Seven West Media share price in focus following best financial performance in a decade

The company's underlying profit lifted a whopping 60% year-on-year.

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Key points

  • The Seven West share price is on watch this morning following the release of the company's full-year earnings 
  • It saw its underlying NPAT increase 60% to $201 million in financial year 2022 while its EBITDA lifted 35% to come in above guidance at $342 million
  • The company also announced an on-market buyback, expected to snap up 10% of its shares on issue over the coming 12 months

The Seven West Media Ltd (ASX: SWM) share price is in focus following the release of the company's financial year 2022 earnings and news of an on-market share buyback.

The Seven West share price closed Monday's session at 52 cents.

Seven West share price on watch as profit lifts 60%

Highlights of Seven West's full-year results include:

The company's reach grew alongside key financial metrics over the year ended 25 June.

The company boasted a 39.1% share of the national television advertising market across financial year 2022.

Its metro TV revenue lifted 9%, while its regional TV revenue increased 6%. Additionally, West Australian Newspapers delivered its best result since financial year 2017 on the back of digital growth.

The company's operating costs also rose 17% to $1.198 billion – within its previously guided range despite rising inflation.

It also announced an on-market buyback of up to 10% of its shares on issue. The buyback will be conducted on an opportunistic basis over the coming 12 months and funded from existing debt facilities. It was born from improvements in the company's balance sheet over the past two years.

Seven West closed the financial year with a net debt level of $256.5 million – a 6.9% year-on-year increase.

What else happened in FY22?

The big news from the company last financial year was its acquisition of formerly ASX-listed Prime Media. The Seven West share price surged 14% when the acquisition was announced in November.

The Prime brand has since been retired and the company has today noted cost synergies will be at the top end of prior guidance.

Of course, the company was front of mind at the beginning of the financial year as Seven aired the 2022 Tokyo Olympic Games. The games were said to provide a launch pad for Seven's 2022 financial year content line-up, including The Voice, SAS Australia, Dancing With The Stars: All Stars, The Voice Generations, the AFL Finals Series, Bathurst 1000, the Ashes Cricket Test Series, and the Beijing Winter Olympics.

What did management say?

Seven West managing director and CEO James Warburton commented on the company's earnings, saying:

These results mark the strongest financial performance by our company in over a decade and reflect the successful completion of the group's three-year strategy.

[They] represent the best Seven television EBITDA results in 11 years, the best EBITDA from West Australian Newspapers in five years, and our best group EBITDA result in six years.

What's next?

Seven West has updated the market on its performance over the current quarter and its outlook for the rest of this financial year.

It noted trading conditions in the September quarter have been skewed by the impact of the Olympics. The company estimates its quarterly total TV advertising market is down around 2% excluding the Olympics and around 7% including the games. The December quarter, however, is expected to be positive year-on-year.

Seven West is targeting a 39% share in total TV revenue in financial year 2023. Seven Digital is forecast to grow its EBITDA this financial year. Meanwhile, its digital platform news revenue is expected to be consistent with financial year 2022.

The company's operating costs for the current financial year are expected to come in at between $1.2 billion and $1.22 billion.

Seven West share price snapshot

The Seven West share price has had a rough trot on the ASX lately.

It has slipped 17% since the start of 2022. Though, it's currently trading 8% higher than it was this time last year.

Meanwhile, the All Ordinaries Index (ASX: XAO) has dumped 8% year to date and 7% over the last 12 months.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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