ferrets stock to watch: ten network holdings ltd

Ferret's Stock to Watch: TEN NETWORK HOLDINGS LIMITED
09:20, Friday, December 08, 2006

FREE TO AIR TV NETWORK WINS STAR RATINGS DEMOGRAPHICS

Sydney - Friday - December 8: (RWE Aust Business News)
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OVERVIEW
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Ten Network Holdings Ltd (ASX:TEN) is not the best show in town
yet in relation to profit figures, but it is getting its share of the
free-to-air audience and business support.

Ten has been the Australian commercial television sector's star
ratings performer, winning bigger audience shares than its rivals in all
major demographics in 2006.

The company has taken its sixth consecutive annual victory in the
16-39 demographic, and did so with its highest-ever commercial share.

And, for the first time, TEN is number one in the coveted 18-49
demographic that accounts for around 75 per cent of advertisers' TV
dollars.

The company this week reported first-quarter 2007 earnings,
continued best-in-class margins and a 9c dividend.

But EBITDA fell 15.6 per cent to $107.2 million in the first
quarter from $127.1 million a year earlier, on revenue down 0.4 per cent
to $293.9 million from $294.9 million.

Ten will pay a fully franked ordinary dividend of 9c a share on
January 11, maintaining the policy of distributing 100 per cent of
available earnings.

Ex-dividend date is December 20 and record date December 28.

Ten's second dividend for 2007 will be announced next June and
paid in early July.

Executive chairman Nick Falloon told the annual general meeting
on Wednesday that the television advertising market had remained subdued
in the early months of the financial year.

However, there was now some sign of improvement in the second
quarter, and he expected the company's television business to benefit.

"We're now seeing modest year-on-year growth and expect TEN to
steadily gain traction," Mr Falloon said.

He added TEN was capitalising on its outstanding ratings in
advertiser renewal negotiations and was confident in returning to a 30
per cent-plus revenue share in the coming year.

The executive chairman noted TEN had again secured an EBITDA
margin in excess of 40 per cent in the first quarter.

Disciplined expenditure had seen television cost growth for the
three months to November 30 contained to less than 6 per cent, despite
TEN's investment in a number of new Australian programs including
Jamie's Kitchen Australia and Tripping Over.

SHARE PRICE MOVEMENTS
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Shares of Ten Network yesterday rose 5c to $3.47. Rolling high
for the year is $3.60 and low $2.56. Dividend is 16c a share to yield
4.68 per cent. Earnings per share is 11.49c and p/e ratio 29.77. The
company has 398.8 million shares on issue with a market cap of $1.3
billion.

It was certainly a big day for the Ten Network on Wednesday.

The company unveiled details of its "highly differentiated,
large-scale digital media business" that will formally launch in
February.

Ten's main website, www.ten.com.au, is to focus on video
streaming and downloads, and on communities surrounding core TV brands.

"Essentially, it's TV on the internet," said general manager of
digital media, Damian Smith.

"We're taking great broadcast brands and making them available
in the right new way for an audience that was 'born digital'."

Ten.com.au will be supported by more than 50 program sites and
relevant online communities, with appropriate versions and extensions of
programs for portable and mobile devices, as well as for broadband
users.

Ten says its approach to digital media is as differentiated as
in broadcast; it has neither licensed its digital future to a third
party nor replicated the search, e-mail and classifieds-based attributes
of the portals.

"Ten is the number one broadcast network for 16-39s (a subset of
our target 18-49 profile, which we also lead), and it's the power of
that programming that will drive our online, portable and mobile
strategies," Mr Smith added.

"We'll offer advertisers significant new opportunities to build
brands and also to directly engage with consumers."

Mr Smith noted Ten had seen numerous examples of strong audience
demand for more, different and extended TV content via digital media
this year.

Examples include:

* Ten's recent free, advertiser-supported downloads of scenarios
from Thank God You're Here were a huge hit and were for several weeks the
number one podcast in Australia.

* Ten's flagship digital franchise, Big Brother, was both the
number one television website in Australia in 2006 and also led the way
in true cross-platform integration of TV, internet, interactive
services, and mobile phone video content.

* Nearly 20 per cent of the page views to the Australian Idol
site this year have been video streaming (more than 2.5m streams in
total), indicating huge demand for additional video content.

Mr Smith added Ten's digital media activities would expand Ten's
audience.

"Television will continue to be the mass audience-driver in
under-50s," he said.

"But we're now adding new platforms and opportunities to engage
our audience outside traditional broadcast times and places," Mr Smith
concluded.

BACKGROUND
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Ten Network Holdings Ltd was listed on March 31, 1998.

The Ten Group Pty Ltd owns and operates Network Ten's (TEN) five
mainland capital city television stations.

It also owns 100 per cent of Eye Corp Pty Ltd, one of Australia's
largest out-of-home media operators, with businesses in Australia, New
Zealand, Asia, Europe and now in North America.

Ten's television operations have consistently delivered
outstanding earnings through a 'seriously different business model'
focusing on clear differentiation from competitors, targeted
demographics, careful expenditure, efficiency, profitability and returns
to shareholders.

Network Ten has the highest operating margins of Australia's
three national commercial television broadcasters and is among the
Australian media sector's most profitable companies.

EYE domestically boasts out-of-home sector-leading profits and
margins, from its portfolio of large format signage, internal and
external airport advertising, shopping centre media and now small format
signage in higher education institutions.

EYE is committed to continued product redevelopment and is
determined in pursuing new markets.

The Ten Group is the operating subsidiary of Ten Network
Holdings Ltd and consistently ranks among the Australian media sector's
highest-yielding stocks.

Ten also has an interest in its two regional broadcasting
affiliates, Southern Cross Broadcasting (ASX:SBC) & Telecasters
Australia.

ENDS

Copyright © 2006 RWE Australian Business News. All rights reserved.