UTV 11% profit rise buoyed by radio arm

MEDIA group Ulster Television has recorded an 11% rise in profits helped by strong gains from its radio division.

The company, which owns Cork's County Media and Dublin's Q102, said group operating profits rose to £9.6 million (€14.2 million) from £8.6m (€12.7m) in the first half of 2004.

UTV chief executive John McCann said the company's radio division recorded a 150% rise in operating profits and strong listenership gains.

"Radio advertising revenue in Ireland continues to experience good growth and is expected to be up, on a like-for-like basis, by 13% in the third quarter. Q102, almost doubled its market share in the competitive Dublin market and is on target to break even this year," Mr McCann said.

Turnover for the period was ahead by 17% to £35.8m (€53.05m), though television advertising revenue was down 3% in the first half with revenues dropping by 11% in the last three months of the half.

The company blamed the fall on the British general election in May, which caused a significant reduction in advertising expenditure.

Operating profit for the television channel remained flat at £7.3m (€10.8m).

"We expect advertising revenue in the third quarter to be down by 2%.

"With regard to the remainder of the year, television advertising is expected to be down on last year, but we will continue to closely control costs and the reduction in licence fee will help to offset any revenue reduction," Mr McCann said.

UTV's new media assets - screen advertising, broadband internet and telephone services - had a mixed six months.

Turnover was 56% ahead at £3.9m (€5.7m), but operating profits slipped by £300,000 (€444,000) to £100,000 (€148,000) because of the cost of rolling out new products.

The company said two-thirds of its new media revenues were generated in the Republic.

"Broadband and telephony continue to drive strong revenue growth in new media which is expected to be up 60% in the third quarter," Mr McCann said.

UTV said that LMFM, acquired in February and Britain's TalkSport, which it bought in June were trading in line with expectations.

Shareholders in the company will get an interim dividend of 4.75 pence, which will be paid out of earnings per share of 12.05p.

"While the performance of the group's television business has been a disappointment, the group is now a more diversified media player and its Irish radio businesses continue to perform strongly while its recently-acquired UK radio businesses remain in good shape," Goodbody Stockbrokers said.