Losses on expanding its outdoor advertising business in the US have pushed down the Ten Network’s 2007 profit, offsetting a recovery in earnings from its TV business. The company also produced a revamped board to reflect the fact that Canwest now controls the company with 56% of the issued shares.
Ten said its earnings before interest, tax, depreciation and amortisation (EBITDA) was $248.3 million in the 12 months to August 31, a fall of 1.5%. That was after the EBITDA for Eye Corp, the outdoor business, halved to $12.2 million from $24 million because of start up costs in growing in the huge US market.
That offset the modest 3.5% rise in earnings at the TV business, from $229.1 million to $237.0 million. That was on track with the forecast from the company.
The network said it had a 44.3% increase in annual net profit to $66.13 million in the 2007 year from the previous year’s depressed levels. And it reckons it will top that in the coming year, even with the Beijing Olympics on rival Seven next year.
The latest EBITDA result made it as profitable as Foxtel, more profitable than the struggling Nine Network but considerably less profitable than Seven.
Ten’s executive chairman, Nick Falloon, said in a statement the company “had posted three consecutive quarters of strong growth, with fourth quarter television revenue soaring 25%, while EBITDA had grown an impressive 35% over the prior corresponding period.”
He said “TEN’s fourth quarter result had benefited from the sale of the Company’s former Adelaide station site, which delivered a pre-tax profit of $4.0 million, while the inclusion of a 53rd week due to the broadcast year cycle impacted year-on-year comparisons.”
The board has been changed with Laurence Freedman, Paul Harris, Irene Lee, Geoff Levy, Robert Magid and Brian Sherman resigning in the wake of Canwest moving to 56% of the issued shares. Leonard Asper, president and chief executive of CanWest and Tom Strike president, corporate development and strategy implementation of CanWest – both previously directors of Ten Group – had been appointed to the board of Ten Holdings.
Mr Asper has also been appointed deputy chairman of the board.
Mr Asper and Mr Strike join Mr Falloon (chairman), Jack Cowin, Paul Gleeson, John Studdy, and Peter Viner on the restructured board of Ten Holdings which has a majority of directors as Australian citizens to conform with the terms of the FIRB approval given to Canwest to move to 56%.
Ten shares eased 3c to $2.82.
The company is being stalked by WIN Corporation and the Gordon family who have boosted their holding of around 6.5% to 10.7% by way of a 12 month option deal over 40 million Ten shares.