UTV enjoys surge in advertising, prompting talk of 'turning point'
Analysts hailed a "turning point" for Ireland's advertising market after UTV's 2013 results showed its Irish TV and radio businesses both swung into growth mode in the second half of the year.
Revenues from Irish television and radio advertising both rose by around 10pc between July and December, the results showed, wiping out declines recorded earlier in the year. This was the first sustained period of growth for its Irish TV business in five years.
Though both divisions still recorded an annual overall contraction, analysts said the recovery in the second half was encouraging and advertisers should take confidence that spending is improving.
"Strong growth coming from the Irish operations points to a corner having been turned in this market," said Davy Stock-brokers' Simon McGrotty.
Growth in both divisions is expected to continue in 2014, the broadcaster said, forecasting an 11pc rise in sales for Irish television advertising in the first quarter of this year and a 9pc growth in radio advertising revenues.
Gains in the TV division are particularly significant, Goodbody Stockbrokers' Rachel Cairns told the Irish Independent, because they tend to be the first indicator of a recovery for the advertising sector as a whole.
The results bode well for the launch of UTV's new Republic of Ireland TV channel, due in January 2015, for which it recently secured a 10-year broadcasting licence.
This channel will be heavily centred around ITV shows like 'Coronation Street', which has been poached from competitor TV3.
"Much of the programming which we will be offering will already be familiar to Irish viewers and we are confident we will be able to establish a strong viewership base in our first full year of operat-ion," the company said.
Group revenue was down 4pc overall to £107.8m (€77.5m), in line with forecasts, while operating profit was £19.9m.
The group as a whole saw the same second-half recovery that its Irish business experienced, with revenue up 3pc between July and December.
It expects its British radio division – its largest operation – to grow by another 7pc in the first quarter of this year in the run up to the World Cup.
A new strategy was also outlined in the results, with the aim of refocusing UTV on its core broadcasting activities.
Shares in UTV were unchanged as of 12.15pm yesterday, trading at €2.85 on the Irish Stock Exchange.
Holding company TVC, which has a large stake in UTV, was up by 1pc to 92c.