Seven CEO James Warburton rules out returning $33.4m of JobKeeper subsidies
Seven CEO James Warburton says the company won’t be returning JobKeeper money, despite the media group returning to profit.
Seven West Media chief executive James Warburton has ruled out returning $33.4m of federal government JobKeeper subsidies, despite the Kerry Stokes-controlled media group returning to profit.
Mr Warburton says the business qualified for the $130bn JobKeeper scheme last year, which helped the free-to-air television network and newspaper publisher ride out the coronavirus crisis.
“I think from our perspective we qualified for JobKeeper in accordance with the program, and it did its job,” Mr Warburton said.
“We would have had to retrench or sack 120 or 150 people. Staff took a 20 per cent pay cut, which contributed to liquidity in the business through the time and we employ hundreds and hundreds of people in terms of production.
“So for us, it helps us emerge as a stronger, larger taxpayer, let alone what we’ve paid in tax over the last sort of nine to 10 years. So that’s exactly what the program was intended for, and that’s been the use.”
The decision comes after furniture retailer Nick Scali did an about-face on keeping $3.6m in JobKeeper and wage subsidies following staunch criticism after posting a 90 per cent jump in first-half profit and almost doubled its dividend.
Other companies like Super Retail Group and Domino’s Pizza have returned JobKeeper funds. However, retailers including billionaire Solomon Lew’s Premier Investments, which owns several chains including Smiggle and Just Jeans, have declined to give wages subsidies back despite stellar earnings.
Seven also received $2.5m from the Morrison government under its $50m Public Interest News Gathering program to help media company’s during the COVID-19 crisis.
The group received $35.9m in total government grants for the six months to December 26, according to Seven’s half-year financial report lodged with the ASX on Monday.
Seven reported a statutory net profit of $116.4m for the first six months of the 2021 financial year, from a net loss of $49.4m a year earlier, as part of Mr Warburton’s restructuring plans.
Excluding significant items, Seven’s costs dropped 17.5 per cent to $493.7m as Mr Warburton cut spending across the group as well as temporary net cost savings related to COVID-19.
Seven recorded significant items of $41.5m before tax, which primarily relate to the reversal of “onerous contracts” related to the delayed Olympic Games and an international production company.
The group also revealed it slashed its net debt by 42 per cent to $329m.
Mr Warburton’s turnaround plans including new shows such as Big Brother and Farmer Wants A Wife are starting to deliver results, just as the metropolitan free-to-air television advertising market bounces back strongly.
Seven said the metro free-to-air-TV ad market rose 0.6 per cent in the six months to December, with the second quarter recording a hefty 17 per cent jump.
The group also announced a surprise news content deal with Google, as the federal government’s mandatory news media bargaining code looks set to become law.
Seven’s newspapers and digital news sites, which include The West Australian, Broome Advertiser, 7 NEWS and PerthNow, are expected to feature on Google’s News Showcase product, which launched in Australia earlier this month.
No dividend was declared, in line with recent years.
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