Seven West Media upgrades full-year guidance, eyes "capital management"

Seven West Media (ASX: SWM) shares began to move ahead of Tuesday's earnings release, rallying 30% between 1-10 February.

It looks like the price action was on the money, after Seven announced a robust first-half FY22 performance. 

Financials at a glance: 

• Revenue of $820m, up 27% 

• Net profit of $129m, up 48% 

• Net debut reduced by $212.4m to $116.7m 

• Upgraded FY22 earnings guidance to $315m to $325m

“This result reflects the successful execution of our strategy over the past 30 months. We have a television network that has returned to the #1 position in a robust advertising market; a fast-growing digital business that now makes up 35% of earnings,” said CEO James Warburton. 

“We have completed the acquisition of the assets of Prime Media Group, which unlocks an unrivaled opportunity for the business to capture a greater share of the $3.8bn total television market.”

Catalyst rich first-half

Seven's TV advertising revenues were bolstered by major television and streaming events including the Tokyo Olympic Games, The Voice and the AFL Grand Final.

"Our new entertainment schedule is driving television ratings gains and significant growth for 7plus. Over 11 million users are now registered on 7plus and we expect this to grow further with the Winter Olympics in Beijing," said Warburton.

FY22 outlook 

The upgraded FY22 earnings guidance represents 38-42% growth on FY21.

The Board said it will assess capital management options during the second-half to further enhance shareholder value. This could put initiatives such as a share buy-back or reinstating dividends on the cards.