SEVEN WEST REPORTS MASSIVE LOSS AND CUTS CEO TIM WORNER'S PAY PACKET BY $450K
Written on the 16 August 2017 by Ben Hall
SEVEN West Media (ASX: SWM) has posted a full-year loss of $744.3 million and cut CEO Tim Worner's pay packet by $450,000 as the company reported nearly $1 billion in writedowns and one-off costs.
Worner's bonuses have been cut to zero with his 2016 salary dropping from $3.19 million to $2.74 million with other Seven West Media executives also taking bonus cuts.
It is believed that Worner lost part of his bonus from his affair with former executive assistant Amber Harrison which generated an ugly and very public legal battle.
The $744.3 million loss was a big turnaround from the $184.2 million profit in the previous financial year and was due to the nearly $1 billion in writedowns.
The company's revenue dropped 2.7 per cent to $1.67 billion as Worner made reference to the rapidly changing media environment.
"Our results reflect a tough market, one that continues to change at pace, but at a pace that we must match in our transformation," says Worner.
"Despite these tougher conditions, we continue to lead in the core markets in which we compete, while at the same time making the necessary and sometimes difficult decisions in the transformation of our business," he says.
The biggest single hit was a $432.4 million writedown in the value of Seven West's television licence, but the company also impaired the value of its investments and other assets by $276.4 million and made a $139.6 million provision for its onerous contracts.
Worner says the writedowns and impairments had been driven by 'continued challenging conditions'.
"This period we have booked a material impairment in the carrying value of our assets. This reflects the current challenging market conditions which have led us to revise our market growth assumptions, impacting the carrying value of intangible assets."
The company says earnings guidance for FY18 for underlying EBIT will be five per cent lower than FY17 because of "challenging advertising conditions" but was confident that television and production would underpin its growth.
"This year we marked our 22nd consecutive half of ratings and revenue leadership in metro broadcast television," Worner says.
"We have continued to invest in creating our own content and we are growing our productions business globally, delivering a further 11 per cent revenue growth in the year."
Seven held its final dividend at two cents a share. SWM shares were just over two per cent lower at $0.77 at around 11.30am (AEST).
Business News Australia
Author: Ben Hall