MELBOURNE - Ten Network Holdings, Australia's No 3-ranked broadcaster, posted a 31 per cent rise in annual net profit yesterday on TV advertising revenue growth but said the ad market was softening.
Ten, whose reality TV programmes Australian Idol and Big Brother have helped it dominate the 16-39-year-old audience, said
it did not expect its first quarter to match the year-ago period's result, pushing its shares to a five-month low.
Shaw Stockbroking media analyst Greg Fraser said the weaker first quarter may reflect a fall in audience ratings numbers for Australian Idol, which is now in its third series.
"Having said that, while the ratings for Idol are down on last year, they are maintaining their share of their target demographic so in that sense it shouldn't be necessarily bad news," he said.
Ten said net profit for the year ended August 31 was A$100.62 million ($109.2 million) compared with the previous year's A$76.93 million. It said earnings increased 10.6 per cent when the impact of a one-off tax benefit was excluded.
Ten executive chairman Nick Falloon said that after a sustained period of growth, the advertising market had softened in the first quarter of fiscal 2006.
"This makes it hard to predict where Ten will finish in the quarter, but we do not expect to match the network's record television advertising revenue and earnings in the previous corresponding period," he said.
Ten, considered both a potential takeover target or an acquirer in the event of changes to foreign and cross media ownership laws which might be introduced next year, said it would "proceed judiciously and cautiously" in assessing any targets.
Ten's outdoor advertising business, Eye Corp, posted earnings before interest, tax, depreciation and amortisation of A$26.3 million, up 74 per cent on 2004.
Ten has historically relied on Idol for a ratings boost towards the end of the year but average audiences for the first four weeks are down 30 per cent from a year ago.
In the year to October 8, Ten's market share on a five-cities basis in the 6pm-10:30pm slot for all age groups stood at 28.1 per cent, trailing Kerry Packer-controlled Nine Network's 36.9 per cent and Seven Network's 35.1 per cent, according to data from TV audience measurement group OzTAM.
Some analysts estimate the 16-39 year-old group represents up to 40 per cent of TV advertising revenues.
Canada's CanWest Global Communications has a voting stake of 14.5 per cent in Ten and an economic interest of 56.5 per cent.
Ten shares were down 18Ac to A$3.31.
- REUTERS
MELBOURNE - Ten Network Holdings, Australia's No 3-ranked broadcaster, posted a 31 per cent rise in annual net profit yesterday on TV advertising revenue growth but said the ad market was softening.
Ten, whose reality TV programmes Australian Idol and Big Brother have helped it dominate the 16-39-year-old audience, said
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