Company Snapshot: UTV Media plc.
Record trading but losses at UTV
UTV Media is a Stock Exchange quoted group of television, radio and internet companies operating in Northern Ireland, Great Britain and the Republic.
For the financial year to December 2011, the group reported an overall trading and pre-tax loss. However, that loss is the outcome of putting together record trading profits, offset by a further deduction of an impairment charge of £45m in the accounts of Radio Ireland. This followed an impairment charge of £35m in 2010.
The impairment charges are attributed by the group to both a downward revision of the growth forecasts for the Radio Ireland division along with the use of a higher country specific discount rate for the Republic reflecting a perceived greater sovereign debt risk.
Without the impairment charge, operating profit on continuing operations in 2010 was £21.3m and this increased in 2011 to £23.3m. With the improved trading position, the group has been able to reduce borrowing outstanding by just over £20m. In turn, the directors have been able to recommend an increased dividend to shareholders of 6p per share for the year; a 50% increase on the dividend in 2010.
Perhaps contrary to some perceptions, the television business accounted for only 24% of the operating profits. However, the TV results showed a good performance with operating profit up by 18%.
The radio division reported operating profits nearly three times as large as TV although the increase was less than 1%.
At the year end, the UTV pension scheme is carrying an actuarially assessed pension fund deficit of £8.6m. This was up from £6.8m a year earlier.
Due to effect of the tranches on impairment charges, the balance sheet value of shareholders' funds has fallen from £130m two years ago to only £84m in 2011.