U.S. TV fare rolls a lucky Seven
Profit leaps 62% as network becomes tops Down UnderSYDNEY -- Seven Network Ltd. on Tuesday reported higher earnings for its full fiscal year ending June 30 driven by strong TV revenue amid the success of such hot U.S. series as "Heroes," "Grey's Anatomy" and "Ugly Betty."
Owned by billionaire chairman Kerry Stokes, Seven reported a profit increase of 62% to AUS$174 million ($140 million) following a 14% rise in TV revenue to AUS$1.1 billion ($880 million) that outpaced national TV ad growth of 2.2%.
The company rose to become Australia's top-ranked network over the 12-month period, replacing the Nine Network.
Seven this year spun off its media businesses, including the Seven TV network, Pacific Magazines and its Yahoo 7 online division, into a joint venture with private-equity group Kohlberg Kravis Roberts. The deal valued the Seven Media Group at AUS$4 billion.
The company prepared its full-year financials as if it had owned these assets for the full year to make results comparable.
Seven executives said the network was considering acquisitions and planning to buy back up to 10% of its own shares with its flush war chest.
In the year ending June 30, Seven's television business generated operating cash flow growth of 31.7% to AUS$337.6 million ($270 million).
The network has dominated the current TV year, winning 25 out of 25 weeks in its core 25-54 demographic and 23 out of 25 weeks with viewers of all ages.
Seven Media Group CEO David Leckie called this "an amazing achievement," adding that the TV division was "relentless" in its pursuit of its core audience with a "swingback" to Australian programming from a previous trend that favored imported fare.
"Seven has developed depth and momentum in primetime and is well-placed to deliver a competitive performance across the remaining three months of the current television year," the company said.
Upcoming programming includes the Australian Football League finals, new seasons of U.S. hits "Heroes" and "Prison Break," the new series of homegrown drama "Kath and Kim," the new local drama series "City Homicide" and the launch of "Dancing With the Stars 7."
Television costs in its latest year rose 10% after Seven's acquisition of key sports broadcast rights to the AFL and the V8 Supercars Championship.
While network executives were clearly enjoying their new ratings leadership, the company also made a AUS$50 million ($40 million) provision to cover costs in a lawsuit it brought against rivals, including pay TV group Foxtel, News Ltd. and telecom firm Telstra Corp.
Federal Court judge Ronald Sackville last month dismissed Seven's claims of anti-competitive conduct by its rivals, but has yet to make orders on costs, which have been estimated as high as AUS$100 million. Seven has not ruled out an appeal against the judgment.