Seven West Media has returned to profit as improved television earnings and cost cuts overcame continuing weakness in the company's newspaper and magazine operations.
Kerry Stokes' media company posted a $149.2 million profit for 2013/14 - a turnaround from the $70 million loss suffered a year earlier.
The result was driven by cost cuts but also by a boost to revenue from the Seven television network, up three per cent to $1.31 billion and accounting for more than 70 per cent of total group revenue.
Seven's TV earnings grew 7.5 per cent to $312 million.
Chief executive Tim Worner said the group, which also owns The West Australian and Pacific Magazines, had laid "foundations for future growth".
"This year we saw a return to growth in the free TV ad market - this follows two consecutive years of subdued market conditions," he said.
Analysts remain concerned about the cost outlook, however, with Seven West shares closing down 3.5 cents or 1.7 per cent, to $1.985 after the company flagged costs would rise at around the same level as inflation in 2014/15 - above expectations.
Mr Worner said the outlook for key television advertising market was "low single digits" for the year.
Company-wide, Seven West suffered a 1.2 per cent slump in revenue to $1.84 billion for the year to June 28.
Its newspaper and magazines businesses suffered revenue declines in a tough advertising market.
Revenue for The West Australian newspaper dropped 12.4 per cent to $265.4 million and earnings dropped 23.9 per cent to $65.9 million.
Pacific Magazines revenue dropped 7.3 per cent to $237.5 million, with the company saying the rate of decline had slowed from the 11 per cent revenue fall in 2012/13.
Seven West recorded an $87 million impairment charge, $77 million of which was from a writedown of the value of mastheads, goodwill and licences in the magazine business.
Mr Worner said softer economic conditions, plus declining classified ad revenue and circulation had affected The West Australian and costs had been cut by eight per cent.
He said Seven West would in coming months combine the newsrooms of the newspaper and Seven's Perth TV news operation.
"Perth will have Australia's only fully integrated newsroom producing a metropolitan daily newspaper, commercial TV news bulletins, public affairs programs, a website and other digital products," he said.
Following the launch on Wednesday of a joint online video on-demand streaming service by Fairfax and Nine Entertainment, Mr Worner said Seven was working on its own service but was not ready to make an announcement.
Seven West's annual report, also released on Wednesday, showed Mr Worner received a total salary of $3.54 million for his first year as chief executive.
SEVEN SWINGS BACK TO PROFIT
* Net profit of $149.19m, up from a $69.76m loss in 2012/13
* Revenue of $1.84b, down 1.2pct from $1.866b
* Fully franked dividend steady at six cents a share
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