Earnings have plummeted at Kerry Stokes’ Seven West Media, with bottom-line net profit diving 69 per cent to $45 million for the full year.
The group owns the Seven Network and Perth masthead The West Australian with its television network the subject of a Four Corners expose on Monday, airing allegations of bullying and sexism and a toxic workplace culture.
Things have not improved during the week, with Wednesday's 2023/24 results also revealing pre-tax earnings were down by a third to $187 million.
"There is no doubt that FY24 was a tough year for Seven West Media and probably many in the sector," managing director and chief executive officer Jeff Howard told investors on a call.
There was a muted response from investors with shares trading up to 16.5 cents after the results were announced before dipping to close at 15.5 cents. The stock was trading at 40 cents a year ago and has fallen by more than 60 per cent since then.
Seven West is home to some of the best media professionals in Australia, Mr Howard said, but some employees have been told to leave.
"The actions of some individuals do not reflect the values, behaviour and attitude of the business as a whole," he said.
"We are focused on building a stronger, high performance-based culture that enables our great people to thrive and where unacceptable behaviour is not tolerated."
In April, the company's previous chief executive and managing director James Warburton stepped down earlier than expected, ending a tenure plagued by scandal.
It followed allegations heard in the Federal Court that the Seven Network paid for illicit drugs and sex workers to secure an interview with former Liberal staffer Bruce Lehrmann.
Less than a year earlier in June 2023, former elite soldier Ben Roberts-Smith resigned from his role as general manager of Seven West Media's Queensland operations.
This was prompted by a Federal Court ruling that news reports he had committed war crimes were substantially true. The Victoria Cross recipient is waiting on a judgement in an appeal against these findings.
In June, Seven West Media restructured into three divisions and implemented cost-cutting measures across the board in a bid to reduce costs by about $100 million.
However, costs have climbed two per cent to $1.23 billion.
One area of spending is artificial intelligence, with Seven West embedding staff from the AI company Databricks into its business, Mr Howard said.
Artificial information technology can accurately predict audiences on the streaming platform Seven Plus 28 days in advance, he said.
Overall, Seven West's revenue was down five per cent to $1.4 billion on the previous full year, while net debt climbed to $301 million.
Perth title The West Australia recorded broadly flat revenue of $172 million, with pre-tax earnings down 13 per cent to $27 million.
A bright spot for the company was its daily digital masthead The Nightly, which launched in February and had attracted a monthly audience of 2.3 million by June.
After breaking even in its first months, it's expected The Nightly will make a profit in 2024/25.
Seven's AFL broadcasting and this summer's cricket season, which features Australia against India, are also seeing momentum in advertising bookings.
No dividend will be paid to Seven West investors.
