TAL.L Share News (TAL)

When Ten Alps advertised a debate on education budgets on its Teachers TV website on 21 October it probably did not realise that it could be the main topic following the cancellation of the Teachers TV contract by the government. Shares in Ten Alps fell by one-third to 10.5p following the news. Ten Alps says that it has received notification that the Department for Education will terminate the Teachers TV project on 29 April 2011. Ten Alps says that it is considering its options. The company is also undertaking a corporate reorganisation in order to reduce its overheads. Ten Alps is the majority shareholder of the UK government-funded Teachers TV (www.teachers.tv), which has been broadcasting for more than five years. This has historically been a strong contributor to the content side of the business but recent performance payments have been lower than before because the terms had been changed. The service has migrated from satellite and cable to online and that will save money, but the government obviously thought that it was not enough. At the time of its full year figures, Ten Alps said the contract had a six-month notice period and was contracted to 2013. The accounts also said that the business represented £10m-£11m of annual revenues. The loss of this revenue will undoutedly hurt Ten Alps whose revenues were £66.1m in the year to March 2010. The operating profit was £4.45m. Ten Alps chief executive Alex Connock has talked in the past about potential interest in the Teachers TV concept in other territories. He was particularly keen on the US market where he felt there was a big gap in the market. Ten Alps has sold the Teachers TV format to the Canadian market and is negotiating a deal in Thailand. Whether the cancellation of the UK service will scupper this international expansion is yet to be seen. Online science channel Newton TV is being tested thanks to a grant from the North East's development agency. "The online science channel is set to be a joint venture with the Science Museum, Open University and Royal Institution in which Ten Alps will be majority shareholder", according to the Ten Alps accounts. The model assumes commercial and foundation content sponsorship but it is yet to launch. A fortnight before the latest news Herald Investment Management bought 2m shares taking its shareholding in Ten Alps to 17.4%.