UTV writes off €26.5m in radio stations' value

BELFAST-BASED broadcaster UTV has written off €26.5 million from the value of its radio investments in the Republic following a reorganisation of its business south of the Border.

This emerges from accounts filed recently by UTV Radio (RoI) Ltd, a holding company for its commercial radio stations here.

The accounts show that the value of the investments was written down from €87.1 million in 2006 to €60.6 million at the end of last December.

UTV built its portfolio of radio assets in the Republic through a number of acquisitions in recent years, often paying high multiples for stations. This has helped UTV to diversify away from its traditional television business.

The writedown does not include its investment in Dublin youth station FM104, which UTV bought this year from Denis O'Brien for €52 million.

The accounts indicate that UTV Radio (RoI) waived €25.9 million in intercompany loans with its subsidiaries. Separate accounts for the UTV radio stations show that they all recorded profits in 2007.

The biggest surplus was recorded by Radio County Sound, which broadcasts to Co Cork. It achieved a pre-tax profit of €16.4 million last year compared with €2.1 million in 2006. This included a €14.1 million one-off gain following UTV Radio's decision to waive a repayment due to the holding company.

Radio County Sound earned turnover last year of €3.8 million, up 6.6 per cent on the previous 12-month period.

Cork Media Enterprises Ltd, which holds a licence for Cork city, made a profit of €4.2 million in 2007, up from €3.8 million in 2006.

Its turnover increased by 6.6 per cent during the period to €8.1 million.

Independent Broadcasting Corporation Ltd, which broadcasts in Louth and Meath as LMFM, posted a pre-tax profit last year of €900,438 on revenues of €3.2 million. In 2006, the station achieved a pre-tax surplus of €716,504 on turnover of €2.9 million.

"At an operating level, profits from the radio operations grew in 2007 and are expected to continue to grow in 2008," the directors' report stated.

City Broadcasting Ltd, which operates Q102 in Dublin, achieved a pre-tax profit of €859,949 in 2007, just over double the level of the previous year. This was in spite of a decline in turnover during the year to €4.5 million from €5 million in 2006.

At an operating level, the station was actually lossmaking. The surplus was the result of an exceptional gain of €1.25 million from the waiving of money owed to its parent as part of UTV's restructuring programme.

City Broadcasting had accumulated losses of €2.9 million at the end of last December.

"Market conditions proved difficult in 2007 and similar conditions are anticipated for 2008," its directors' report stated. "There is an expectation to grow revenues during 2008 along with increasing listenership."

Treaty Radio in Limerick, meanwhile, made a pre-tax profit of €2.2 million last year on revenues of €4 million.