Shares in Seven West Media Ltd surged nearly 20 per cent after the company said it was on track to refinance debt and strengthen its balance sheet despite a tough advertising market.
The broadcaster and newspaper publisher said it increased full year profit by 19.6 per cent to $115.1 million for the 12 months to June 30, from $96.2 million a year earlier.
Shares in Seven West closed up 48 cents at $3.12 on Wednesday.
The stock closed at an 18-year low of $2.55 on Monday, when compared to West Australian Newspapers’ share price before the takeover of Seven Media Group in April.
The result came amid warnings of an uncertain and tentative outlook following a tough start to the new financial year.
Seven West Media chief executive David Leckie said Seven West would enhance the performance of its media businesses and strengthen its balance sheet as it confronted an “uncertain and tentative global economic outlook” over the next 12 months.
“We’re well-positioned to take advantage of the advertising market, however it unfolds,” Mr Leckie told analysts in a briefing on Wednesday.
“We’ve got a strong deep management team, by far the best, that has delivered on its commitments and finally, contrary to what you might hear, we are on track for refinancing our debt.”
He said he could “not believe” how much the company had achieved over the past three to four months since it was acquired by WA Newspapers.
“We have undeniably by far the strongest management in media in this country, let alone the world,” Mr Leckie said.
However, he conceded that July and August had been “very tough months” for the company.
“There’s no question that the advertising market’s tough,” he said.
“We’ve seen a little bit of strength in the last quarter… but compared to what we saw a while ago, I’m feeling a bit better.”
Mr Leckie said Seven West would build on its leadership, create great content, manage costs and drive greater links and synergies across its businesses in the year ahead.
The company’s objective is to consolidate and strengthen its advertising revenue in a market affected by a decline in consumer confidence.
Seven West said it had started refinancing all existing components of group debt and plans to complete the process this calendar year.
The company had net assets of $2.511 billion and $232.8 million in available undrawn facilities at June 25.
The company also said it is undertaking a “transformational whole of business cost review”.
Two of the company’s major shareholders, Seven Group Holdings and Kohlberg Kravis Roberts & Co, have committed themselves to the company’s dividend reinvestment plan.
Seven West’s revenue increased 77.6 per cent to $725.69 million, from $408.69 million.
The result includes 12 months of West Australian Newspaper Holdings figures and two and a half months of Seven Media Group figures after West Australian Newspapers Holdings acquired Seven Media Group in April.
