UTV Ireland losses could hamper TV sale price

The amount ITV is likely to pay for UTV Media’s television assets could be in doubt on the back of the Belfast-based broadcaster increasing its loss estimates for its Irish television asset for the fourth time this year.
UTV Ireland losses could hamper TV sale price

In a brief stock exchange statement, UTV Media yesterday said that it now anticipates full-year losses of £13m (€18m) for UTV Ireland in 2015, its maiden year of operation.

This is the fourth time the asset’s loss estimate has been raised this year and follows a loss outlook of £11.5m in June.

Yesterday’s estimate has been based on what UTV Media called “a negative impact upon trading within our Irish television business”, based on “uncertainty” caused by the speculation around the ITV deal and the time it has taken to complete talks.

UTV announced in late August that it was in talks with ITV over a sale of its television assets. It followed that up, last month, by saying the two parties had entered into a conditional agreement over such a deal, for a cash consideration of £100m.

“As a result, the board anticipates that losses for this business for the full year 2015 will be approximately £13m,” UTV said, before adding that trading in its radio division and its Northern Irish television unit is currently in line with expectations.

“This announcement may bring that price tag into question and taken together with the earnings downgrade for 2015, we expect the stock to react negatively today,” Richard Stokes of Davy Stockbrokers stated in a research note.

UTV’s share price was down nearly 6%, yesterday, at €2.45.

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