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Seven warns market of softer profits

Seven West Media has told markets that its full-year earnings could be up to $45 million below market expectations.

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Seven West Media has told markets that its full-year earnings could be up to $45 million below market expectations, due to weaker than expected advertising markets.

This is despite Seven’s stellar run in the ratings.

The company, which owns the Seven Network and The West Australian, said in a statement, “The directors have today considered the earnings outlook for the group based on those current advertising market conditions and accordingly, the following full year Earnings Before Interest and Taxes (EBIT) estimates are now expected to be in the range of $460m to $470m.”

The numbers are below market consensus of $518m, already a drop from last year’s $550 million

Source: SMH, The Australian

7 Responses

  1. @JamesJ – whilst the Seven West Media 2010-2011 report proudly boasts about circulation figures for its magazines, it takes great care not to mention the circulation figures for the newspaper, altho’ it does note that circulation figures are in decline generally. What it does say is that its *readership* increased by 1.3% over the previous 12 months.

    Readership (the number of people who read some part of the paper but don’t necessarily buy it) is calculated using certain assumptions based on penetration rates – if the population increases, readership is automatically assumed to also increase. This data is not from the audited sections of the report but in the spin where just the good bits are picked out to keep the shareholder’s happy.

    Like I said, take the numbers provided by the newspaper about itself with a bag of salt.

  3. @JamesJ – not sure what data you’re basing your assertion on – I’d take the numbers that the newspaper proclaims with a fairly large bag of salt. Best to use independently audited data.

    The following is from the Audit Bureau of Circulations and is the daily average (M-F) for the three months to the end of the listed month.

    Sep 09 – 195,211
    Sep 10 – 192,250
    Jun 11 – 188,947
    Dec 11 – 185,477

    As you can see, rather appalling figures given how much Perth’s population has increased in that time.

  4. Squirrel, what are you on about? WAN made $96m in 2010. The West still does very well, its circulation grew by 1.3% in 2011; that’s what a fast-growing population can get you!

  5. Seven West’s overall results are being dragged down by the West Australian newspaper which was in free-fall until Stoke’s picked it up.It’s still a bit of an albatross and the longer that they pretend that the internet doesn’t exist, the less relevant they become.

  7. So TEN wasn’t just trying to save face by using the old ‘weak advertising market’ excuse.

    If Seven do manage to win the ratings yet profits fall compared to last year… do the TV execs still get their inflated bonuses I wonder.

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