LONDON (Alliance News) - UTV Media PLC Friday posted a small decline in pretax profit for its first half, hit by costs related to its newly established UTV Ireland channel, which performed below expectations in its first six months.
UTV posted a pretax profit of GBP980,000 for the half year to end-June, down from GBP1.0 million a year before, despite revenue rising to GBP58.3 million from GBP57.8 million, as a result of a step up in operating costs related to the new channel.
The Irish broadcaster proposed an interim dividend of 1.82 pence, unchanged from the previous year.
UTV said that UTV Ireland's share of commercial "impacts", a measure of television viewership, during the first half was 11.4%, below its original forecast of around 15%. The business had costs of GBP12.4 million, against revenue of GBP4.9 million, and as a result reported an operating loss of GBP7.5 million in the period.
The company said that the channels progress is "closely linked" to the performance of ITV PLC's programming, as it is the mainstay of its output, and noted that " there are new series scheduled for the autumn which have been favourably commented upon." It is also implementing actions to improve the channels performance.
UTV did not provide further details on the potential sale of its television assets, having confirmed Monday that it was holding talks on the potential sale. The Guardian newspaper had reported over the weekend that ITV is in talks to buy the company.
"The challenges of establishing a new television channel are evident in these results which reflect the significant losses incurred by UTV Ireland in its first six months on air. Less evident, but not to be lost sight of, is the inherent value created by the establishment of a mainstream television channel in Europe's fastest growing economy, with long term licensing, programme supply and infrastructure in place," said Chairman Richard Huntingford in a statement.
Shares in UTV were up 0.9% at 169.49 pence Friday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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