Seven West Media is hoping to profit from the federal election and is expecting mining magnate Clive Palmer to buy more advertising space after releasing dour financial results weighed down by falling revenue streams.
The Kerry Stokes-backed publishing and broadcasting company’s profits fell by two-thirds to $18m for the six months to 31 December compared with the same period the previous year.
The already difficult period of transition for free-to-air television and newspapers has been made worse by advertisers tightening their spending due to rising business costs in an inflationary period.
Releasing Seven West’s half-year results on Tuesday, its chief executive, Jeff Howard, said he was “confident” election advertising would be of “some benefit” to the company’s financial position over the next six months.
“We did a pretty good job with election last time,” Howard said during the investor presentation.
Howard said Palmer had started buying advertising space ahead of the federal election, which is expected to be held in April or May.
“We’ve also seen a bit of Clive money already,” Howard said.
“[A] relatively small start, but it’s still very early, and obviously the election hasn’t been called yet, so I’d expect to see that continue to build.”
Palmer spent close to $100m campaigning before the 2022 federal election and took out plenty of splashy advertising, but his United Australia party’s primary vote was only 4.7% across the country.
Seven West has previously warned it will need to further cut costs if an advertising slump hurting television networks and publishers around the world continues to erode revenue streams, while it also grapples with the rise of global digital streaming services.
The company reported a total revenue of $727m in the six months to 31 December, a 6% decrease from the same period in the previous year. Seven’s TV revenue fell by $45m while the West Australian’s dropped by $3m.
In its outlook comments, Seven West noted that the advertising market was improving, leading to a 3% lift in its share price in early afternoon trading to reach 17c. Its shares are still down almost 40% over the past 12 months.
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Shares in rival broadcaster and publisher Nine Entertainment jumped 10% on Tuesday amid hopes the weak advertising market is turning.
Howard on Tuesday talked up Seven West’s digital content, telling investors that streaming had risen by 43% and online readership increased by 10.6%, with 8.3m page views on its new digital-only publication The Nightly.
“We are continuing to aggressively manage costs without compromising content and editorial quality to maintain earnings and cashflow,” he said.
Howard said he was “optimistic” the Albanese government was progressing the news bargaining incentive, which is intended to entice digital platforms to pay media companies for news.
He said Seven West continued to advocate for the government to “factor in” the financial effect that any restrictions on gambling advertising would have on media companies’ revenues.
“We engage actively with the government on the gambling reform,” Howard said. “They were working towards a model. It went quiet and, from what we’ve heard, it’s sort of been parked [until] post election.”
