Seven West Media profit warning in “soft & short” ad market
• Nine also warned the “market remains soft”
Seven West Media yesterday advised the ASX it expects underlying group EBIT for the year ending 30 June 2019 to be in the range of $210 million to $220 million versus $235.6m in the prior year.
Financial year 2019 group net cost reduction will be at the top end of the $30 million to $40 million range provided at the 2019 half year results in February, it added.
Seven has grown revenue share this financial year, including a 41.3% share of the metro FTA market and 42.5% share of BVOD market in April, however, this revised guidance reflects the soft conditions and short market experienced across the advertising sector, and the economic uncertainty surrounding the Federal Election.
In a trading update earlier this month, Nine claimed a January – March 2019 revenue share of 40.9% and that January – June share would be over 40% too. Nine also warned the “market remains soft”.
At its first half results, Seven said it was confident of achieving the biggest share of metro advertising in the second half of the financial year – January to June 2019.
Seven’s statement yesterday continued:
Seven West Media continues to transform its business at pace, over-delivering on cost-savings and investing in strong growth areas.
Seven Studios will achieve strong EBIT growth and 7Plus will grow revenue over 40% this financial year.
Seven West Media remains focused on improving balance sheet flexibility and will reduce net debt by approximately $75 million in FY19.
