Ten Network completes strategic review
Ten Network Holdings has completed its operational review, which has resulted in a 12 per cent cut in staff numbers and annual savings of approximately $18 million.
The restructure was overseen by acting chief executive Lachlan Murdoch, who announced the review in February after the sudden departure of former boss Grant Blackley, in a bid to counter a slump in advertising revenue.
In a statement released to the Australian Securities Exchange, Murdoch said: “This has been a rigorous review, conducted across the entire group, focused on re-setting the company’s strategic direction and building on its core strengths.
“The management team has a renewed focus on driving strategic outcomes, aligning business units, improving accountability and tightly managing costs, the benefit of which will be felt in FY2012.”
The company has revamped and broadened the appeal of its sports channel ONE and also changed its early evening news schedule. However, it faces another new programming challenge after strong ratings for new reality show The Renovators have failed to materialise.
"The change in strategy has resulted in some success with the repositioning of the new multi-channel driving higher ratings although ratings in the core channel are falling," Deutsche Bank analysts said in a report.
The broadcaster said it plans to reinvest $50 million of cost savings into new program initiatives to drive ratings and revenue over the coming year.
However, it also revealed that it had accrued an additional $39 million in one-off charges related to redundancies, restructuring charges, program write-offs, and legal costs associated with incoming chief executive James Warburton’s Supreme Court case. Warburton’s previous employer Seven had launched legal action to delay his start date at Ten. Total one-off costs for the year ended August 31, 2011, now stand at $46.1 million.
Projected full year earnings before interest, tax, depreciation and amortisation (before non-recurring charges) are estimated to fall 18 per cent to approximately $171 million.
Ten Network's television operations are expected to post EBITDA (before non-recurring items) of approximately $153 million – a fall of 21 per cent – on revenue growth of 2 per cent. Total costs are expected to lift 9 per cent for the year.
Metro TV ad market growth