Seven West posts $150m first-half profit

UPDATE 1.15pm: Seven West Media has lifted its first-half profit to $150.1 million, up 5.5 per cent on the previous corresponding period when excluding significant items.

The result was achieved on a marginal 1.1 per cent fall in revenue to $975.8 million.

The company, which owns the Seven Network, publishes The West Australian newspaper and runs the Pacific Magazine stable among other media assets, declared a fully franked interim dividend of six cents a share, in line with the previous corresponding period.

The $150.1 million bottom line profit compares with a $109.3 million loss previously, which included impairments relating to the carrying values of the company's magazines business, digital investments as well as redundancy and restructuring costs.

Seven West Media chief executive Tim Worner described the result as strong and positive given mixed market conditions.

"We are pleased to see the television advertising market return to growth this half and we are confident in our positive outlook on the advertising market for the remainder of the financial year," he said.

Television revenue grew 2.6 per cent to $683.7 million accounting for 70 per cent of group revenue while EBIT (earnings before interest and tax) grew 2.2 per cent making up 76 per cent of group EBIT.

The company's management upgraded its full-year television advertising market outlook to "low-to-mid single-digit growth" from "low single-digit growth".

Newspaper revenue declined 11.8 per cent to $139.4 million in the period mainly because of lower classified advertising revenue.

Seven West said The West had maintained its market leading EBITDA margins of 35.4 per cent by delivering on its cost reduction initiatives with operating costs excluding depreciation and amortisation down 9.1 per cent on the previous first half.

EBIT of $38.8 million was down 20.3 per cent on the previous half.

Seven West said The West Australian maintained its position as the strongest performing newspaper in the country, reaching 80 per cent of West Australians every month through its print and online footprint.

However the company saw little upside for the newspaper advertising market in the period ahead.

Pacific Magazines continued to outperform the overall magazine market with advertising share growing to 27.6 per cent in the half year versus 24.9 per cent in the previous corresponding period, based on SMI data.

The company said advertising revenue from magazines had declined over the period however the rate of decline had slowed and was expected to lessen in the year ahead.

Seven West said its net debt had fallen 9.6 per cent in the first half to $1.14 billion, with the company using operating cashflow to continue to reduce leverage.

The company said it expected full-year 2014 NPAT to grow in the low single digits.

Seven West shares closed down four cents, or 1.84 per cent, at $2.14.