Falling ad revenue prompts share drop

SHARES in Seven West Media have fallen heavily after the free-to-air TV broadcaster reported a 13.8 per cent drop in net profit on falling ad revenue.

The group yesterday reported a net profit of $86.2 million for the six months to December, down from $100 million a year ago.

Seven West said total revenue fell 1.5 per cent, with ad- vertising – which accounts for most of it – down 3.2 per cent to $595.2 million.

Printing and digital advertising revenue slumped 11.6 per cent.

Chief executive Tim Worner said securing cricket broadcasting rights had helped the network score a 40 per cent viewing share on a record 39 days over the summer.

“We promised to improve our ratings and revenue share this half as we focused on the core and we have delivered, despite a softer second quarter advertising market,” he said.

But shareholders were unimpressed, with Seven West shares falling 8 per cent, or 4.5c, to 52c yesterday.

Seven West, which has aggressively manoeuvred to reduce debt through a string of measures, including freezing dividends last year, has increased its cost reduction target for this financial year to a range of $20 million to $40 million. Previously it was expecting to cut costs by $20 million to $30 million.

The firm did not declare a dividend and said dividend payments remained suspended.