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Highlights
- Seven West Media leverages digital growth in a tough ad market.
- Audience gains on 7plus and sports broadcasts boost revenue.
- Planned cost cuts to strengthen financial stability.
Seven West Media (ASX:SWM) recently shared a trading update as part of its 2024 Annual General Meeting, addressing key challenges and strategic initiatives in the face of a slow advertising market. Chairman Kerry Stokes and CEO Jeff Howard discussed the company's vision to strengthen its digital media presence while fostering robust audience engagement across various platforms, including television and digital streaming.
Stokes outlined the hurdles facing the media industry, citing slow advertising growth and regulatory pressures as key challenges. Despite these obstacles, Seven West Media has managed to maintain a strong viewer base, reaching 17 million people monthly across its broadcast and digital platforms. The company's focus on popular sports events, especially the Australian Football League (AFL) and cricket, has significantly bolstered audience engagement. Notably, the 2024 AFL Grand Final attracted a record-breaking streaming audience for the game, underscoring the power of sports content in driving viewership.
CEO Jeff Howard elaborated on Seven West Media’s strategic shift toward building a more efficient, digitally focused business model. To adapt to changing viewer habits, the company has streamlined operations, focusing on enhancing performance and digital engagement. Over the past year, the company's total broadcast audience has seen a growth of 0.5%, while its digital platform, 7plus, recorded a remarkable 39% increase in streaming activity, highlighting a successful shift toward digital content consumption.
The financial landscape, however, posed challenges, with group revenue decreasing by 5% to $1.415 billion. This dip was primarily driven by an 8.2% decline in the television advertising market, reflective of broader economic constraints. As a result, statutory net profit after tax dropped to $45 million, a 69% decrease from the previous year, while underlying net profit reached $78 million, marking a 46% reduction.
Seven West Media's recent initiatives also include the introduction of a digital newspaper, The Nightly, which attracted over 2.5 million unique users each month within its first seven months. This new digital venture, alongside 7plus's AI-enhanced content offerings, showcases the company’s commitment to innovation in digital media. The exclusive content on 7plus has further enhanced user engagement, supporting Seven's goal to provide a seamless digital experience.
Looking ahead, Seven West Media anticipates a revenue decline of around 6.5% year-over-year for the first half of FY25. Adjusting for one-off events like the FIFA Women’s World Cup and the Paris Olympics, the decline is expected to moderate to approximately 1%. To navigate this economic landscape, the company aims to cut costs by $20 to $30 million in FY25, ensuring greater financial resilience while continuing to invest in innovative content and digital expansion.
