TV3 parent writes down goodwill value by €118.7m
THE PARENT company of Irish commercial broadcaster TV3 wrote down the goodwill value of the business by €118.7 million last year, its latest accounts show.
This was largely responsible for Tullamore Beta Ltd recording a loss for 2009 of €165.3 million.
Tullamore Beta was the entity used by British private equity group Doughty Hanson to acquire TV3 for €260 million four years ago.
Advertising revenue has declined sharply since then as the Irish economy has gone into recession. This has resulted in Doughty Hanson reducing the goodwill value placed on the Ballymount-based independent broadcaster in the past couple of years.
In 2008, Tullamore Beta recorded a goodwill impairment charge of €53.7 million.
In addition to the impairment hit last year, Tullamore Beta booked a standard goodwill amortisation charge of €16 million.
The latest accounts show the goodwill value attributed to TV3 at the end of 2009 was just €20.9 million.
It had been €155 million at the end of 2008.
In terms of trading, Tullamore Beta recorded turnover last year of €54.3 million, down from €62.4 million in 2008, as ad revenues fell in the recession.
This comprised revenues for both TV3 and digital station 3e (formerly Channel 6, which it acquired in August 2008).
Separate accounts for these stations show that TV3’s turnover declined by 16 per cent last year to €51.7 million, while 3e’s was flat at €2.5 million.
TV3 Television Network Ltd recorded a profit of €1.9 million in 2009 compared with a loss of €417,000 in 2008.
But Channel 6 Broadcasting Ltd, which runs 3e, was once again in the red due to high overheads. Losses at the station narrowed to €4.2 million last year from €5.1 million in 2008.
Commenting on these results, chief executive David McRedmond said TV3’s ad revenue had risen by 5 per cent this year, while 3e was now trading profitably.
“Television was hit first in the recession, and it’s probably now recovering quicker than other media,” he added.
TV3 Television Network Ltd paid a €6 million dividend to Tullamore Beta during 2009.
Tullamore Beta’s operating loss doubled last year to €135 million as a result of the goodwill charges.
In addition, it paid interest on its borrowings of just more than €30 million last year, down from €37.4 million in 2008.
This brought the loss for the year to €165.3 million.
At the end of 2009, Tullamore Beta had a deficit in shareholders’ funds of €191.6 million.
The business was refinanced in June of this year by Doughty Hanson, which made a capital contribution of €67.5 million to the company.
Of this sum, €9.1 million was used to repay bank debt. The business also repaid €54 million of intercompany loans, with the balance used for working capital purposes.
TV3 launched in 1998, and hit shows include Coronation Street, X Factor and The Apprentice. 3e’s hits include US shows Family Guy and American Dad.