What Happened to the TEN Network Share Price?
TEN Network Holdings Ltd [ASX:TEN] is a news content and entertainment broadcaster. TEN, ELEVEN and ONE are the company’s free-to-air channels. TEN Network also operates various online platforms like TENplay, which offers access to most content previously broadcast. The company closed 6.90% lower today.
Why Did This Happen to TEN Shares?
Bad news. The operating costs for the television network are expected to increase by 8% for the 2014 financial year. One-off events such as the coverage of the Sochi Winter Olympics and the yet to begin Glasgow Commonwealth Games have contributed to the $55 million in total television costs for this year.
In addition, revenue for the financial year is expected to fall 3.5%–4.5% compared to 2013.
What Now For TEN Network Holdings Ltd?
The 2013 financial year was a disaster. Total revenue fell 12% to $660 million. On top of this, the company has been unable to reduce network costs and has resorted to shedding staff to improve their bottom line.
TEN also mentioned today that the ‘benefit’ of sacking 150 staff in May won’t flow through until a 2015 financial guidance is provided.
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The key to TEN’s fortunes will be a ratings improvement. In the last six weeks, the network’s audience has increased 38% (compared to the previous rating period of ten weeks).
Currently, TEN has a free-to-air market share of 20.7%.
Overall, the stock has performed for the past 18 months. Support for the stock is forming around 25 cents, so the stock may have reached its low point for now.
The 2013 dividend was cut last year, and investors would be foolish to expect a dividend for the 2014 financial period.
Shae Smith+
Editor, Money Morning
