UTV Ireland losses cause group's profits to plummet by 90pc
UTV Media saw its pre-tax profit plummet as its new TV station, UTV Ireland, posted an operating loss of £7.5m (€10.2m) in the first half of 2015.
After taxation the company reported a loss of £480,000 while it recorded a pre-tax profit of £980,000, down 90pc from last year's pre-tax profit of £9.96m.
Revenue in the company rose by under 1pc to £58.3m.
UTV Ireland brought in revenue of £4.9m which was minimised by its significant operating loss caused by costs of £12.4m. The company expects UTV Ireland to make an operating loss of £11.5m in the full year 2015. It updated this figure in June due to slow audience growth.
The company cited early teething problems such as the retuning of domestic digital receivers as contributing factors to the lower-than-expected turnover.
Despite the troubles of its Irish station, UTV kept its proposed dividend consistent at 1.82p.
Speaking about UTV Ireland, UTV Media chairman Richard Huntingford said that the Irish station had a significant effect on the company's accounts.
"The challenges of establishing a new television channel are evident in these results which reflect the significant losses incurred by UTV Ireland in its first six months on air," the UTV chairman said.
"Less evident, but not to be lost sight of, is the inherent value created by the establishment of a mainstream television channel in Europe's fastest growing economy, with long term licensing, programme supply and infrastructure in place," Mr Huntingford said.
"UTV Ireland's progress is closely linked to the performance of ITV network's programming, which is the mainstay of its output, and there are new series scheduled for the autumn which have been favourably commented upon," he added.
Mr Huntingford also said UTV is "implementing an action plan which includes stronger domestic programming, more effective marketing and a better defined branding strategy" to improve UTV Ireland's results.
There was no mention of the sale of UTV Ireland or its assets in the company's interim results, but earlier in the week UTV Media confirmed that it was in talks to sell its television assets which include UTV Ireland.
The group announced on Monday that "discussions are ongoing and may or may not result in such a transaction being agreed".
The company reported that its net debt grew to £46.9m.
UTV Radio Ireland, which comprises seven Irish radio stations, including Q102, FM104 and Galway Bay FM, reported a fall of 4pc in advertising.
The company said that currency headwinds contributed to the decline in radio advertising which fell by £1.5m to £8.8m.
Operating profit for the first half was £400,000 lower than compared to the same period last year, standing at £2.1m.
The company's Northern Ireland television business delivered revenue of £18.7m, down 2pc from the same period last year. The Northern Irish television division also reported an operating profit of £4.2m.
Radio GB reported a 9pc fall in operating profits to £5.6m with TalkSPORT losing 15pc in revenue compared to last year.
However, this was primarily due to a comparison with a World Cup year.