UTV Ireland expects to lose up to €3.7m in its first year
Published 27/08/2014 | 02:30
UTV expects its new TV station in Ireland to generate losses of between £2m and £3m (€2.5m and €3.7m) next year, but to move into profitability by the second half of 2015.
It revealed the forecast for UTV Ireland in its interim results yesterday.
The media group also said that it had so far incurred £500,000 (€628,000) of start-up costs related to the new channel, which will launch on January 1 from its Dublin base.
UTV's target is to make the new station the most watched channel in Ireland after RTE 1.
Its programme line-up includes soaps Coronation Street and Emmerdale, shows that have until now been part of the TV3 schedule.
UTV Ireland will also show a large amount of other ITV content, while home-produced programming will include a show to be hosted by broadcaster Pat Kenny.
UTV also owns a number of radio stations in Ireland, including FM104 and Q102 in Dublin and 96FM in Cork. It also owns Talksport in Britain.
It said that group revenue rose 13pc to £57.8m (€72.6m) in the first six months of the year, while operating profit was 41pc higher at £11.2m (€14m).
The results were ahead of analyst expectations.
Improving macroeconomic conditions in the UK and Ireland, coupled with sales generated around the World Cup, resulted in the significant boost to the first-half figures.
Group chief executive John McCann said the improving economic conditions "bode well" for the launch of UTV Ireland.
UTV generates the single biggest chunk of its revenue ‑ £28.5m (€35.8m) - from its radio stations in Britain. That figure was up 20pc year-on-year, while operating profit jumped to £6.1m from £2.4m a year earlier.
Total radio revenue, which includes stations in Ireland, rose 16pc to £38.8m (€48.7m), with operating profit nearly doubling to £8.6m (€10.8m).
UTV said its radio advertising revenue had improved in the first half and that improvement had continued in the third quarter. In euro terms, its radio ad revenue in Ireland was 8pc higher in the first six months of the year.
Operating profits at its Irish radio arm jumped 23pc to £2.5m (€3.1m).
TV revenue in UTV's core Northern Ireland market rose 8pc to £16.6m (€20.8m), while it generated an operating profit of £4.4m (€5.5m), up 30pc year-on-year. Total revenue at its TV division was £19m in the period.