Seven West Media’s FY25: 6% H2 EBITDA Growth Amid 4% Revenue Decline
Seven West Media reported a solid second half earnings rebound driven by strong growth in its 7plus streaming platform, helping to counteract declines in traditional broadcast TV revenue. Despite a 4% revenue dip for FY25, the company’s digital pivot shows promising momentum.
- Second half EBITDA up 6%, underlying NPAT up 33%
- 7plus streaming revenue grows 26% for FY25, 41% in H2
- Total TV advertising decline moderates to -1% in H2
- Operating costs reduced by 2% to $1.2 billion
- Net debt falls to $287 million with leverage at 1.8x
Strategic Shift Driving Earnings Growth
Seven West Media (ASX, SWM) has delivered a noteworthy turnaround in the second half of FY25, posting earnings growth in line with its guidance. The company’s EBITDA rose 6% in H2, while underlying net profit after tax surged 33%, marking the first half-yearly earnings growth since FY22. This improvement was largely fueled by the rapid expansion of its 7plus streaming platform, which is beginning to offset the ongoing revenue pressures in traditional broadcast TV.
Digital Momentum Offsets Broadcast Challenges
7plus revenue grew an impressive 26% over the full year, accelerating to 41% in the second half alone. This growth was supported by a 27% increase in daily active users and a 41% rise in streaming minutes, underscoring strong audience engagement with digital content, including premium live sports and original programming. Meanwhile, total TV advertising revenue decline moderated significantly to just 1% in H2, compared to a 6% drop in H1, reflecting a stabilizing market despite a weaker-than-expected post-election advertising environment.
Cost Discipline and Audience Gains
Operating costs were trimmed by 2% to $1.203 billion, in line with management’s cost reduction plans. This was achieved without compromising content quality, as evidenced by a 1.1% increase in total TV audiences and a 1.5% rise in the key 25-54 demographic. Seven West Media’s total TV revenue share also grew slightly to 40.4%, marking the fifth consecutive year of share gains. The company’s diverse content slate, including news, entertainment, and major sports rights like AFL and cricket, continues to resonate strongly with viewers.
Balance Sheet and Outlook
Financially, Seven West Media reduced net debt by $16 million to $287 million, though leverage edged up to 1.8 times EBITDA. The company did not declare a dividend for FY25, reflecting a cautious approach amid ongoing market uncertainties. Looking ahead, management is targeting FY26 earnings to exceed consensus estimates, driven by continued 7plus revenue growth, disciplined cost management, and the earnings accretion expected from the recent acquisition of Southern Cross Media’s regional TV assets.
Navigating a Changing Media Landscape
Seven West Media’s results highlight the evolving dynamics of the Australian media sector, where digital platforms are increasingly critical to offset declines in traditional advertising. The company’s investment in streaming and digital content appears to be paying off, positioning it well to capture shifting consumer habits and advertiser preferences. However, the post-election advertising softness and rising sports rights costs present ongoing challenges that will require careful navigation.
Bottom Line?
Seven West Media’s digital pivot is gaining traction, but broadcast headwinds and cost pressures remain key hurdles ahead.
Questions in the middle?
- Can 7plus sustain its rapid revenue growth to fully offset broadcast TV declines?
- How will the Southern Cross Media acquisition impact earnings and market reach in FY26?
- What strategies will Seven West Media employ to manage rising sports rights costs?
