UTV shares hit five-year-high
South African investor Old Mutual and Standard Life have been actively trading in UTV stocks as shares in the Belfast-based broadcaster hit five year highs.
Shares in Irish and UK listed UTV Media were up 1.5pc in London yesterday after its third biggest shareholder Old Mutual said in a regulatory announcement that it's stake in the firm is now 6.26pc.
Buyers of shares in listed companies only have to make a public declaration if their stake exceeds set levels as a result of the trades.
Yesterday, Standard Life said it had raised its stake in the company to 4.418pc following stock buying on September 5.
Shares in UTV have risen 28pc since the start of August to €2.25 a share from €1.75, the bulk of that gain coming after the announcement of interim results on August 28.
The flurry of recent trading means shares have now reached levels not seen since 2008.
The stock hit 52-week highs nine times over the past month despite the company reporting a 43pc decline in pre-tax profits in interim financial results published on August 28.
The interim report said pre-tax profits fell to £6.1m (e7.2m) in the six months to the end of June from £10.7m (e12.7m) in the first half of 2012.
The flurry of activity is likely to spark speculation that UTV Media could be in play as a potential takeover target.
However, a spokeswoman for the company said the share activity "looks like normal market activity as far as we're aware".
The rising stock could be an indication that a predatory bidder is buying a stake in the business, according to equities analyst David O'Brien of Shore Capital in London.
However, he said the increase is more likely to be a reaction to UTV's more positive outlook for the rest of the year announced alongside the interim results at the end of August.
"UTV's most recent trading statement indicated that advertising is improving for all businesses, the market has been waiting for that," he said.
Patrick Yau, an analyst at Peel Hunt, said the improving UK market was feeding through into stocks including UTV that would benefit from what was now expected to be a pick-up in advertising spending, driven by consumer spending in 2014.
In its August results statement UTV reported a "clear sign of return to revenue growth" across its business.
The company has the independent television licence for Northern Ireland – which is also available across the Republic. It also owns 23 radio stations in the UK and Ireland and internet business Zesty.