Radio boosts profits at UTV as TV earnings stall

Profits rose by 11 per cent to £9.6 million (€14.2 million) at Ulster Television (UTV) over the first half, as strong radio numbers eclipsed a flat result from television operations.

Interim numbers posted yesterday show that the company's radio businesses delivered operating profits of £1.9 million in the six months to the end of June, an increase of 150 per cent on the same period of 2004.

The growth reflects a significant expansion in UTV's radio operations over the past year. In February, the company paid £7.5 million for Louth/Meath-based LM FM, while in June, it completed the £97 million purchase of the UK-based Wireless Group.

UTV chief executive, John McCann, said the company's radio stations in the Republic had all recorded strong listenership and advertising growth.

Irish radio advertising is on track to be up by 13 per cent in the third quarter, Mr McCann added.

A spokeswoman for UTV said the company was interested in applying for more radio licences in the Republic, but was awaiting "clarification" on ownership rules from the Broadcasting Commission of Ireland (BCI).

The BCI dictates that no company should hold more than 17.9 per cent of all licensed radio services, with UTV currently just under that threshold.

The Wireless Group, which has Talksport as its main brand, contributed £100,000 in operating profits in its first month as part of the UTV group.

Mr McCann said overall revenue at the firm's British radio stations should be up by 3 per cent in the third quarter, while revenues should increase by 7 per cent at Talksport.

Sales across the UTV group climbed by 17 per cent to £35.8 million over the half, with a soft TV advertising market taking the edge off the strong radio result.

TV profits were steady at £7.3 million, while advertising revenue fell by 3 per cent.

The firm expects full-year TV advertising revenues to be down on 2004, but Mr McCann said a lower licence fee and further cost reduction should reduce the impact of any decline.

The interim numbers included exceptional costs of £939,000 related to restructuring and the acquisition of the Wireless Group.

UTV's internet and telephony operations delivered profits of £400,000 over the half, down from £500,000.

The firm flagged strong revenue growth in the area, however, and expects profits to grow over the second half.

Shares in UTV rose by 1p to 446.5p sterling in London yesterday. The firm will pay an interim dividend of 4.75p, up 5.6 per cent.