Ten Network narrows full-year loss, pushes for urgent media reform

Investors hammered Ten after a full-year loss of $157m, as an impairment charge offset healthy growth in TV revenue.

Network 10 chief executive Paul Anderson. (Photo: Jeremy Piper)

Ten Network has warned on the need for urgent media reform as it narrowed its full-year loss amid an improved showing in the crucial 25 to 54-year-old audience segment.

For the year to August 31, Ten reported a loss of $156.8 million, around half the prior year’s loss of $312.2m.

Shares in Ten fell as much as 17.2 per cent in the wake of the result and, at 12.35pm (AEDT), were down 23.5 cents, or 16.55 per cent, at $1.185.

Weighing on Ten’s result was a TV licence impairment charge of $135.2m, which more than offset a steady 7.5 per cent advance in TV revenue to $676.4m.

Ten (TEN) booked a return to profit on the earnings before interest, tax, depreciation and amortisation measure, however, logging EBITDA of $4.5m in FY2016 as against a loss of $12m last year.

“The past year has been a period of considerable change and steady progress at Ten,” chief executive Paul Anderson said.

“Our strategy of investing in prime time content and new distribution channels, coupled with the innovative and market-leading arrangement with MCN (multichannel network), is producing sound results.”

Mr Anderson said revenue growth was well ahead of the market and in line with their expectations despite a persistently “soft” advertising market.

“Our content strategy is working, with Ten increasing its audiences on television and across online and social media platforms,” he said, noting its commercial audience share of the core 25-54-year-old bracket had reached its highest level in four years.

“We continue to invest in differentiated content in a disciplined manner and we now have a domestic content schedule across the entire year, book ended by the KFC Big Bash League.”

Ten recently implemented new regional affiliation agreements with WIN Network and Southern Cross Media, which have resulted in the receipt of higher fees and improved audiences in regional Australia, Mr Anderson said.

The company reported television costs rose 5.1 per cent over the year as it invested in new domestic content such as Australian Survivor. The figure came in below its more recent forecast for a 5.5 per cent expansion in expenses.

Ten is anticipating TV expenses to grow in the mid-single digits in fiscal 2017 despite ongoing cost-cutting measures.

Mr Anderson also weighed in on the lingering media reform debate, urging rapid action on licensing fees to ensure the sustainability of the free-to-air business model.

“Increased competition from untaxed and unregulated providers is bringing major challenges,” he said.

“In order to continue investing billions in a strong Australian voice on screen, this sector urgently needs a significant reduction in television licence fees.

“Ongoing regulatory uncertainty is already stifling decision making, particularly around domestic content investments.”

The group failed to declare a dividend for the full year.