Profit plunges at Seven West Media in sector battered by tough ad market

The Kerry Stokes’ backed media company is hurting from a tough advertising market and the impact from major sporting events.

Ryan Stokes and Kerry Stokes at Seven West Media’s AGM last year. Picture: Joseph Lam

Kerry Stokes’ backed Seven West Media is hurting from a grim advertising market and the impact from major sporting events.

The group’s earnings dropped 26 per cent to $92m for the six months to December 31, with revenue down 6 per cent to $727m.

The broadcaster and publisher has pointed to an “ongoing soft [ad] market” and the impact of major sporting events as impacting the result.

Things investors might cling to include an improved ad share for Seven – up 0.5 points to 41.5 per cent – a drop in costs and continued lowering of net debt.

In making comparisons to recent performance, Seven noted the FIFA Women’s World Cup fell in the first half of fiscal 2024, while Nine drained sector ad dollars for the Paris Olympics in this half year.

Chief executive Jeff Howard says the results “reflect the ongoing soft total TV advertising market and the impact of major one-off sporting events”.

“Mitigating the full impact of these revenue headwinds was an increase in our total TV revenue share to 41.5 per cent (up 0.5 points) and the benefits of our year-on-year operating cost savings initiates.

“Seven’s total TV audiences are up 1.5 per cent year-on-year excluding these one-off sporting events. Our content strategy successfully mitigated the Olympic Games impact in the first quarter, and the launch of 7plus Sport commencing with the AFL Grand Final drove a step change in audiences as the first half progressed.”

Mr Howard said total TV remains strong and more relevant than ever, with 43 per cent audience growth on 7plus more than offsetting the decline in linear audiences of 1.8 per cent.

Mr Howard took over from former CEO James Warburton less than 12 months ago, following a stint as chief financial officer.

The fall in revenue despite the audience increase suggests Seven may have been too hasty to let former chief commercial officer Kurt Burnette go last year. The company recently filled the role by appointing former ad agency chief Henry Tajer.

Commenting on the outlook, the company indicated third quarter ad bookings are “tracking up low single digits” and that it should be able to benefit from AFL growth and the federal election.

Growing AFL revenue could be a challenge in 2025 given that Seven has no Saturday AFL for much of the year, with the Foxtel Group having exclusivity for Fox Sports and Kayo customers.

Seven West Media share closed up 3 per cent to 16c on the ASX on Monday.