BELFAST-BASED broadcaster UTV increased its pretax profit by more than 9 per cent in the first six months of this year, in spite of a significant decline in its television advertising revenues.
UTV yesterday posted a pretax profit, after exceptional items, of £9.8 million for the six months to the end of June. This compared with a surplus of just under £9 million in the same period of 2007.
Group turnover rose by 8 per cent to £62 million during the period, with its radio and TV units experiencing contrasting fortunes.
UTV's radio operating profit rose by 31 per cent to £9 million, while its TV division reported a 15 per cent decline to £4.7 million.
UTV said its television revenues fell by 4 per cent in the six-month period to £18.3 million.
"The radio division has made up the lost ground from television," UTV group chief executive John McCann told The Irish Times. He added that the drop in revenue mirrors a decline in advertising across the TV industry in Britain.
UTV said the three months to the end of September would be a "challenging" period, although it expects to outperform its peers.
The broadcaster said its TV revenues would decline by 5 per cent against a fall of 9 per cent across the industry in Britain.
Revenues are expected to be flat at its British radio interests, compared with a decline in the sector of 9 per cent. Its Irish radio business is expected to achieve like-for-like growth of 1 per cent.
UTV has diversified the business away from television over the past eight years and now owns 25 radio stations in Ireland and Britain. Radio is now roughly twice the size of the TV division in revenue terms.
In radio, the Irish stations booked a 47 per cent rise in revenues to £11.4 million, boosted by the acquisition of FM104 on April 10th for €52 million. FM104 made a contribution to UTV's pretax profits of £569,000 in the 11 weeks to the end of June.
If FM104 had been under its ownership at the start of 2008, it would have contributed profit before tax of £1.4 million and revenues of £3.8 million, UTV added.
In Britain, its radio division increased sales by 5 per cent to £25 million. Its national station talkSport boosted its revenues by 18 per cent to £12 million, helped by a revamp of its schedule.
"The star performer has been talkSport," Mr McCann said. "We've managed to successfully transform its image from being a station with cheap and cheerful coverage and this has gone down well both with our listeners and with the advertising community."
UTV's results show that its new media division grew revenues by 15 per cent to £5.8 million, while its operating profit was up 51 per cent to £900,000. This division was bolstered during the period by the acquisition of Irish web content business Tibus for £5 million.
UTV took a "restructuring" charge of £547,000 in the first six months of the year. Mr McCann said this related to a voluntary severance scheme that resulted in 15 staff leaving its TV division.
UTV's net debt at the end of June was £150 million. On July 15th, the company completed a rights issue that raised £49.9 million, which has been used to reduce its debt burden.
