Seven West (ASX:SWM) share price zooms 11% on trading update

It’s been a great day for Seven West Media shares…

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Seven West Media Ltd (ASX: SWM) shares are surging higher in morning trade. At the time of writing, the Seven West share price is up 10.63% to an intraday high of 44.25 cents.

The movement comes after the company announced a trading update for the backend of the current financial year.

Let’s take a look at how the media company has been performing.

What did Seven West Media announce?

Judging by today’s Seven West share price, investors are excited over the company’s latest statement to the ASX.

According to its release, Seven West Media reported favourable trading conditions during the fourth quarter of 2021.

Advertising revenue has rebounded strongly when compared to last year, projected to increase by 45% in the quarter. This includes Broadcast Video on Demand (BVOD), which is engaging with millions of viewers in Australia.

Since April, the company has been increasing its television audience share which has translated to a lift in revenue.

Management noted “the Seven Sales team delivered the number 1 linear TV revenue share. Seven West Media is highly confident in Seven’s schedule for the next six months, with proven and successful formats and Olympic Games Tokyo 2020 and the Ashes Test series.”

Digital earnings are performing strongly, with the company forecasting its digital segment to contribute more than $60 million to earnings before interest, tax, depreciation and amortisation (EBITDA). This represents a 130% year-on-year increase. FY22 is projected to double FY21’s digital earnings figures.

Pleasingly, Seven West Media has kept costs in line at the lower end of the range announced in its February half-year results.

Overall, the group expects EBITDA to be between $250 million and $255 million in FY21. This compares to analyst consensus of $235 million to $245 million for the period.

Seven West Media stated that significant work has been undertaken to strengthen up its balance sheet. Net debt is estimated to stand at around $240 million to $250 million at the end of June 2021.

The company anticipates the positive momentum to continue running into the September quarter.

Seven West Media share price summary

Despite being hit hard by COVID-19 in 2020, Seven West Media shares have been on the rebound. Over the last 12 months, the company’s share price has lifted by more than 270%, reaching 2019 levels.

Seven West Media presides a market capitalisation of roughly $669 million, with approximately 1.5 billion shares on issue.

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