UTV buoyed by radio growth

TalkSport owner UTV pointed today to signs of recovery in the UK radio advertising market as it delivered a 4% rise in operating profits.

The broadcaster said a “very strong” performance at its radio operations in Great Britain offset a weaker showing from its Irish stations as radio operating profits rose 7% to £6.8m (€10m).

Radio helped lift group-wide operating profits 4% to £13m (€19m) after the decline in television advertising revenues also slowed during the six months to June 30. Radio accounts for 55% of group revenues.

The group said talkSport was marginally ahead of a UK radio advertising market that declined by 1%, despite tough comparatives with last year when the station benefited from significant revenue gains during the World Cup.

UTV added that it expected to see growth at the GB radio division in line with the market – forecast at 6% – during the three months to the end of September.

Weak local advertising revenues from UTV’s Irish radio stations offset a strong rise in national revenues resulting in a flat performance during the first half of the year.

UTV said its television division, which owns the Northern Ireland ITV franchise, continued to outperform the ITV network, with advertising revenues down just 1% compared to a fall of 9% at ITV1.

The company added that conditions in the advertising market remained challenging and it was also impacted by Contracts Rights Renewal (CRR) restrictions, which allow advertisers to pay less if audience figures fall.

A recent stronger programming performance is expected to counter some of the revenue drag from CRR if this is sustained into the autumn.

Chief executive John McCann said: “UTV has again performed strongly in a challenging period for the media industry.

“I am particularly pleased with the performance of the television and UK radio divisions which have once again outpaced their peers.”

He said the outlook for the third quarter to the end of September was “positive”, although television is expected to underperform ITV1 due to tough comparatives with last year when revenues grew 6%.

“We expect growth in UK and Irish radio advertising markets and television should start to benefit from better programming,” he added.

Analysts at Numis Securities said the results were ahead of their expectations, but cut their full year pre-tax profits forecasts from £18.5m (€27.3) to £18.1m (€26.7m) to reflect the subdued outlook for television.