UTV radio ad revenues bucks market decline

Broadcaster UTV today said it had bucked the trend for declining radio advertising revenues, as its radio business delivered profits up by more than 50% last year.

The parent group of talkSport revealed its radio business accounted for the bulk of its full year earnings for the first time, driving total group operating profits of £27.4m (€40m), up 6% on 2005.

Radio advertising revenue in the group’s Great Britain offerings grew by 6% on a like-for-like basis against a market decline of 5% – with talkSport revenue up 18% thanks in part to last year’s football World Cup.

UTV posted operating profits for its radio division up 52% last year at £14.6m (€21.3m) compared with a 24% drop to £11.7m (€17m) for its television arm.

But the group said while TV advertising revenues slumped by 9%, it had outperformed the struggling wider ITV network, which suffered a 12% drop.

UTV said its strategy to focus on radio was paying off, despite start-up losses of £2.6m (€3.8m) for its two new radio stations in Belfast and Edinburgh.

John McCann, group chief executive of UTV, said: “Our strategy of developing media interests outside our TV business through the acquisition of radio assets in both Great Britain and Ireland has resulted in our radio divisions contributing the larger proportion of the group’s revenue and operating profit for the first time.”

He added that UTV’s television interests were continuing to outperform the market so far this year, with radio also maintaining its strong growth as advertising revenue rose 2% in the first quarter against a 4% decrease in the market.

UTV has been progressively expanding its radio operations and last year made two merger attempts with Scottish media giant SMG, which owns most of Scotland’s commercial TV network as well as Virgin Radio.

SMG turned down both offers from UTV – a deal which would have created a group worth about £400m (€585m).

SMG’s chairman Chris Masters and five non-executive directors quit in February amid a boardroom clearout sparked by a revolt from major shareholders opposed to the Glasgow-based media group's then proposed merger with UTV.

The tie-up talks collapsed after UTV said it had identified concerns over SMG’s pension deficit.

But another potential takeover target has arisen for UTV after Heart FM owner Chrysalis announced earlier this year that it was considering its future ownership of the group’s radio division.