Seven West Media upgrades guidance for second time in three months

Kerry Stokes-controlled Seven West Media has upgraded its full-year earnings guidance after a robust advertising market contributed to significant growth in earnings for the first fiscal half.

The company reported earnings before interest, tax, depreciation and amortisation of $215.3 million for the half year, an increase of 31 per cent. Revenue climbed 27 per cent to $819.5 million driven by a recovery in the advertising market and online video service, 7Plus. The fiscal half included the Tokyo 2020 Olympics, which delivered recording television ratings for the network.

Seven has upgraded earnings guidance for the second time since November.Credit:Seven

“We are now in the final phase of our three-year strategy, with key milestones achieved, and we see significantly more potential for the business,” Seven West Media managing director James Warburton said.

Seven said it was reviewing capital management options to enhance shareholder value. It expects earnings of between $315 million to $325 million, including a second half contribution of $10 million from regional broadcaster Prime, which it acquired late last year. It had previously said it would exceed EBITDA of $260 million by between 7 per cent and 10 per cent.

“The Prime acquisition is the first step in unlocking our unrivalled ability to target the national total television market,” Mr Warburton said. “Momentum is strong and the outlook for the markets we operate in remains robust. We will provide an investor update later in the year on the next phase of our strategy.”

As of December 25, Seven had net debt of $116.7 million. Net debt following the transaction with Prime Media Group is $240.9 million.

Seven shares closed at 74 cents each on Monday. Seven did not declare an interim dividend, but chairman Kerry Stokes said in November that he was considering reinstating it in this financial year.

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