UTV Media says Irish radio advertising market still difficult

Tuesday 27 August 2013 19.15
UTV Media reports lower half year revenues and pre-tax profits
UTV Media reports lower half year revenues and pre-tax profits

Broadcaster UTV Media's half yearly revenue fell by 10% as advertising revenue at its radio businesses in both Ireland and the UK continued to decline.

However, the company said today that trading challenges of the first half have eased in the second half of the year.

"The prospect of additional international partnerships and the build-up of interest in the FIFA World Cup, starting with the draw at the end of this year, should provide further revenue opportunities," chairman Richard Huntingford said in today's results statement.

The company reported pre-tax profits of £6.1m sterling for the six months to the end of June, down from a figure of £10.7m the same time last year.

Revenues fell to £55.2m from £61.6m, while the company has maintained its interim dividend at 1.75 pence per share.

UTV owns a number of radio stations in Ireland including FM104, Q102 and LMFM. It said that the Irish radio advertising market continued to be difficult during the six month period.

Revenues in the division fell by 12% in local currency and by 10% in sterling to £9.8m from £10.8m the same time last year. Costs were held at last year's level while operating profits in the division fell to £2.1m from £3.1m in the first six months of 2012.

Turnover at its UK radio business, which owns the popular sports radio station talkSPORT, was down 14% at £24.1m. Its UK radio division's operating profits fell to £2.5m from £6.7m the same time last year.

Television advertising revenue in the first half was down 8%, but the company said ad revenue was growing strongly in both Britain and Ireland and was expected to rise 11% in the third quarter.

In the first quarter, it noted poor trading conditions in Ireland, which offset a good performance in revenue from its London market. But that position was reversed in the second quarter with a soft market in the UK detracting from a stronger performance in Ireland.

Overall, television advertising in the first half of the year was down by 8% with total television revenue coming in at £15.3m, down from £16.9m the same time last year. Operating profits in the division fell to £3.3m from £4.2m.

UTV's new media division reported a 19% increase in revenues for the six month period to £1.4m, while operating profits rose to £0.9m from £0.6m.

Looking ahead, UTV said that it is encouraged that industry commentators continue to be positive about the remainder of 2013. ''It does appear that the last months of the year will make up much of the lost ground of the early months,'' it added.

It said that while Irish radio revenue slipped further in August, it is forecast to move into ''healthy'' growth in September, and after adjusting for currency translation, is expected to be up by 5% in the third quarter. TV advertising revenue is also growing strongly in both the UK and Ireland and is set to rise by 11% in the third quarter, the company said.

But chairman Richard Huntingford cautioned that the volatility in UTV's advertising revenue over the past 18 months confirms that the road to recovery is not necessarily a smooth one. ''We will continue, therefore, to be prudent in managing the affairs of the group,'' he added.