UTV’s profits fell dramatically during the first half of this year as a result of losses incurred by its new Irish station.
The company recorded pre-tax profits of £1 million for the first six months of the year, a fall from £10 million for the same period in 2014.
UTV, which has been broadcasting in Northern Ireland since 1959, set up UTV Ireland at the start of this year, making it a market competitor in the south of the country. The new station made a £7.5 million loss.
The group’s revenues were up marginally year on year — £58.3 million in 2015 compared to £57.8 million — while operating costs were up £9 million.
“The challenges of establishing a new television channel are evident in these results which reflect the significant losses incurred by UTV Ireland in its first six months on air,” Richard Huntingford, chairman of UTV Media, said.
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“Less evident, but not to be lost sight of, is the inherent value created by the establishment of a mainstream television channel in Europe’s fastest growing economy, with longterm licensing, programme supply and infrastructure in place.”
The media group, which is listed in London and Dublin, confirmed that it was in ongoing talks with ITV about a potential sale of its television assets. It is believed that a sale is likely to include UTV Ireland, but this was not confirmed by UTV.
Audience growth for UTV Ireland was slower than expected, leading to decreased turnover. The company said early teething issues, such as the retuning of domestic digital receivers, further compounded low audience figures.
UTV Ireland had a turnover of £4.9 million with costs of £12.4 million. UTV said the Irish station’s progress is “closely linked to the performance of ITV network’s programming”, which is the mainstay of its output, and there are new series scheduled for the autumn which have been “favourably commented upon”.
“Alongside this, we are implementing an action plan which includes stronger domestic programming, more effective marketing and a better defined branding strategy,” the company said in its results.
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Despite the fall in profits, shares in the company were up by more than 2 per cent, to £1.725. It has proposed an interim dividend of £0.0182p. Analysts remained positive about the company’s prospects.
“UTV Ireland remains the key drag on profits, but we remain convinced that over time this station can reach the required audience and generate an attractive return,” Gavin Kelleher, an analyst at Goodbody, said. “We continue to like the UTV investment case.”