UTV Media has recorded an "encouraging" recovery in revenues across its main television and radio divisions so far this year, the company said as it reported lower profits and revenues for 2013.
“Optimism that a corner is slowly being turned” bodes well for its planned expansion in the Irish television market in 2015, the Belfast-based group indicated.
The company, which collects almost half of its revenues from its radio interests in Britain, said total revenue from continuing operations fell 3.9 per cent to £107.8 million last year, while pretax profits declined 15.9 per cent to £16.9 million.
However, it was a year of two halves for the TalkSport owner, with revenue plunging 11 per cent in the first half of 2013, but running up 3 per cent in the second half, and the rebound has continued in the first four months of this year.
“The contrasting performances of the first and second halves of the year are evident in these results, with group operating profit down 36 per cent in the first half of the year and up 10 per cent in the second half,” said group chief executive John McCann.
Operating profit in the company’s television division dropped 1.5 per cent to £7.4 million in 2013. However, after five years of decline, television advertising revenues recorded growth of 11 per cent in the second half of 2013. Total television revenue has now climbed 5 per cent in the first quarter of 2014, with further advances in April.
UTV’s radio businesses in Ireland made an operating profit of £5.1 million last year, which represented a decline of 14 per cent. The division, which includes the stations FM104, Q102 and LMFM, saw its revenues fall by 1 per cent to £20.8 million last year. But Irish radio advertising revenues have increased 9 per cent in the first quarter of 2014, with single-digit growth in April, the company said.
“It is too early to know if this growth in Irish revenue can be sustained for the rest of the year, and indeed into 2015, but the trend so far is clearly encouraging, particularly in light of our expanding television interests in Ireland,” said UTV chairman Richard Huntingford.
The group will launch a new channel tailored for Republic of Ireland viewers in January 2015.
UTV endured an “unexpectedly difficult year” in the British radio market, but revenues in this division are also now improving, with TalkSport’s fortunes set to be lifted further still by this summer’s World Cup in Brazil, during which it will broadcast commentary on every match.
As part of a “broadcasting-focused strategy”, UTV is selling its broadband business UTV Connect and has already divested itself of the portals UTV Drive, Recruit NI and Propertypal. Its remaining new media acquisitions, digital marketing agency Simply Zesty and web designers Tibus, have been subsumed within the television division.
In a note to investors, Davy Research media analyst Simon McGrotty said the revenue growth rates cited by the company in its statement on current trading were ahead of its forecasts. “The biggest take-away” from the outlook statement was the strong growth being delivered by its Irish operations, he said.
A final dividend of £5 million representing 5.25p per share is proposed for approval at the annual general meeting to be held in May. This will maintain the full-year dividend at 7p per share.
