Who thinks Seven West Media (SWM) is an efficient funding in the mean time? This week, the corporate revealed its half-year income had halved because of falling income and rising prices. Administration advised buyers that, as soon as once more, there can be no dividend.
There’s been no SWM dividend since 2017, when buyers have been advised there can be a “momentary” pause on dividends. In 2019 the corporate suffered the ignominy of being dropped from the ASX 200, Australia’s premier listing of listed corporations. When that occurred, its shares have been 48 cents. Its share value is now 24 cents, with occasional ventures to 23 cents this week, and its market capitalisation is simply $350 million.
When it was shaped greater than a decade in the past by the merger of West Australian Newspapers and the Seven Media Group, it briefly had a market worth of $4.1 billion. The corporate can be carrying $257 million value of internet debt. The corporate is spending tens of millions of {dollars} supporting its shares in a buyback, which is holding the shares across the 24-cent mark. In keeping with the corporate’s newest accounts, over 14 tens of millions shares, value $3.86 million, have been bought within the six months to December 31, 2023.
Seven’s administration continues to insist issues will come good they usually nonetheless “consider within the energy of tv”, however its sludgy mixture of facile actuality TV, sports activities and right-wing information and present affairs hardly appears to be like interesting.
One of many few individuals who does suppose the corporate is a purchase is Kerry Stokes. His Seven Group Holdings has elevated its minority shareholding to above 40% — however not for monetary causes. Seven Group has now written almost 1 / 4 of a billion {dollars} off the worth of its stake in SWM since 2021-22: $83.4 million in 2021-22, $75.9 million in 2022-23, and the most important of the lot, $90.2 million within the December half of 2023-24.
The most recent impairment sits fairly poorly with all of the courageous speak from the Battle Criminals’ Community concerning the coming turnaround — although Seven Group Holdings’ stake was valued at $167.1 million on the finish of December, which values SWM at round $417 million, effectively above the $350 million the corporate is capitalised at this week.
In its 2022-23 annual report, Seven Group was brutally trustworthy about why it was persisting with its shareholding. Within the notes to its monetary accounts within the annual report, Seven Group defined that Seven West “is the main listed nationwide multi-platform media enterprise based mostly in Australia. The group’s funding in Seven West Media is held for strategic functions”.
There you go: “strategic functions” — a phrase that didn’t seem within the 2021-22 annual report or Tuesday’s 2023-24 interim report.
Why “strategic”? Seven is one among three weakly performing free-to-air linear TV networks with little industrial future. However it will probably nonetheless combination numerous eyeballs for its reliably pro-Coalition information and present affairs, and it stays a part of the information ecosystem, which supplies it political affect. The true energy is in Perth, the place SWM controls The West Australian as effectively.
That paper features because the in-house e-newsletter and chief enforcer of the mining and fossil gas foyer that controls that state and its government-for-hire, at present managed by WA Labor. Kerry Stokes and Gina Rinehart dominate the place — their solely challenger is Andrew Forrest, who’s slowly sounding increasingly more like a Greens MP, besides one with billions of {dollars} at his disposal.
With WA essential to Labor’s reelection probabilities federally, proudly owning the one newspaper and a TV outlet permits Stokes to affect native and nationwide politicians in a approach that’s by no means mirrored in SWM’s rotten share value.
However that energy comes at a price for Stokes. What number of extra impairments can SWM inflict on its largest shareholder? Maybe Stokes might search for a accomplice. One chance is a sports activities betting firm like Sportsbet (owned by Irish group, Flutter). The Monetary Evaluate reported this week that at the least one betting firm was sniffing round for free-to-air spectrum to display animal torture for betting. However why hire when you possibly can purchase an enormous stake in the entire joint for tuppence?
Or there’s the AFL, which could discover a 50% stake in a free-to-air community interesting. The AFL might simply discover the cash, and have its personal nationwide broadcasting operation. Plus the facility that comes from persevering with to be an enormous dinosaur even in a world headed for extinction.