Seven West Media reports a robust 33% rise in underlying net profit, driven by a 26% jump in 7plus digital revenue, even as traditional TV advertising revenue declines by 4%.
- Underlying NPAT up 33%, EBITDA growth of 6%
- 7plus digital revenue surges 26%, daily active users up 27%
- Total TV advertising revenue declines 4%, but audience grows 1.1%
- Operating costs reduced by 2%, net debt slightly lowered
- Southern Cross Media acquisition immediately accretive
Strong Digital Growth Amid Traditional Challenges
Seven West Media Limited (ASX, SWM) has delivered a solid FY25 financial performance, underscored by a 33% increase in underlying net profit after tax (NPAT) and a 6% rise in EBITDA. This growth is largely attributed to the company’s accelerating digital transformation, with its 7plus streaming platform revenue soaring 26% year-on-year, buoyed by a 27% increase in daily active users and a 41% jump in streaming minutes.
Despite these digital gains, the company faced headwinds in its traditional broadcast television advertising segment, which saw a 4% decline in revenue for the full year. However, total TV audiences grew by 1.1%, including a 1.5% increase in the key 25-54 advertising demographic, suggesting that while advertising dollars are shifting, viewer engagement remains strong.
Strategic Acquisitions and Cost Discipline
Seven West Media completed the acquisition of Southern Cross Media’s affiliate TV markets during FY25, a move that was immediately accretive to earnings. This acquisition strengthens Seven’s regional footprint and complements its market-leading position in metropolitan areas.
The company also successfully reduced operating costs by 2%, aligning with its disciplined approach to managing expenses amid inflationary pressures. This cost control, combined with revenue growth in digital, helped offset declines in other areas and contributed to a modest reduction in net debt to $287 million.
Outlook and Market Positioning
Looking ahead to FY26, Seven West Media aims to continue growing revenue and earnings, with a particular focus on expanding 7plus to offset broadcast declines. The company targets improved cash flow and a leverage ratio reduction to between 1 and 1.5 times EBITDA. Early trading updates indicate a stabilising total TV advertising market, with July and August revenues tracking flat year-on-year and 7plus bookings growing around 25%.
Seven’s strategic priorities include leveraging AI-driven audience insights through its REDiQ4U platform, optimising its Phoenix total TV trading platform, and progressing regulatory reforms that could enhance its competitive position. The company is also focused on monetising ancillary opportunities around premium sports content, such as AFL and cricket, which remain key audience drivers.
Overall, Seven West Media’s FY25 results reflect a media company successfully navigating the transition from traditional broadcast to digital platforms, balancing audience growth with cost discipline and strategic acquisitions.
Bottom Line?
Seven West Media’s FY25 results set the stage for a digital-led growth trajectory, but sustaining momentum amid broadcast market shifts will be critical.
Questions in the middle?
- Can 7plus continue its rapid user and revenue growth to fully offset broadcast declines?
- What impact will regulatory reforms have on Seven’s advertising and content monetisation?
- How will Seven manage cost inflation and investment in technology while improving cash flow?