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Seven West Media Limited (ASX:SWM) is a national media business based in Australia. The Company's operations include a television network, magazines, newspapers, radio, and the Internet.
The company has through a release on ASX has declared its 1H results for the half year ended 29 December 2018. For the half year period, the company has posted a statutory profit after income tax of $85.8 million and total revenue of $798.9 million. Underlying net profit after tax was $91.8 million, down 7.8 percent on the previous half year.
The company clocked an EBITDA of $161.5 Mn, witnessing a fall of 8.8 per cent on pcp, & hence reported an EBITDA margin of ~20.2 per cent. The companyâs EBITDA accounted for 89 per cent of the total group's EBITDA for the mentioned period.
Group operating costs (including depreciation and amortisation) came in at $652.1 million, which were effectively flat. The company has undertaken a cost out program of $135 million-$145 million across the 2017-2019 financial years with the aim of a net reduction in costs of $50-60 million after factoring in the new cricket costs, content investment, AFL uplift and spectrum charge. During the period, the companyâs costs increased by 2.0 per cent reflecting cricket costs with savings tilted to the second half. The West and Pacific recorded cost decreases by 9.0 per cent and 6.7 per cent respectively.
At 29 December 2018, the company had net assets of $632.8 million. Group net debt decreased to $589.0 million. The Groupâs debt leverage ratio as on 29 December 2018 was 2.3x EBITDA.
The companyâs strategic priorities remain unchanged, which would be directed towards Focusing on the core, driving greater ratings and revenue share performance going forward. Moreover, transforming the operating model and continuing to identify and extract operational efficiencies and cost savings along with growing new revenue streams would remain the prime focus.
The companyâs financial targets for FY19 includes targeting underlying FY19 Group EBIT growth of 0-5% and sticking upon its cost optimisation program which is anticipated to deliver $30-40m of net group savings in FY19. The leverage ratio is expected to fall below 2x at the end of FY19
The company expects an improved second-half trend but expect a low single-digit decline in metro TV ad market for the financial year. The management feels that BVOD viewing share will grow Sevenâs digital revenue by 50% going forward.
SWMâs stock is currently trading at a price of $0.52, down by 7.965% during the dayâs trade with a market capitalisation of ~$852.04 Mn. The counter opened the day at $ 0.530, which was also the dayâs high and touched the dayâs low of $ 0.500 with a daily volume of ~17,809,010. The stock has provided a Year Till Date return of 6.60% & also posted returns of -46.95%, -21.53% & 2.73% over the past six months, three & one-months period respectively. It had a 52-week high price of $ 1.110 and touched 52 weeks low of $ 0.490, with an average volume of 4,045,591 approximately.
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