Ten Network has reported a 4.4% increase in TV revenue to $315 million in its first-half financial results today, outstripping broader growth in the free-to-air TV ad market. Net loss after tax was $8 million, down from $243.3 million in the prior corresponding period.
"That result was driven by the successful launch of the KFC T20 Big Bash League, which gave Ten its best summer ratings since 2008, and the XXII Olympic Winter Games in Sochi, Russia. But, as expected, the increase in revenue did not off-set the investment in critical new content," said Hamish McLennan, Ten Network Holdings executive chairman.
"Our television revenue growth was ahead of the growth rate for the capital-city free-to-air television advertising market during the six months to February 28."
However, one media analyst who did not want to be named told AdNews the result was broadly in line with investor expectations but remained concerned the network was still struggling for profits despite revenue growth ahead of the broader TV ad market.
“The Big Bash [cricket] and Sochi definitely helped their numbers,” he said. "Big Bash gave them a $15 million hit that was new to free-to-air TV. Sochi won’t be in next year’s numbers. Ten’s done their best in revenue terms and they’ve spent a bit doing it but the business is not making any money. We’ve been talking about this turnaround for two years now."
In his presentation to investors, McLennan said Ten's general entertainment programming on its main channel had performed badly and failed to capitalise on the momentum at the end of the Sochi Games.
He said part of the problem was "ageing program franchises" and flagged a change when programming contracts come up at the end of the year. McLennan also acknowledged Ten needed to improve how it scheduled programs on the main channel.
"We will continue to work on promoting and marketing our content more consistently and effectively," McLennan said. "The success of the Big Bash League and Sochi shows that when we have good content that's marketed well the viewers will come."
Meanwhile, Ten also announced this morning that chief financial officer Paul Anderson has been promoted to chief operating officer. Anderson will continue as CFO in addition to his new responsibilities. "The strong executive team I have built at Network Ten over the past year will allow the company to address its operational challenges and execute its turnaround strategy," McLennan said.
"Paul has been a great support to me in my role as chief executive officer and as I take on the additional responsibilities of executive chairman, it is appropriate to expand his role. Paul has been an outstanding contributor to the company, has a deep understanding of our business and is well respected throughout Network Ten and by the Board."
The ASX release:
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