British TV group Carlton Communications a fall in first-half profit on persistent weakness in the advertising market, and said it would halve its dividend this year.
Carlton, a major shareholder in Britain's largest commercial TV network ITV, said it had seen a 6.3 per cent drop in first-half comparable ad revenue. The company believed the fall was cyclical, but it would be difficult to forecast a bounce.
Carlton shares, which had rallied eight per cent over the last week, slipped 12 pence or 2.9 per cent to 400p in early trade.
Pre-tax profit fell to £65.8 million sterling in the six months to March 31st from an equivalent £97 million sterling.
Most British media stocks have suffered this year as ad revenues plunge from the buoyant levels of early 2000 on slower US growth and a lack of marketing budgets of many new economy companies launched last year.
Carlton said its pre-tax investment in ONdigital, a terrestrial digital TV platform it shares with Granada, rose 20 per cent to £83.3 million in the first half, with £9.4 million spent on sports channel ONsport.
ONdigital, which will be rebranded as ITV Digital later this year, has targeted breakeven and 1.7 million subscribers by early 2004, which Carlton said would require around £200 million more in spending over the next three years.