The newly launched UTV Ireland television station is expected to generate losses of around £6m (€8.3m) this year — roughly double the amount initially anticipated by parent group, UTV Media.
The Belfast-headquartered broadcaster had, when presenting its half-year financial results last August, suggested the channel, launched in January, would incur an operating loss of £2m-£3m in its maiden year, before moving into profitability.
However, despite maintaining its long-term bullishness for the venture, UTV Media’s management said yesterday that the channel’s first-year loss is likely to be closer to £6m this year.
This will largely be due to delays in gaining public service designation, advertising agency negotiations and a slower-than-expected audience build.
Nonetheless, group chairman Richard Huntingford said audience share is starting to grow, less than three full months into transmission.
“I am confident that our ambition for UTV Ireland, to be the second most-watched channel after RTÉ 1, within a two-year timeframe, will be achieved,” he said.
Group chief executive John McCann said management is confident that UTV Ireland will “emulate its older siblings, and over time build a stronger audience base”.
UTV Media’s full-year 2014 results, published yesterday, showed an 8.2% jump in revenues to £116m, but largely static profit movement, with the pre-tax position barely moving at just over £17m.
Net debt fell £3.4m to £46.2m and the group’s full-year dividend was up marginally at 7.25p.
Group operating profit fell from £20.1m to £19.7m, with last year’s total hit of £3m in start-up costs relating to UTV Ireland.
Despite foreign exchange headwinds impacting profitability in Ireland, the group said the macroeconomic environment, here and in Britain, is improving and that the recovery in the Irish radio advertising market is underway, though modestly.
In the current quarter, UTV expects its Irish radio division (which includes the likes of Cork stations C103 and 96FM and FM104 and Q102 in Dublin) to show flat advertising revenues, with further weakening of the euro reducing this to around 10% down.
According to management, the current year has started “in line with our expectations for our established broadcasting assets”.
UTV Media’s share price was down by nearly 7% in Dublin yesterday afternoon.
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