Ten Network Holdings is forecasting a more stable advertising market as it pins its hopes on a suite of new shows to secure more eyeballs and improve earnings.
Presenting his first set of financial results since taking the chief executive’s chair on January 1, James Warburton talked up the network’s stable of new shows and their potential to drive advertising revenues.
With top-rating MasterChef to return shortly alongside a new programs including Bikie Wars, Being Lara Bingle and The Shire, Mr Warburton sounded upbeat despite announcing a 70 per cent plunge in first half net profit.
“We believe we are building,” Mr Warburton said during Ten’s results presentation in Sydney on Thursday.
“When you see all of that content on screen in one schedule around the middle of the year that this network will be really firing from a content point of view.
“From that, and from a positive ratings trend, we can then very quickly work to monetise.”
Mr Warburton says Ten traditionally did “extraordinarily well” after Easter in terms of ratings and its share of the advertising market.
After enduring a soft advertising market in late 2011 and early 2012, he expects conditions to remain tough.
However he believes there will be fewer wild swings from week to week in advertising bookings.
“I think it would be fair to say, without a total degree of certainty, that from May on perhaps a flatter, less volatile trend of weeks up and weeks down will start to emerge,” Mr Warburton said.
Ten’s net profit dropped to $14.8 million for the six months to February 29 from $49.5 million in the prior corresponding period.
The massive fall was anticipated after Ten released a trading update in February, but came in well below market expectations.
Revenue at Australia’s number three network fell 10.9 per cent to $432.7 million.
As previously flagged to the market, no dividend was declared.
Ten offered no update on the fate of its outdoor advertising business EYE Corp, saying only that the strategic review announced in March was continuing and a sale was just one of the options being considered.
After initially falling when the result was released, Ten shares rebounded to close two cents higher at 78 cents.
Fusion Strategy media analyst Steve Allen said he expected Ten to have a better second half in terms of ratings and revenue on the back of MasterChef’s return.
“There’s no question they are going to do better in the next six months,” Mr Allen said.
“MasterChef starts in a couple of weeks and that will be potentially their ratings peak for the year.”
However, Ten would still be under pressure from Seven, whose ratings dominance and market leading share of the advertising market showed no signs of waning, and the Olympic Games, he said.
