UTV interim profit rises 24% to £4.5m

Ulster Television (UTV), is looking for further strong growth following the 24 per cent increase in pre-tax profit to £4.52 million in the six months ended June 30th 1998.

This growth is being maintained in the third quarter, said the chairman, Mr John McGuckian. However, the final quarter is expected to be "more challenging, primarily because of the increasing competition both in the UK-wide and all-Ireland markets from which we source our revenue".

UTV, which is highly liquid, is continuing to seek ways to returning some of group's cash to its shareholders. Its latest balance sheet shows cash of £18.3 million compared with shareholders funds of £18.1 million. This cash will be boosted further, by more than £12 million, when it sells its remaining stake in Societe Europeanne des Satellites (SES) which was floated on the Luxembourg Stock Exchange in July.

Managing director, Mr Desmond Smyth, said there are a number of options being explored, including a special dividend or a buy-back of shares but no decision has been made. Nor will it be until early next year when the outcome of the licence renewal should be known and the lockin period on the SES shares will have ended. The sale of one sixth of its holding in SES (all shareholders agreed to this to facilitate the flotation) produced a profit of £2.5 million. The remaining investment in SES is valued at £13.6 million at the issue price (£16 million now) compared with a book value of £0.8 million. UTV agreed to keep the shares for six months. No decision has been made to sell the holding but there is no strategic reason to hold on to them.

UTV expects a decision on its application to the Independent Television Commission for an extended 10 year licence before the end of the year. UTV has noted that it will have the option of either accepting the revised terms, or rejecting and re-applying for a new extended licence from either 2000 or 2001.

The latest results show a 12 per cent rise in the interim dividend from 2.50p to 2.80p. The adjusted earnings per share grew from 4.01p to 4.66p.

Turnover increased by 6.8 per cent to £17.8 million. The group said this consisted almost entirely of advertising revenue and was "well ahead of the collective increase for ITV of 3.8 per cent".