Profits at UTV's radio unit jump 52% to £14.6m

UTV's radio operations outshone its television division last year, with the radio division generating a larger proportion of revenue and operating profit than its core television business for the first time.

Radio operating profits jumped 52 per cent to £14.6 million (€21.3 million) in 2006, while television operating profits fell 24 per cent to £11.7 million, according to UTV's full-year results, published yesterday. The group suffered a 7 per cent drop in television revenues as a strong ratings performance in Ireland could not shelter it from the impact of declining audience ratings for ITV1.

With television advertising revenues falling 9 per cent, UTV outperformed the ITV network, which suffered an overall 12 per cent drop in advertising revenue.

Although the ITV network's revenues are expected to be down a further 9 per cent in the first quarter of 2007, UTV said that its television revenues so far this year should be flat thanks to stronger local demand from advertisers and a higher audience share at peak viewing times.

Chief executive John McCann said he remained confident that UTV would continue to outperform against a backdrop of difficult trading conditions in the British advertising market.

The radio operating profits of £14.6 million do not include start-up costs of £2.6 million for the group's new radio stations in Belfast and Edinburgh. These stations are expected to incur further losses of £2 million in 2007, according to UTV's finance director, Paul O'Brien. UTV said that its Irish radio stations continued to perform strongly, with advertising revenues forecast to be up by 9 per cent in the first quarter of 2007.

Advertising revenues from its Irish radio stations, which include Q102 in Dublin, rose by 12 per cent last year. UTV said that the performance of its Talk Sport radio station in Britain, which increased turnover by 18 per cent, was impressive in the context of a declining UK radio market.

New media profits rose 31 per cent to £1.1 million, following a 17 per cent rise in turnover in the new media division. Overall, UTV made an operating profit of £24.8 million in 2006, down slightly on 2005.

But the group made a pre-tax loss of £3.9 million last year, significantly down from a £19.6 million profit in 2005. The loss was due to a £20.7 million exceptional charge related to a review of the value of the group's assets.

Turnover rose by 22 per cent to £113.6 million and was boosted by the first full-year impact of the Wireless Group, which UTV acquired in 2005. Earnings per share were down 15 per cent to 23.08p, while net debt was cut by £8.6 million to £117.6 million.