UTV shares up 29% in Dublin despite advertising concerns

SHARES IN Belfast-based broadcaster UTV rose by 29 per cent in Dublin yesterday in spite of the company warning of sharp declines in TV and radio advertising sales both here and in British this year.

UTV said it expected its Irish radio revenues to be down by 15 per cent in the first three months of this year on a like-for-like basis – this excludes revenues from FM104 in Dublin which it acquired in 2008.

“However, a favourable exchange rate and the inclusion of FM104 will result in a 35 per cent increase in forecast revenue for the first three months,” UTV said.

UTV said its radio advertising revenue was forecast to decline by 15 per cent in the first quarter of 2009, with TV sales down 19 per cent.

The company said these declines would be “somewhat better than” the overall fall in TV and radio ad revenues in the UK for the three-month period.

UTV’s group turnover rose by 6 per cent to £120 million, but its operating profit was flat at £28.1 million.

Its radio operating profit rose by 12 per cent to £18.5 million, but TV was down 24 per cent to £7.7 million.

Its new media business boosted its operating profit by 44 per cent to £2 million.

UTV took an exceptional charge of £4.5 million relating to redundancy costs, a restructuring of its chain of radio stations in Britain and debt finance costs.

The broadcaster has reduced its headcount by about 100 to about 800 at present.

It said the cost-reduction programme would benefit its pre-tax profit by £5 million in the current year.

UTV’s Irish radio revenue rose by 50 per cent to £24.9 million. This was due to the effect of a stronger euro and the acquisition of FM104. On a like-for-like basis, the increase was just 1 per cent.

The Irish radio business comprises stations in Belfast, Dublin, Cork, Limerick and Louth.

Commenting on the results, UTV chief executive John McCann said he was “pleased” with the results given the difficult economic backdrop.

“It continues to be a very tough environment,” he told The Irish Times.

“But we’re in a good position to rise out whatever [economic] storm we’re in.”

He was also happy the company completed a £47.5 million rights issue last year before the credit crisis took hold which allowed it to pay down debt and refinance its borrowings out to 2013.

“That was vitally important for us and the timing proved to be good.”