentum. It believes that in FY 2019, the digital revenues are expected to witness robust growth momentum.

Seven West Media has a market capitalization of $1.16 billion. The company has an annual dividend yield of 2.6% and the stock price of the company is trading on close to higher side.


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