Poor advertising and no big sports tournaments hit UTV pre-tax profits
Pre-tax profits at Belfast-based UTV Media plc fell 16% to £16.9m in 2013 due to weak advertising markets in the first half of the year, its preliminary results state.
The company, which recently announced it would be opening a new TV station, UTV Ireland, in the Republic, said trading conditions had been tough in both Ireland and Great Britain (GB) during the first half of the year.
Matters were made worse in GB by the absence of a big sporting event on flagship radio station talkSPORT.
But it picked up in the second half of the year, with TV advertising in Ireland showing its first growth in more than five years at 11% and radio advertising also going into the black. Group chief executive John McCann said: "The improvement in market conditions continues into the current year, with all of our divisions recording good growth in the first quarter of 2014."
Market conditions also improved for GB radio in the second half of 2013. Overall, group turnover fell by 4% across the year to £107.8m, while group operating profit was also down 14% across the year as a whole at £20.1m.
The company owns the channel 3 broadcasting licence for Northern Ireland and 23 radio stations in Britain and Ireland.
But it announced it has abolished its new media division and would instead be focusing on broadcasting, and bringing digital agencies Simply Zesty and Tibus into its TV division.
It had already sold or was in the process of selling UTV Drive, Recruit NI and internet business UTV Connect. It disposed of its 50% interest in PropertyPal in January. Disposing of those new media interests had led to an exceptional charge of £1.2m.
In November, UTV Media plc announced it was setting up a new channel in Dublin, and had had an agreement with ITV plc to air ITV programmes –including soaps Coronation Street and Emmerdale – from January 2015.
UTV Ireland has announced a programme content licence from the Broadcasting Authority of Ireland to operate the channel for a decade, starting on January 1 2015. It will broadcast Channel 3 in Northern Ireland for another 10 years after reaching a licence agreement with UK regulators.
UTV Media plc's preliminary results for 2013 contained "no surprises," according to Simon McGrotty of Davy Stockbrokers – instead, it was UTV's view on 2014 which stood out. "The revenue growth rates expected by the company in quarter one and into quarter two are ahead of our current forecasts," Mr McGrotty said. "The upcoming Fifa World Cup is helping things in GB Radio, but more encouraging is the strong growth coming from the Irish operations which point to a corner having been turned in this market."