Access to ITV shows may boost audiences
This announcement by UTV Media brings the financial situation and forecast right up-to-date to the end of November, a period which includes the 2015 Rugby World Cup, which was shown exclusively on its competitor channel TV3. For UTV Ireland, this would have been an undoubtedly tough period to compete for audience share.
For now, I would be sticking to the £13m losses announced by UTV Media for the station. They have provided the market with regular updates on the overall performance and I have no reason to believe at this stage that this will change. To note, UTV Media announced an initial loss of around £3m ahead of the launch of UTV Ireland, which subsequently widened to £6m, then £8.5m, then £11.5m before yesterday's announcement of £13m. However, an initial first-year loss launch would have been expected at the time given the start-up costs involved.
We had previously stated that it would be 2017 before UTV Ireland would break even. However, as UTV Ireland is now expected to be part of ITV next year, this has become somewhat irrelevant given that that group-wide nature of the business will change.
The synergies involved and opportunities which the acquisition will present will also be different. As part of ITV, UTV Ireland, and Northern Ireland for that matter, will have access to ITV's content which should help improve audience numbers.
- Robert Stokes is equity analyst with Davy Stockbrokers