Rise in UTV revenue a boost for planned Irish TV channel
UTV's plans for a dedicated Irish TV channel got a small boost yesterday after third quarter revenues rose, reversing some of the declines seen earlier this year.
Group turnover improved by 1pc to £28.2m (€33.7m) during the quarter, according to an interim management statement, reducing total revenue losses over the first nine months of the year to 7pc.
Advertising revenues from the media company's Irish radio unit were up 5pc, even though its UK radio operation continued to decline.
Revenues from its flagship Northern Irish television station also improved, up 9pc. That channel is also broadcast in the Republic to Sky customers.
The group cited "improving market conditions" as the reason behind the third-quarter recovery.
"After the very difficult trading conditions of the first six months, it is good to be able to report that the group has moved into year on year revenue growth in the second of the year," said a statement.
"As we progress towards 2014, we are further encouraged by the prospect of a continuation of these improved market conditions together with the commercial opportunities arising from the FIFA World Cup."
The company added that the planned launch of a dedicated television station for the Republic of Ireland, announced last week, was "an exciting strategic step forward for the group".
The station, which has the exclusive rights to broadcast ITV content into Ireland from 2015, will seek to "replicate the success of our television statement in Northern Ireland and complement our already well-established radio and online activities," it said.
The trading update was broadly welcomed by analysts. "It highlights the more positive backdrop for the group across its radio and television businesses," said Dublin-based stockbroking company Goodbody.
Goodbody has yet adjusted its 2014 earnings forecast for UTV downward, to reflect the additional costs that the start-up of UTV Ireland will impose, but said it thinks this investment will pay off.
"We believe this short-term P&L investment is justified given the potential for it to become a meaningful contributor to group profits in the medium term," said company analyst Gavin Kelleher.