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TEN Network Posts $312m Loss; Announces $77M Capital Raising

TEN Network Posts $312m Loss; Announces $77M Capital Raising
Oct 26, 2015 By Simon Herrmann Tags: TEN

Ten Network Holdings Limited (ASX:TEN) announced its full year results this morning showing a net loss of $312m for FY15.

The operator of Channel 10, Channel 11 and One achieved total revenue of $629.3m, a 4.6% increase compared to FY14, while television cost decreased 6.5%. However the slight improvement in revenue was not enough to deliver underlying earnings for TEN as television earnings before tax resulted in a loss of $12m.

Including non-recurring items such as a television licence impairment charge Ten Network posted a net loss of $312.2m for the period. Non-recurring items of $262.9m were announced in April 2015 and have contributed to the staggering loss.

The new Chief Executive Officer Paul Anderson emphasises on the structural changes of TEN that were undertaken during FY14. He notes that the increased television revenue and improved earnings before tax were a result of “strong audience and revenue growth across all platforms.”

He said: “Our strategy of reducing costs in certain areas and investing in prime time programming is clearly producing results. This year, the primary TEN channel has recorded its biggest prime time audience since 2012 and its highest commercial share since 2011.”

In July 2015 Hamish McLennan resigned as Chief Executive Officer and Executive Chairman and was succeeded by Paul Anderson as CEO and David Gordon as Chairman.

Ten Announces Pro-Rata Entitlement Offer to Raise $77m

Ten also announced a fully underwritten entitlement on a pro-rate basis to raise $77m. New shares will be issued at 15 cents per share and eligible shareholders are invited to buy 7 new shares for each 37 shares they already own. The offer price is a 21.1% discount on the last closing price as TEN shares will remain in trading Halt until the raising is completed. The four largest shareholders have already agreed to take up the entitlement.

Outlook: Ten Expects FY16 Revenue Growth

TEN notes that market conditions in the television market are set to remain challenging, however expects revenue growth of at least 10% in the first three months of FY16.

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Simon Herrmann Author: Simon Herrmann Oct 26, 2015

Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.

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