Seven West Media held its annual AGM on Thursday, with Kerry Stokes AC taking to the stage first for the Chairman’s Address.
“Seven West Media performed well during the year despite a softening of the overall TV and wider advertising market, while our transformation to a broadcast, print and digital business has accelerated,” Stokes told shareholders.
“The Seven Network continues to be the most watched free to air network and digital platform in Australia, reaching and engaging 91% of the population, with a broadcast audience of more than 17 million people a month and more than 13.5 million registered 7plus users.”
Digital
Speaking about the company’s earnings, Stokes said that digital earnings contributed over 49% of Seven’s overall earnings in the 2022-23 the year, and pointed to the new agreement between Seven and NBCUniversal as a highlight.
“The deal sees Seven acquiring and broadcasting NBCU’s scripted network and cable dramas and comedies on Seven and 7plus. Our new broadcast and digital channel 7Bravo is the recipient of unique content and is experiencing a very strong take-up by viewers,” Stokes said.
One of the biggest topics at the 2024 Upfront, Seven’s acquisition of digital streaming rights for AFL and cricket also got a mention from Stokes.
“A key development in the 2022-23 financial year was the signing of new media rights agreements with the Australian Football League and Cricket Australia, ensuring the most popular winter and summer sports will remain on Seven – live and free – for many years to come. Importantly, the new agreements give us digital rights to both sports for the first time.
“The combination of AFL and cricket will give 7plus four billion minutes of new content and change the way sport is watched online.”
AFL Grand Final 2023
VOZ and Prominence
With VOZ already supplying data ahead of its complete rollout, and the announcement of VOZ Streaming, Stokes said that he was “delighted” about the new OzTAM Virtual Australia ratings system.
“The total pool of revenue from this more accurate measurement of audiences is estimated to be worth $6.5 billion and we are confident we will pick up a major share of the incremental revenue in coming years.”
Speaking about the ongoing prominence debate, Stokes told shareholders that “we have worked with the industry and proposed a solution to Government that retains free and prominent carriage of our trusted local TV services on connected TV. We call on the Government to legislate the prominence framework as soon as possible.”
Seven’s Key Financial Results
Following Stokes’ address, managing director and chief executive officer James Warburton took to the stage to provide a financial update, saying that the results “represented a solid performance in a challenging environment.”
James Warburton
The key points were:
• Since FY20, Seven West Media’s cost base has grown for the Prime acquisition and through a combination of investment in content and efficiency at less than 1.5% a year for everything else.
• During FY23, revenue declined 3% to approximately $1.49 billion.
• Excluding depreciation and amortisation, Seven’s costs increased by 0.9% over the prior year to $1.2 billion.
• EBITDA declined 18% to $280 million, and underlying net profit was $146 million.
• Net cash flow before temporary and capital items was $155 million.
• Net debt of $249 million was down slightly from $256 million in the prior period, with prudent leverage of 0.9 times maintained.
“Our strategy is to be Australia’s most connected news, sport and entertainment brand,” Warburton said.
Seven also announced that it has refinanced its syndicated debt facility.
The new facility has been downsized from $600 million to $525 million, and has also increased from three years to a four-year term. Despite recent market movement, funding costs have been held at approximately 2.4% above BBSY.
Warburton, said: “At SWM we 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.
“This refinancing continues a significant partnership with our supportive lender group and reflects SWM’s ongoing progress in transforming the business and reducing debt.”