Seven West has returned to the black with a result that illustrates the stark contrast in fortunes between broadcast and print operations.
The Perth-based owner of the leading Seven Network, Pacific Magazines and The West Australian declared a profit of $149.2 million, well up on last year’s $69.8 million loss which was hit by large writedowns in the value of its mastheads.
On an operational basis, the company lifted earnings 3.4 per cent to $330.4 million, mostly driven by an improved earnings result from its free-to-air television operation. The final dividend was maintained at 6 cents.
Group revenue declined 1.1 per cent to $1.86 billion but aggressive cost control, particularly in its print operations, helped the group lift its bottom line. Overall, costs fell 0.4 per cent to $1.45 billion.
Much of that pain was felt at The West Australian, where costs were slashed 7.9 per cent, to help counter a dramatic fall in revenue.
As a one newspaper town, The West Australian until recently has appeared more immune to the challenges sweeping the industry than its eastern state rivals, although that now appears to be changing.
Newspaper revenue fell 12.4 per cent to $265.4 million, while earnings before interest and tax dropped an alarming 24 per cent.
The situation was less severe at Pacific Magazines – the publisher of Better Homes and Gardens, Men’s Health and New Idea – which appears to have slowed the decline in revenue to 7.3 per cent from last year’s drop of more than 10 per cent. Earnings before interest and tax, however, dropped more than 30 per cent.
Chief executive Tim Worner reiterated the company’s multimedia push to integrate its newsrooms, a project expected to be completed by the end of this calendar year, and indicated a greater use of video for its online news services.
Seven Network earnings underpinned the group’s performance with a 3 per cent lift in revenue to $1.036 billion, accounting for 70 per cent of the group’s incoming cash.
The company also said it was in “advanced discussions with potential partners to offer a video on demand service”.
“This year has been focussed on laying the foundations for future growth in our business,” Mr Worner said.
“There are a number of exciting developments that I look forward to updating you on in the coming year, such as early progress on HbbTV, which will be launched as Freeview Plus next week.”