Fund Manager Summary
The fund managers believe that Seven West Media Ltd presents a compelling opportunity for investment, particularly given its current share price of $0.19. In their opinion, the company's 42% ownership by the Board signifies strong alignment of interests, enhancing investor confidence. They note that trading at only 3x earnings reflects significant undervaluation in the market. The Board's strategy to buy back shares is viewed as a prudent move, as it is cheaper and more accretive than potential acquisitions, while also being less risky. Overall, the fund managers see this strategy as a clear indication of the Board’s commitment to maximizing shareholder value.
Source: Trading View
Commentary From The Managers
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Collins St Asset Management
30 Sept 2025
$0.15
Summary
- Seven West Media (ASX:SWM) is a major player in the Australian media landscape, reaching over 19 million people monthly.
- Second half EBITDA growth of +6% and underlying NPAT growth of +33% align with guidance, marking the best growth since FY22.
- Group operating costs were in line with guidance at $1,203 million.
- Group revenue of $1,354 million saw a 4% decline for FY24, though the rate of decline moderated to -2% in the second half.
- TV advertising revenue decreased by only -1% in the second half, bolstered by a +41% increase in 7plus digital revenue.
- The May Federal election impacted revenue, with an upswing noted in March and April followed by a decline post-election.
- On 30 September, SWM announced a merger proposal with Southern Cross Media Group Limited (ASX: SXL), offering shareholders 0.1552 SXL shares for each SWM share.
- The merger aims to create an integrated media company, but Collins St Asset Management is skeptical, feeling it favors Southern Cross Media shareholders.
- SWM is currently trading at a price to earnings ratio of approximately 4x forward earnings, representing 7.5% of the Fund.
- Through the 7Plus app, SWM collects valuable user data, utilizing AI for media planning and engagement.
- With a dominant market position and a significant user base, SWM is well-positioned to leverage AI for future earnings growth as the advertising cycle shifts.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Collins St Asset Management
30 Sept 2025
$0.15
- Seven West Media (ASX:SWM) is a major player in the Australian media landscape, reaching over 19 million people monthly.
- Second half EBITDA growth of +6% and underlying NPAT growth of +33% align with guidance, marking the best growth since FY22.
- Group operating costs were in line with guidance at $1,203 million.
- Group revenue of $1,354 million saw a 4% decline for FY24, though the rate of decline moderated to -2% in the second half.
- TV advertising revenue decreased by only -1% in the second half, bolstered by a +41% increase in 7plus digital revenue.
- The May Federal election impacted revenue, with an upswing noted in March and April followed by a decline post-election.
- On 30 September, SWM announced a merger proposal with Southern Cross Media Group Limited (ASX: SXL), offering shareholders 0.1552 SXL shares for each SWM share.
- The merger aims to create an integrated media company, but Collins St Asset Management is skeptical, feeling it favors Southern Cross Media shareholders.
- SWM is currently trading at a price to earnings ratio of approximately 4x forward earnings, representing 7.5% of the Fund.
- Through the 7Plus app, SWM collects valuable user data, utilizing AI for media planning and engagement.
- With a dominant market position and a significant user base, SWM is well-positioned to leverage AI for future earnings growth as the advertising cycle shifts.
Summary
Collins St Asset Management
9 Sept 2025
$0.14
- Seven West Media reported a revenue decline of 4% to $1.59 billion.
- Underlying NPAT was $57 million, with an EPS of 3.7 cents.
- It trades at a low multiple of ~3.9x PE based on FY25 numbers, compared to peers at roughly double.
- Positives include reduced debt, improved liquidity, controlled costs, and strong digital growth.
- The second half showed profit growth for the first time in 3–4 years, indicating advertising revenue recovery.
- This growth challenges the notion of a structural decline.
- Negatives include that no dividend has been reinstated yet, although management may do so in FY26.
- Collins St Asset Management continues to hold because they see the valuation as extremely cheap with meaningful upside if re-rated.
Summary
Collins St Asset Management
30 June 2025
$0.14
- Seven West Media (ASX:SWM) is perceived as a misunderstood and undervalued media company in Australia.
- Currently trading at just 4x earnings, the market has largely overlooked its digital business.
- SWM controls over 40% of the free-to-air advertising market, showcasing its dominance in the industry.
- The shift towards digital has significantly improved profitability, with digital businesses now contributing over 40% of profits.
- SWM’s Phoenix platform allows for tailored advertising, enhancing outcomes for advertisers.
- Exclusive access to AFL and cricket content adds significant value to the company.
- Collins St Asset Management believes that SWM’s content contracts exceed the company’s current market cap.
- SWM is considered the best among traditional free-to-air stations in Australia and one of the cheapest media businesses globally.
- Improving economic conditions are expected to drive an increase in advertising demand and substantial earnings growth.
- If SWM were to trade at peer multiples, its share price could approach 50c per share.
- Collins St Asset Management continues to hold because of the potential for SWM to be a target for international players seeking entry into the Australian market.
- SWM should realistically trade at over 10x earnings, equating to approximately 35c per share.
Summary
Collins St Asset Management
31 Dec 2024
$0.15
- Seven West Media (SWM) has been trading at extremely low multiples, currently at a PE of less than 4x.
- The low trading multiples are attributed to discomfort in the advertising market and the absence of a dividend.
- Collins St Asset Management believes the advertising market will improve from its current cyclical low.
- SWM is positioning for a turnaround through a group-wide restructure of operations and management.
- Recently announced a new operating structure with three divisions: Television, Digital, and Western Australia, prioritizing Digital for future earnings.
- There is potential for the Board to reinstate a dividend, which could materially increase the share price.
Summary
Forager Funds
30 June 2024
$0.19
- Seven West Media (SWM) faced significant challenges in 2024, experiencing a substantial decline in advertising revenue.
- Traditional media's market share decreased sharply, affecting overall performance.
- Negative headlines related to high-profile controversies impacted public perception and share price.
- Despite appearing cheap based on earnings multiples, actual cash generation is low due to inflated legacy content deals.
- The business is shrinking more rapidly than previously expected, further complicating recovery prospects.
- Competition from well-funded streaming companies is increasing, making future cost reductions in content unlikely.
- Consequently, Forager Funds decided to sell their entire position in SWM as the impact on Fund returns was limited to 1.3% due to its small weighting.
Summary
Collins St Asset Management
31 Mar 2024
$0.19
- Seven West Media is currently owned 42% collectively by the Board.
- Trading at 3x earnings, indicating strong value.
- The Board has determined that investing in themselves is the best use of capital at this time.
- Share buybacks are seen as cheaper and more accretive than other acquisition options.
- Buying back shares is considered less risky than potential acquisitions.
- Collins St Asset Management continues to hold based on these strategic decisions.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"It appears the board at Seven West Media is betting on themselves, opting for share buybacks over riskier acquisitions. At just 3x earnings, this strategy might just be the most compelling play in a challenging market."
Last Updated: 30 Sept 2025
Query The Data
Frequently Asked Questions
Who is investing in Seven West Media Ltd (ASX:SWM)?
Fund managers including Collins St Asset Management and Forager Funds have invested in Seven West Media Ltd (ASX:SWM).
Why do fund managers invest in Seven West Media Ltd?
Fund managers are investing in Seven West Media Ltd due to its low valuation, trading at only 3x earnings, and the significant ownership by the Board (42%). The Board's decision to prioritize share buybacks over acquisitions is seen as a strategic move to enhance shareholder value, presenting a less risky and more accretive investment opportunity.
What happened to Seven West Media Ltd (ASX:SWM)?
Fund managers are investing in Seven West Media Ltd (ASX: SWM) due to its attractive valuation, trading at a low price-to-earnings ratio of approximately 4x, significantly below industry peers. Recent financial reports indicate a turnaround with second-half EBITDA growth of 6% and underlying NPAT growth of 33%, alongside improved liquidity and reduced debt. The company is experiencing a recovery in advertising revenue, particularly in digital channels, which saw a 41% increase. Additionally, the potential merger with Southern Cross Media could enhance market presence, although concerns remain about its fairness to SWM shareholders. Overall, the combination of strong digital growth, cost control, and favorable market positioning suggests significant upside potential.