Losses at Setanta UK subsidiary rise sharply to £3.1m Parent company claims it is 'pleased' with group growth

LOSSES AT a UK subsidiary of Irish pay television broadcaster Setanta Sports rose sharply to £3.1 million (€3.9 million) in 2007, according to documents just filed.

This represented a four-fold increase on 2006 as the cost of sales at Setanta Sport PPV outstripped a 48 per cent rise in income.

It also had the effect of increasing the company's accumulated losses to £4.6 million (€5.8 million) and prompted the directors to state that they were "confident that financial support will be available from the ultimate parent company" for it to continue as a "going concern".

The directors stated that "during the year, the development of the business and its financial position at the year-end was in line with expectation and the major operating financial targets were achieved".

They added that the "major focus" of the business going forward would be to "continue to grow revenues".

A spokesman for Setanta Sports said the entity, which is one of a number of subsidiaries operated by the Dublin-based broadcaster, wholesales Setanta's channels in the UK. This would include sales to cable TV operator Virgin Media, which carries some Setanta stations as part of its basic digital offering.

The spokesman added that Setanta was "pleased" by the level of growth in the business.

Last year represented a major milestone in the development of Setanta Sports. It began broadcasting live coverage of English Premier League football, having broken BSkyB's monopoly on those rights. It also secured rights to cover England internationals and the FA Cup.

The broadcaster, which was founded by Irishmen Leonard Ryan and Michael O'Rourke, is reported to have signed up about 1.4 million premium subscribers in the UK and Ireland.

It is available in more than three million homes when its wholesale deals with Virgin Media, UPC Ireland and other operators are included.

Turnover at Setanta Sport PPV rose to £11.3 million (€14.2 million) last year from £7.7 million (€9.7 million) in 2006.

The accounts state that this was due to "increased distribution of the group's television channels".

Its cost of sales almost doubled to £13.9 million (€17.5 million), although its administrative expenses declined by 27 per cent to £476,007 (€601,265).

The company had an unrecognised deferred tax asset of €153,000 at the end of 2007, primarily from trading losses.

The accounts state that it does not expect to have to pay corporation tax in the "near future". No dividend was paid by the company.

The accounts show that the Setanta subsidiary, which is wholly owned by Setanta Sport Holdings, had no employees during 2007.

© 2008 The Irish Times

This article appears in the print edition of the Irish Times