Between January 2 and 9, shares of Ten Network Holdings Limited (ASX: TEN) jumped 31% from 27.5 cents to 36 cents following a grand total of zero new pieces of information being released about the company. As is often the case when companies experience outrageously fast share price growth, without any meaningful announcements from the company, the ASX issued Ten a speeding fine (also known as an ASX Price and Volume Query) to find out if there was any important information withheld from the public.
In its response, Ten advised that it had no explanation for the rapid rise of its share price, but noted that ongoing good publicity about its coverage of the T20 Big Bash League could be a contributor. Ten has recorded average audiences in excess of 800,000 viewers for matches during the holiday period, which may lead to improved advertising revenue and thus earnings for the 2013-14 financial year. The solid audience numbers will be music to the ears of long-term shareholders who have seen the share price fall 63% in two years and contributed $200 million in new funds last year to reduce debt.
A secure future
The capital raising and sale of advertising firm Eye Corp has left the company in a much better position; net debt has decreased from $416 million to $28 million and other business initiatives are expected to deliver a net profit in 2013-14, after a $5 million loss in 2012-13.
Ten has also been gaining advertising market share from its two major rivals; Seven West Media Ltd (ASX: SWM) and Nine Entertainment Co Holdings Ltd (ASX: NEC). In November, Ten increased its share from 20.4% to 21.2%, with analysts noting that Ten had good momentum leading into the holiday period, after delivering above-market growth in the five-preceding months.
At the time, Ten chief sales officer Louise Barrett said: "The November SMI numbers again highlight the fact that Network Ten's revenue and revenue share have stabilised and are slowly improving."
Foolish takeaway
Things are looking up for Network Ten. Advertising revenue has stabilised and appears to be increasing, debt has been reduced to the point where it is no longer hampering the company, and key shareholders Lachlan Murdoch, James Packer and Bruce Gordon have essentially provided a guarantee over its remaining debt, assuring its immediate future.
