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$264m TEN loss, may take action to remain “a going concern.”

TEN posts significant loss following writedowns and warns it may have to recapitalise if revenue falls, to remain "a going concern."

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TEN Network Holdings has posted a $264.4 million loss for the six months ended February 28, and warns of taking “appropriate actions” including raising debt or equity funding in order to remain “a going concern.”

The figure, weighed down by a $251 million writedown of its television license, compares with an $8 million loss in the previous corresponding period. With that one-off excluded, the loss was not as bad as analysts had predicted.

Chief executive Hamish McLennan said the results reflected the restructuring the business had undertaken in 2014 in order to reduce costs and invest in prime time programming.

Cash flow forecasts for the next year show that it will operate within the limits of its current $200m funding facility.

“If this was to occur the group will need to take appropriate actions, including raising debt or equity funding should that be required, in order to continue to operate within its existing $200m funding facility,” the network said.

“As a result of these matters, there is a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.”

TEN is yet to announce any outcome from its discussions with Foxtel for a potential 14.9% stake in the company, which could inject inject $85 million at 18¢ a share.

The huge loss was announced despite the network’s best start to the ratings year since 2012, thanks to Big Bash cricket and including I’m A Celebrity Get Me Out Of Here!

“Since the start of the 2015 ratings year on February 8, Network TEN is the only commercial network to increase its 25 to 54s and total people audiences, with growth of 25 per cent in 25 to 54s and 22 per cent in total people,” he said.

optionsXpress market analyst Ben Le Brun said of today’s figures, “The market was looking for a loss of about $26 million. After the one-off items it looks like it’s come out with a loss of $13 million.”

But observers such as Citigroup analyst Justin Diddams said while “TEN has seen some improvement in audience share into 2015 … it’s yet to translate into advertising revenue share”.

McLennan also said the government needed to present a broader media reform package.

“The two-out-of-three rule and the audience ‘reach’ rule are hurting Australian media companies by inhibiting our ability to grow and compete,” he said.

“However, piecemeal reform, such only removing the ‘reach’ rule, will make the situation worse. Allowing some companies to pursue consolidation while continuing to restrain others will exacerbate the damaging impact of the remaining rules.”

Such “going concern” statements are rare among large companies in Australia. Just 1.5 percent of companies in the S&P/ASX 200 index reported going concern issues in 2013, according to a report last year by CPA Australia.

“In the meantime, TEN urges caution in dealing in its shares on the basis of media speculation about potential transactions involving the company,” the network said.

Source: News Corp, Fairfax, Bloomberg, SKY News

27 Responses

  1. This will be a very long way for Channel Ten when they had a $264m loss, despite good ratings. I reckon that Ten need to refresh their 6pm schedule. They should cut The Project from 1 hour to 30 mins and have a reality show starting at 7pm, for the first time since start of 2009.

    1. “I reckon that Ten need to refresh their 6pm schedule”

      They have. It’s called Family Feud. It’s doing quite well for them.

      They could, however, phase out simulcasting Family Feud on One and 11. Fair enough to do it in the short term but it’s been almost a year now.

  2. Network TEN needs to get people who can actually run the network properly. The current management is worse than the previous one before the raid in 2010. They need a complete rebrand and a major change in strategy the current one is not working. It will not b easy but its possible to turn the ship around however their biggest problem is money they dont have enough of it they need premium live sports. More live content. Its harder to change people perceptions when its now well intrenched the whole board need to be removed for a start.

  3. Interesting that the majority of it seems to be due to a $251 million writedown of their broadcasting licence.

    Given what’s publicly known about historical (pre-‘holiday’ & rebates) licence fees, and the numbers thrown around by the networks in their more recent moaning, that would seem to value their broadcasting licence at $0 – if not actually putting it into liability territory…

  4. Ten’s problem is that while they have lifted their ratings with under 55s this year, that hasn’t resulted in an increase in revenue because the TV ad market is stagnant and advertisers are sticking with what is known to work on Seven and Nine (MKR and The Block etc).

    That leaves them with a budget of around $250m and limited options. We have a digital age of 17 FTA channels, 3 turner DVRs, two public broadcasters, 100+ Pay TV channels, an infinite number of internet video channels while the internet taking sales from retail stores and advertising from a fragmented TV markets because Google sells it cheaply from tax havens. Three commercial networks may no longer be viable in the head of the market, and you can’t run and FTA network of any quality from the long tail.

    Ten main value is to to Foxsports in getting more sport of FTA and on Foxsports where sports fans have to pay a…

  5. The problem with TEN is that none of its executives have ever been tv producers – none of them! They wouldn’t know a good show if it landed in their lap.

    1. It surprises me that Ten has executives with backgrounds in advertising but Ten seems to be the weakest in terms of branding and actually marketing itself. Their MasterChef promos at the moment are very glossy, and Eleven has had a refresh, but the rest of the network’s branding is just doing nothing.

  6. Time to take a risk, rebrand the entire Network. I love Ten but they’re dying a slow, agonising death at the minute.
    And by risk, I mean stop inflating FF’s number with a simulcast. Fix up your multichannels, there’s some decent programming on them but it’s randomly thrown together into the schedule. Do either One or Eleven actually have a focus?

    1. I wouldn’t watch the 14th run of “Jag” or miss the first 15 mins of a program because of the ridiculous staggered start times all 3 are adopting, just because TEN suddenly has a pretty new logo, or is renamed SIX.

  7. “Network TEN is the only commercial network to increase its 25 to 54s and total people audiences, with growth of 25 per cent in 25 to 54s and 22 per cent in total people”

    That’s a lot easier to achieve when you start from such a low base. Increasing your share from 9% to 11% is an increase of 22% but hardly anything to get excited about (unless you’re Ten).

  9. There are some excellent shows on Ten, the problem is that once viewers start watching some other network, they just stay on that network i have friends who only watch Seven and other who only watch Nine, they are either not adventurous to try something or not like the people on this site who I expect know that there is a channel switch and use it to great effect.
    I agree that they should start their reality stuff at 7.00 cut the project back to 6.30 or better still put it on at 6.00 after the news and Family Feud on at 4.30. Put Neighbours back on Ten Eleven and One at 6.30, they do it with FF why not with Neighbours.

    1. never ever move Family Feud or even The Bold and The Beautiful! They are already established audiences and you want them to drag down the schedule because of The Project. 6pm has been tried out many, many years and Ten get the formula right and The Project just doesn’t cut it at 6pm let alone 6.30pm. Because it will be rating a lot lower then The Project at 6.30. There is potential for FF to go higher and with Neighbours there isn’t

  10. Ten has invested in primetime this year and produced some great, fresh content in the form of I’m a Celebrity, Gogglebox and Shark Tank. But the lack of forward planning is baffling. All of the momentum created by I’m A Celeb was soon lost due to not having anything to fill the gap between Celeb and Masterchef. The Bachelorette should have been ready to go. As Aussiecam58 said, Ten should start its primetime programming at 7pm and get the jump on the opposition.

    Ten’s strength in recent years has been drama but for some bizarre reason Ten has chosen to shift away from drama. Big mistake.

    A network with so much potential which managerial mistakes continues to destroy.

    2. Oh boy. We will revisit 2012 once again where by they have to commission new shows rather and get yanked off the schedule. Drama is expensive. Leave The Project where it is

  11. Seriously. Hamish has had his chance. Enough is enough – he must go. Bring in Ian Audsley. He reigned in costs at Nine in the period 2003-2006, and now is CEO of Prime Media Group. Russell Howcroft must go as well. These guys are from Agency land and have no idea.

  12. Ten needs a revamp in their programming. They need to start their prime shows at 7pm not 7.30pm. When they were successful this was the timeslot they dominated. They need a total make over in their look and style. They still persist with this hitting the button thing they have. Their logo needs a change as well, looks dated. I would move Feud to 6.30 and have the project back at 6pm but less on the panel. The flow would move from hard news to light entertainment. Masterchef should be aired around dinner time hence start at 7pm.

      1. I think they need to change their current logo. Regardless of the colors they use, it is the same old logo that they have been using since the ’90s. I don’t know whether you notice, but they have been using a separate “10” logo for their own promos,as well as their current logo. Why don’t they dump their ’90s logo and change to this new logo instead?

    2. do you want Ten to commit suicide? FF is doing well on its own and eating into Seven and Nine’s news ratings. The Project has tried at 6 and failed so miserably that it should never be revisited. Its almost cannibalizing its own early prime time share and Ten shouldn’t air news at 6 because it was a flop in 2011.

  13. Have not watched TEN since Talkin’ Bout Your Generation finished screening.
    Not interested in reality or sport not that TEN has much sport anyway.
    We view all our TV series and movies either via streaming or at the cinema.

  15. They say they invested in prime time programming, yet myself and others watch less on Ten than we ever have. About the only show left from their network that gets seen in this house is Neighbours. They *used* to have some excellent programs, such as Monk, or Psych, but all they seem to screen now is “reality” drek. Couple that with the utter disregard they show their consumers via their poor programming choices (and cuts) and they still seriously wonder why their audience is voting with their feet?

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