Post by Inside Australian Idol on Apr 12, 2004 2:15:23 GMT 10
Taking stock: Ten Network
By Nicholas Way
April 11, 2004
Something funny is happening at Ten Network, and we are not referring to the reality series The Resort or the light entertainment show Rove Live.
The company has just reported a strong result, with earnings for the six months to February 29, 2004, ahead 33 per cent to $43.6 million on the back of strong advertising revenue. But investors seem less than impressed.
While the share price jumped a few cents in the week preceding the announcement, the actual result had no impact on the price, as it hovered around the week's closing of $2.82.
Since the shares peaked at $2.89 on October 31, 2003, the stock has slid sideways, a buoyant advertising market notwithstanding.
Investor indifference must be puzzling the Ten board. In announcing the half-yearly results, executive chairman Nick Falloon not only noted the substantial growth in the advertising market but that Ten was the "clear outperformer" in the sector.
But investors know that's not the complete story.
The reality show phenomenon is starting to run out of steam. The ratings for The Resort, for example, have been way below what Ten was counting on.
Management must have their collective fingers crossed that those two favourites from last year, Big Brother and Australian Idol, have repeat ratings performances this year.
Other worries on Ten's radar screen include the Athens Olympic Games and how much advertising it will lose when rival Seven hosts the world's premier sporting event. Longer-term, there's the strong performance of Kerry Packer's Nine Network, historically the market leader and consolidating its position this year.
That said, Ten has shown that its formula of targeting the 16-to-39 demographic while keeping a tight control on costs does pay dividends. Investors would pay to keep an eye on this channel, because the current performance of the share price might be the prelude to the stock breaking out above $3.
www.theage.com.au/articles/2004/04/10/1081326978475.html
By Nicholas Way
April 11, 2004
Something funny is happening at Ten Network, and we are not referring to the reality series The Resort or the light entertainment show Rove Live.
The company has just reported a strong result, with earnings for the six months to February 29, 2004, ahead 33 per cent to $43.6 million on the back of strong advertising revenue. But investors seem less than impressed.
While the share price jumped a few cents in the week preceding the announcement, the actual result had no impact on the price, as it hovered around the week's closing of $2.82.
Since the shares peaked at $2.89 on October 31, 2003, the stock has slid sideways, a buoyant advertising market notwithstanding.
Investor indifference must be puzzling the Ten board. In announcing the half-yearly results, executive chairman Nick Falloon not only noted the substantial growth in the advertising market but that Ten was the "clear outperformer" in the sector.
But investors know that's not the complete story.
The reality show phenomenon is starting to run out of steam. The ratings for The Resort, for example, have been way below what Ten was counting on.
Management must have their collective fingers crossed that those two favourites from last year, Big Brother and Australian Idol, have repeat ratings performances this year.
Other worries on Ten's radar screen include the Athens Olympic Games and how much advertising it will lose when rival Seven hosts the world's premier sporting event. Longer-term, there's the strong performance of Kerry Packer's Nine Network, historically the market leader and consolidating its position this year.
That said, Ten has shown that its formula of targeting the 16-to-39 demographic while keeping a tight control on costs does pay dividends. Investors would pay to keep an eye on this channel, because the current performance of the share price might be the prelude to the stock breaking out above $3.
www.theage.com.au/articles/2004/04/10/1081326978475.html