UPDATE 2-Australia's Seven H1 profit jumps 69 pct
Wednesday March 8, 2006, 11:56 am
(Adds byline, fund manager comment, updates share price)
By Joanne Collins
SYDNEY, March 8 (Reuters) - Seven (ASX: SEV.ax) , Australia's
second-largest television broadcaster, said first-half profit
rose 69 percent as higher ratings drove up advertising revenue.
Its shares reached a record as it flagged further growth in
audience and revenue share.
Seven Network Holdings Ltd., whose screenings of U.S.
series "Desperate Housewives" and "Lost" delivered Australia's
highest-rating TV debuts, said its audience share was up 4
percent so far this year as its rivals, PBL Ltd.'s (ASX: PBL.ax)
top-ranked Nine Network and Ten Network Holdings Ltd. (ASX: TEN.ax) ,
lost ground.
"Clearly the results reflect the shifting in network
leadership -- the ratings, the programming -- and that then
belatedly flows into revenue and results," said Doug Little,
investment director at Constellation Capital Management which
has A$1.4 billion ($1.02 billion) in funds under management.
Seven said net profit for the six months ended Dec. 24,
2005 rose to A$65.5 million ($47.8 million) from A$38.8 million
a year ago -- just ahead of analyst forecasts for an underlying
profit of A$64.9 million.
Seven said it expected its strong ratings performance so
far this year to continue, despite forecasting cost growth
above inflation.
"Seven's performance in the opening weeks of the new
television season provides the architecture for continuing
improvements in audience and revenue share," the company said
in a statement.
Seven shares hit a record high of A$9.30 before retreating
slightly to trade up 2.4 percent at A$9.12 by 0018 GMT in a
weaker overall market.
COSTS ISSUE
Seven, 43-percent-owned by billionaire Kerry Stokes, said
TV costs, excluding selling costs and the Olympic Games, rose
12.5 percent during the half. It forecast full-year cost growth
of 5 to 7 percent.
Seven, whose biggest rival is the Packer family's Nine
Network, said legal costs associated with a court case it has
launched over the failure of its pay-TV station C7 were A$27
million for the half, in line with an estimate of A$25 million
to A$30 million it provided in November.
Seven is seeking up to A$1.1 billion in damages over the
failure of C7. It is taking on 22 parties including Australia's
biggest pay-TV group Foxtel. Foxtel is 50 percent owned by
Telstra Corp. Ltd. (ASX: TLS.ax) . News Corp Ltd. NWS.AX NWS.N
and PBL each has a 25 percent stake.
Analysts have said the legal costs are a key uncertainty
facing the network, which warned it might be "some time" before
the case concludes.
Seven saw 49 percent growth in earnings before interest,
tax, depreciation and amortisation at its TV division and
EBITDA growth of 15.7 percent at its magazines publishing
business.
($1=A$1.35)
| More Quotes and Company Information: | - PUBLISHING & BROADCASTING LIMITED (ASX: PBL.ax)
- SEVEN NETWORK LIMITED(ASX: SEV.ax)
- TELSTRA CORPORATION LIMITED.(ASX: TLS.ax)
- TEN NETWORK HOLDINGS LIMITED(ASX: TEN.ax)
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