Seven West Media has been hit by a 91 per cent drop in profit after a series of one-off significant items and impairments totalling more than $83 million, despite a lift in slight lift in revenue.
The media group posted its first half results to December 24 on Wednesday, which showed profit had fallen from $135.2 million to $12.385 million. Revenue was up almost 1 per cent from $895.7 million to $903.33 million
Excluding significant items, profit after tax fell 32 per cent, from $140.33 million to $95.75 million over the corresponding period.
The significant items included the sale of Seven West’s investments in the streaming service Presto and Australian News Channel, the sale of Pacific Magazine’s youth titles and the impairment of investment in Yahoo7.
The adjustment in the investment value of Yahoo7 related to an acceleration in the shift from premium display to programmatic advertising and the loss of a service contract in the period.
In television, Seven held its advertising revenue share of 40.8 per cent across the first half of the financial year, although this was weighed down by an increase of more than 10 per cent in group operating costs to $756.6 million because of the Rio Olympics coverage.
In news media, The West Australian completed the acquisition of The Sunday Times and Perth Now from News Corp Australia.
“This is a pivotal transaction in the company’s transformation with material synergies to be realised in the coming period,” Seven said in a statement to shareholders.
“Pacific implemented the first phase of a transformation plan with the realignment of its portfolio and is now the leading mobile publisher in the country, growing digital audiences by 177 per cent.”
The group’s newspapers delivered cost reductions of 3.9 per cent.
Seven West said digital revenue across the company’s 100 per cent owned assets was up 200 per cent, driven by growth in its live streaming service and catch-up TV app, as well as strong growth in The West and Pacific.
Chief executive Tim Worner made reference to a well-publicised affair with a former employee in opening the results session. The matter is now the subject of legal action by Seven West.
“Over the past two months much has been written and discussed concerning the ongoing claims of a former employee,” Mr Worner said.
“I have apologised for what did happen and we don’t wish to give any more oxygen to things that did not happen. The company has made a number of public statements on the matter and will continue to keep the market informed.”
Mr Worner was given total support by executive chairman Kerry Stokes, who spoke after the posting of the interim results.
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