Ten Network anticipates a much needed boost to advertising revenue from its tie up with Foxtel after its full year loss almost doubled to $312.2 million.
Chief executive Paul Anderson said the new advertising deal with Multi Channel Network is bearing fruit and that gross advertising revenue is expected to increase by at least 10 per cent in the first three months of 2015/16.
That's against a backdrop of post-tax losses that worsened by 85.5 per cent for the 12 months to August 31 thanks to a previously announced writedown in Ten's television licence.
Debt increased by $51 million to $131.5 million, an almost five-fold increase on what it was two years ago.
"The MCN deal is going to have a positive effect and give them exposure to marketing revenue they otherwise wouldn't have," IG market strategist Evan Lucas said.
"But in the overall scheme of things, it's a small percentage of earnings as a whole so, although it may do well, it's going to have to work incredibly well if it's going to offset the other parts of the business that are really, really sluggish."
The ratings success of new shows The Bachelorette, I'm A Celebrity Get Me Out Of Here, Spelling Bee, Shark Tank and Gogglebox helped Ten achieve its biggest audiences in total people - and the sought after 25-54 demographic - since 2012 and its highest commercial share since 2011.
The aim is now to convert its status as the only commercial network to grow in terms of total people over the past year into earnings growth.
"The partnership with MCN is creating scale, new efficiencies, improved data capability and broader integration opportunities," Mr Anderson said.
"We expect our partnership to drive further improvement in Ten's revenue share."
The majority of a $154 million capital raising that commenced on Monday will be used to pay down debt.
Ten's shares were placed in a trading halt while pay TV operator Foxtel takes up a $77 million entitlement offer that will give it a 15 per cent stake.
Ten will take a 24.99 per cent stake in MCN, which is responsible for advertising across Foxtel and Ten, at the same time but Mr Anderson declined to give a price.
The Foxtel deal got the thumbs up from the competition watchdog last week and will be followed by a $77 million offer to existing shareholders priced at 15 cents per security, against Friday's closing price of 19 cents.
Ten said television costs, which declined 6.5 per cent year on year, would go up by the same amount in FY16 due to contractual increases and investment in new prime time content it hopes will drive revenue growth.
Ten's problems mirror those at direct rivals Seven and Nine, which lost $1.89 billion and $592.2 million respectively last financial year.
"Programming in general in free-to-air TV is becoming incredibly hard to do and that's the issue around Ten," Mr Lucas said.
"They have an uphill battle and they're not the only one fighting this battle at the moment. Seven and Nine clearly are telling us that."
TEN'S NETWORK NUMBERS
* Net loss $312.2m vs net loss of $168.3m for 2014/15
* Revenue up 4.5pct to $654m
* No final dividend
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