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Aug. 26, 2014, 11:47 p.m. EDT

Seven West Media swings to profit on TV revenue

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By Robb M. Stewart

MELBOURNE, Australia--Australian billionaire Kerry Stokes' Seven West Media Ltd. (SWM.AU) swung back to a full-year profit as its core free-to-air television network saw higher revenue thanks to top-rated programs such as X Factor.

The company said it swung to a net profit of 149.2 million Australian dollars (US$139 million) in the year through June from a year-earlier loss of A$69.8 million, which included hefty impairment charges for its magazine business, restructuring and other costs.

Stripping out one-time items, Seven West said profit rose 4.9% to A$236.2 million from last year's A$225.2 million. Revenue dipped 1.2% to A$1.84 billion.

Seven West was formed in 2011 through a combination of Mr. Stokes' Seven television network assets with newspaper publisher West Australian Newspaper Holdings Ltd. Like its peers Ten Network Holdings Ltd. (TEN.AU) and Nine Entertainment Co. (NEC.AU), Seven West has struggled in recent years with a weak advertising market, declining readership for magazines and newspapers, and heightened competition from online media.

The overall advertising market returned to growth in the financial year in part thanks to government spending around the federal election--rising 1.9% despite a modest decline in the second half of the year, according to data provider SMI.

"This is a positive result in challenging market conditions," Chief Executive Tim Worner said, adding the company continued to focus on costs and would make tough decisions on the media company's content if necessary.

Seven West's television revenue grew 3% in the year to A$1.31 billion, and the company said it expanded its market share in important audience demographics with programs such as My Kitchen Rules, X Factor and the broadcast of big sporting events.

Still, revenue at The West Australian newspaper fell 12% to A$265.4 million and revenue at the company's Pacific Magazines division dropped 7.3% to A$237.5 million, the company said. Seven West's share of earnings before interest and tax from its Yahoo7 joint venture with Yahoo! Inc. (YHOO) and other digital businesses fell 38% to A$9.8 million.

Seven West will pay a final dividend of A$0.06 a share, in line with a year ago, taking its full-year payout to A$0.12.

Write to Robb M. Stewart at robb.stewart@wsj.com

Access Investor Kit for Seven West Media Ltd.

Visit http://www.companyspotlight.com/partner?cp_code=A591&isin=AU000000SWM4

Access Investor Kit for Seven West Media Ltd.

Visit http://www.companyspotlight.com/partner?cp_code=A591&isin=US81806U1097

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