UPDATE 1.45pm: Shares in Seven West Media surged more than 11 per cent after chief executive Don Voelte outlined initiatives that would deliver the media company about $75 million in improved cashflows this financial year.
Speaking at the company's annual general meeting in Perth this morning, Mr Voelte also announced a phase two program would deliver further savings, starting with an expected $50 million in 2014.
Mr Voelte said the initiatives would keep Seven West Media's margins the best in its industries and improve cash flow significantly, allowing significant pay down of debt, as well as continued dividend payments.
The announcements came after Seven West chairman Kerry Stokes expressed disappointment with the company's prevailing share price, but admitted advertising markets continued to be challenging and acknowledged rapid changes across the company's businesses.
Mr Voelte noted the company was exposed to a cyclical downturn in advertising accompanied by a structural shift into digital.
He said the business was seeing downward trajectories in advertising revenues in television and publishing, but the market appeared to be stabilising.
He said the group expected first-half operating EBIT of about $250 million, less several million dollars for one-time restructuring costs. This compares with $309.7 million in the previous corresponding period.
However he said he could not provide full-year guidance because the market was too short to do so with any credibility.
"Importantly all businesses continue to deliver earnings in approximately the same proportion to total EBIT that they achieved last year, demonstrating the advantage of our media assets working collaboratively even in difficult markets," Mr Voelte said.
"Our goal for this financial year is to dramatically limit the advertising market pressure on our $535 million EBITDA and $473.4 million EBIT from last year and to maintain, and hopefully increase, our net profit after tax as compared to last year's $226.9 million."
Mr Voelte said the company was deeply focused on redefining its operating model with greater cost management and extracting greater synergies across its businesses.
"We are not afraid to spend a dollar, but we want every dollar spent to be the most efficient and effective possible," he said.
"And to ensure you know this: very little is 'sacred' in the terms of costs or the way we 'do business'."
Mr Voelte told shareholders there was no emotional attachment to any aspect of the company's processes and assets.
"Your board of directors and senior management have an unequivocal understanding and acceptance of one thing: the world has changed. And it will continue to change," he said.
Mr Voelte said Seven West Media had to be at the forefront of changes across the industries in which it operated.
"We have been reviewing our cost base and our business practices," he said.
"Our objective over the coming twelve months is to strengthen our performance in a challenging market impacted by a decline in consumer confidence.
"While our focus is on efficiencies, managing our businesses and building our presence beyond our current media businesses, our unwavering focus is on ensuring that our brands, content and people, and our audiences are enhanced, nurtured and grown."Seven West shares closed up 13 cents, or 11.21 per cent, at $1.29 after hitting an earlier peak of $1.41.
The new magazine for a new generation of West Australians.Click here to download »
All the latest market figures from Australia and the world.Click here »
'The West Australian' is a trademark of West Australian Newspapers Limited 2013.
All rights reserved.
Select your state to see news for your area.