Ten Alps

TV programme and magazine producer Ten Alps represents a rare shining light in the challenged media sector, having exceeded expectations with results for the year to March.

The chief reason for its success is the ever accelerating migration of its content – from its TV channels and programmes to its 600 business-to-business and public sector publications – onto the web, slashing costs and leaving behind the increasingly obsolete print mediums. Thanks to this and a firmer grip on costs, Ten Alps' gross margins expanded from 28.2% to 29.8% last year, helping to lift pre-tax profits 5% to £3.3m.

Revenues, however, slipped 1.5% to £80.2m, most sharply in the TV production division despite two acquisitions there. The company spies great opportunities under the Government’s Digital Britain review, and should present strong bids in any tenders for local news.

The communications arm, boosted by the acquisition of a online video specialist, grew sales in spite of advertising spending pressures. The online migration is most strong here and chief executive Alex Connock also believes a ‘business of scale’ can be built around cross-selling its online video capabilities to all the group’s customers.

In the current year, as well as increasing the pace of its online migration, there are plans to continue the roll-out of online ‘portals’ for Ten Alps' B2B publications, to launch online TV accountancy and science channels, and to bid for local news contracts.

House broker Canaccord, whose European CEO is a non-executive director of Ten Alps, forecasts earnings of 4.3p for the current year, which would make the shares cheap on a prospective p/e of less than six. The shares, last backed here in December at 23.5p, have oscillated between 36.5p and 20.5p since and are worth holding onto.