Strong performance by UTV as profits hit £10.4m

By Robin Morton – 27 August 2008

UTV Media has posted a 12% increase in pre-tax profits to £10.4m before exceptional items for the six months to the end of June.

The Belfast-based broadcasting group said the “strong performance” vindicated its strategy to diversify away from a purely television offering.

UTV Media, which has invested strongly in radio and new media in recent years, said that it expected to outperform the sector over the next three months.

John McCann, the UTV Media group chief executive, said new media and radio sectors had both experienced rises in advertising revenue of around 15% over the six months.

Group turnover was up 8% to £62m while pre-tax profit — before one-off costs — rose from £9.3m to £10.4m.

Radio operating profit was up by 31% to £9m, and new media operating profit rose by 51% to £900,000, while television operating profit fell by 15% to £4.7m. The company cut its interim dividend from 5.2p last year to 3.3p this time round, saying it wanted to retain cash, given market conditions and a recent equity raising.

Mr McCann said: “Good news stories about media companies are rare at the moment. However, the group is pleased to announce significant growth in both turnover and pre-tax profits in the first half of 2008.

“I am particularly pleased to report strong performances in both our radio and new media divisions.

“This is further indication that the group's decision to diversify away from a pure television offering was indeed the right one.

“This strategy has been key to protecting the group against the current market volatility and leaves us well placed to take advantage of opportunities arising from an upturn.”

Mr McCann said that although advertising remained “a difficult environment”, the company expected to markedly outperform its peer group over the next quarter.

He added: “With a strong management structure and clear strategic vision, we are confident in the group's ability to deliver robust revenue and profit figures in the face of uncertain macro economic conditions.”

UTV Media said it expected to see a drop over the next quarter in television advertising revenue in the UK of 5%, with its radio revenue in Britain being flat.

But it said such a performance would be better than the predicted sector average of a 9% fall in both cases.