NORTHERN IRELAND media group UTV saw a 6 per cent increase in revenue in the 10 months to October of this year but a corresponding slump in television revenue over the same period.
According to a trading statement issued by the Belfast-based group yesterday, UTV has been hit hard over recent months by the industry-wide decline in radio and television advertising budgets in the UK. Its Irish radio division has emerged as its star performer this year, delivering growth of 50 per cent in the 10 months.
UTV said sterling translation gains accounted for 15 per cent of this growth while acquisitions delivered 32 per cent. Like for like growth was 3 per cent.
Accounts filed recently by UTV Radio (RoI) Ltd, a holding company for its commercial radio stations in Ireland, show the Belfast group made a €26.5 million adjustment as part of a reorganisation of its subsidiary accounts.
The group said this was to facilitate the restructuring of its Irish operations and was not a write-off of its Irish radio assets.
The Northern Ireland group currently operates the ITV franchise in the North and owns 24 radio stations throughout the UK and Ireland. It also has a new media division. UTV said revenue from its British radio operations remained flat.
The division has been struggling to shake off what UTV has described as the "underperformance" of its newest addition - the Scottish radio station Talk107. The group yesterday confirmed this station has been put on sale.
The Belfast media organisation had planned to launch another new talk radio station on Channel 4's proposed 4Digital platform in the UK. Channel 4 has abandoned plans to launch the platform, drawing sharp criticism from UTV.
The Northern Ireland group said overall like-for-like revenue and operating costs in the 10 months to October were broadly in line with last year.
Its new media division delivered 15 per cent revenue growth and annual revenue is forecast to be 15 per cent up on last year.
But the outlook for its other operations is not so promising for November and December. Revenue from its UK radio operations is forecast to be in line with last year's performance while revenue from its Irish operations is expected to be broadly flat.
The prospects for UTV's television operations are expected to be even worse. Advertising revenue is forecast to fall by 10 per cent - despite the traditionally lucrative Christmas period.
Last July, UTV raised £49.9 million in a new rights issue and it outlined in the trading statement how the finance has been used to reduce its overall debt and gearing. UTV now has a revised banking facility in place, comprising five-year £95 million and €50 million debt facilities.
The group has warned that, because of the continuing turmoil in global and national economies, it is difficult for it to predict revenue forecasts for the rest of the year.
Looking ahead, UTV said: "Each of our operating divisions continues to perform well relative to their peer groups and the positive effects of a significant cost- reduction programme across the group should start to be evident in the early part of 2009."
One element of this is a major redundancy programme currently under way at UTV's television division in the North.
