Ten writes down TV licence, but improves earnings

Monday, Oct 26, 2015

Ten Network's write-down to the value of its TV broadcast licence has accounted for most of the free-to-air broadcaster's $312.2 million full-year loss.

Ten, the home of Masterchef and The Biggest Loser, reported a non-cash impairment of $251.2 million to its television licence, which was announced in company's first half results.
The metropolitan broadcaster's underlying earnings before interest, tax, depreciation and amortisation improved dramatically to a loss of $12 million compared with a $79.3 million loss in the prior corresponding period.

The network reported a 4.5 per cent uptick in revenue to $654.1 million. The network said the advertising market remains "short" in terms of forward bookings, but its gross advertising revenue is expected to increase at least 10 per cent in the first three months of the 2016 financial year.

"Our strategy of reducing costs in certain areas and investing in prime time programming is clearly producing results," said chief executive Paul Anderson, who took the top job in July.

"This year, the primary Ten channel has recorded its biggest prime time audience since 2012 and its highest commercial share since 2011."

Ten shares are in a trading halt and will remain so until Thursday as the company looks to accelerate a $77 million share placement, announced in June, for existing shareholders.

This will be in addition to the $77 million Ten will receive as part of Foxtel purchasing up to 15 per cent of the network.

The money will be used to pay down debt and invest in content to continue its ratings improvement.

Last week, the Australian Competition and Consumer Commission (ACCC) approved the tie up between Ten and the pay TV giant, which is 50-50 owned by News Corp and Telstra, along with the merger of its sales division with Multi-Channel Network.

"For Ten, the partnership with MCN is creating scale, new efficiencies, improved data capability and broader integration opportunities for our clients," Mr Anderson said said.

"We expect our partnership to drive further improvement in TEN's revenue share and power ratio."
Ten said post the $154 million cash injection from Foxtel and the additional share placement, it will have a net cash position of $14.6 million.

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