UTV's pretax trading profits rise to £23.3m

A STRONG performance from its TalkSport radio station in the UK helped UTV to post record pretax trading profits of £23.3 million in 2011. This represented a rise of 10 per cent on the previous year.

However, an exceptional non-cash charge of £45 million pushed the group into the red.

The Belfast-based listed broadcaster booked an impairment charge of £45 million last year relating to the intangible assets of its Irish radio division.

This in part related to concerns over Ireland’s sovereign debt position and left it with a pretax loss for the year of £21.3 million.

While its TV division and British radio unit both increased revenues and profits, UTV’s Irish radio division reported a decline on both metrics.

Irish radio revenues fell by 4 per cent to €23.7 million, while its operating profit was 8 per cent lower at £6.4 million.

“This result has significantly outperformed the market,” the company said.

This trend has continued into 2012, with UTV stating that its ad revenue in the Irish market would be down 4 per cent for the first months of the year.

Its British radio revenues are expected to be up 8 per cent in this period while TV will be down by 5 per cent.

UTV’s Irish radio division includes its stations in the Republic along with its Belfast licence.

UTV’s radio division in Britain posted a 6 per cent rise in operating profit to £12.4 million last year. This was driven by a strong performance from TalkSport.

Chief executive John McCann said TalkSport’s operating profit rose by £1 million to £7.4 million in the year while its revenues increased by 10 per cent.

“In the first four months [of 2012] TalkSport is up 16 per cent and that’s before we get to the Euros [Euro 2012], which will be very positive for the station,” he added.

In TV, UTV reported an 18 per cent rise in operating profit to £6.5 million last year. TV accounts for roughly one-quarter of the company’s profits.

UTV said the increase in TV profitability in 2011 was down to reduced operating costs and a continued recovery in the national advertising market.

Mr McCann said TV would be “okay” this year, given that Euro 2012 and the Olympics will be held later in the year and should result in good viewership and stronger advertising demand.

Profits from its new media division declined to £1.5 million last year from £1.9 million in 2010.

The broadcaster said the performance of its new media division in the first four months was in line with last year.

There was good news for shareholders with the dividend for the year set to rise by 50 per cent to 6 pence a share, payable on July 16th. This was ahead of analyst expectations and means its dividend has trebled since 2009.

UTV continued to reduce its net debt last year, reducing it by 23 per cent or £16.8 million to £54.7 million.