Turnaround result in FY 18: Seven West Media Ltd.’s (ASX: SWM) stock traded flat post an initial fall of 3.29% on August 21, 2018 though the company for 2018 reported a net profit of $135.8 million compared to a net loss of $744 million in FY17. In 2017, the company was affected by weak ad revenue and a heavy write-off in the carrying value of its television licences. However, in 2018, the annual revenue fell by 3.2% to $1.62 billion.
SWM has delivered for 2018, the underlying EBIT of $236 million, which is at upper end of $220-240 million guidance. The company has over-delivered on cost saving target with group costs down more of $21 million on the initial $40 million target. These savings include a 7% reduction in FTEs, which more than offsets the expected AFL uplift and spectrum charge. The transformation is expected to continue in FY19, targeting further cost reductions in each of the three operating businesses and is expected to deliver a $10-20 million net group cost reduction, including Cricket for 2019. The company for FY 19 is projecting 5-10% underlying EBIT growth. Further, in 2019, net debt is expected to reduce leverage below 2x. As a result, SWM stock has risen 45.89% in three months as on August 20, 2018.
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