Seven West cuts debt: investors question why no dividends since 2018
Seven West Media chairman Kerry Stokes told shareholders the company will retain a “conservative approach” as he copped questions about the ongoing lack of dividends.
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Seven West Media, controlled by Perth billionaire Kerry Stokes, has told shareholders the company will retain a “conservative approach” to its balance sheet as it announced a reduction in debt and acknowledged investor pressure to resume dividend payments.
Speaking via a video link due to a Covid diagnosis, Chairman Mr Stokes told the SWM annual general meeting that it would continue to balance shareholder desire for returns, with a need to have enough funds to continue investing in digital projects and content development.
“We understand the desire from our shareholders to see a resumption of dividends… we are constantly monitoring our capital management options and will act in the best interests of the company and all shareholders…. above all, our objective around any dividend decision is that it will be sustainable,” said Mr Stokes.
SWM owns the Seven Network, 7plus, 7NEWS.com.au, and The West Australian newspaper. It’s also recently launched a new community sport live-streaming program, Streamer, which will be rolled out nationally next year, and is reported to be starting a new national news platform.
The company’s failure to pay dividends led to a number of online questions at the AGM and a comment by one shareholder present, who complained the share price and dividend had dropped by about 93 per cent.
SWM has not paid a dividend since 2018 as it tries to tackle a difficult trading period for free-to-air television and newspapers while ensuring it remains relevant in the digital space.
In answer to the questions on dividends, SWM director Ryan Stokes said it will be actively considered ahead of every full and half year result.
“The board shares your passion to see the performance of the company continue to improve,” Ryan Stokes said.
“We are comparing ourselves with how effectively we are competing and what share we are taking in that market and how much we turn that into profit.”
On Thursday the company announced a new four year debt facility of $525m, lower than the previous $600m facility, with funding costs remaining at about 2.4 per cent above BBSW.
SWM Managing Director and Chief Executive Officer, James Warburton, said the company would “continue to deliver on our ambition to be Australia’s most connected news, sport and entertainment brand. While we accelerate our digital future, partnering for growth is one of our key priorities.”
SWM produced a subdued set of full year earnings in August, with a 31 per cent drop in net profit to $145.7m, dragged down by a weak television market despite record viewers tuning in to watch the Matildas football team compete in the FIFA Women’s World Cup.
In a trading update given on Thursday the company said first quarter Total TV growth was slightly ahead of the market, which was down 8 per cent year on year, with revenue share “the strongest ever non-Olympics quarter for Seven.”
Total Television revenue share was the strongest ever non-Olympics quarter for Seven. The company has found $60m in cost cutting measures for full year 2024-25.
UBS retained a “neutral” rating on SWM, writing in a research note that “macro continues to be the key uncertainty with SWMs commentary on second quarter ad markets... showing minimal signs of improvement at this point.”
SWM shares fell 3.5 per cent during trade to 28 cents on Thursday.
At the AGM there was some pushback against the re-election to the board of chairman Kerry Stokes, who suffered a 10.64 vote against him via proxies, while fellow board members Teresa Dyson and Michael Ziegelaar also suffered 8.65 per cent and 8.57 per cent votes against their re-election via proxies as well.
The company did not field any questions from shareholders about Ben Roberts-Smith, the former soldier who was appointed general manager of Seven Queensland in 2015 and who lost a major defamation case last year. He had already left the employment of SWM by the time of the ruling but had the financial support of Kerry Stokes for a period of time.
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Originally published as Seven West cuts debt: investors question why no dividends since 2018
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