UTV upbeat despite profits falling 11%
PRE-TAX profits at Ulster Television fell by 11 per cent to £5.7 million sterling (€9.1 million) in the first half of the year, reflecting what company chairman Mr John McGuckian yesterday described as "very testing markets".
Operating profit over the period also declined year on year, shrinking by 6 per cent to reach £5.9 million.
The performance was nonetheless positively received by analysts, who chose to focus on the company's relative strength amid general woes in the media sector.
The reaction was mainly based on sound television advertising revenues, which increased by 0.3 per cent at the company in the first six months. This compares to an estimated downturn of 5.6 per cent in total ITV group advertising over the same period.
Mr McGuckian said that UTV was well placed to increase television advertising revenues by 15 per cent in the third quarter.
Television operating profits for the first six months came in at £6 million, down £0.8 million on the previous year, as higher programming costs impacted on performance.
This decline was offset by the group's first full six-month contribution from its Cork-based County Media radio interests, which posted operating profits of £0.8 million, up from the £0.5 million registered in last year's four-month contribution.
Sound results were also delivered by UTV Internet, which recently unveiled a flat-rate internet product in the Republic. It had an operating profit of £0.2 million, compared to a loss of £0.4 million for the same period last year. Turnover grew by more than 50 per cent to reach £0.9 million, while costs were cut by 30 per cent to £0.7 million.
Taken as a whole, the company increased turnover by 8 per cent to £22.5 million, in the first half, a performance that group finance director Mr Jim Downey said offered cause for optimism. UTV is to deliver an interim dividend of 3.95p, up 4 per cent on last year.
Mr Downey acknowledged that UTV retained a relatively high debt level of £22 million on its balance sheet but said the company's "strong underlying cashflow" allowed for the debt to be comfortably supported. He said if no acquisitions were made within the next 12 to 15 months, debt levels would "reduce very rapidly".
He added, however, that UTV remained committed to expanding radio interests in the Republic but said the company was "not in control of that timeframe".
Looking to the whole year, Mr Downey said the group's mood was one of optimism. UTV's shares closed unchanged at €5.91 last night.