News that UTV (UTV) is in talks to sell its television assets stole the spotlight from these uninspiring first-half results. The media group's new TV channel, UTV Ireland, stomached a £7.5m operating loss as it battled to build an audience in its first six months on air. Coupled with a tepid advertising backdrop, that meant UTV's operating profit fell more than three-quarters to £2.7m.
The company's radio division posted double-digit declines in sales and operating profit. That reflected lukewarm demand from UK advertisers and its talkSPORT station's hangover following the high of the FIFA World Cup in 2014. Although the Irish economy improved, the nation's radio advertisers didn't open their wallets. Management has taken steps to cull its less lucrative local radio stations: it recently agreed to sell Juice FM in Liverpool for £10m.
Weaker marketing spend by government bodies in Northern Ireland meant the group's regional television advertising revenue slumped 11 per cent. Together with losses at UTV Ireland, that meant the TV business swung to a £3.3m operating loss. Management plans to drive growth by strengthening the channel's programming and marketing and refining its brand. It also expects a boost from the slew of new ITV shows premiering this autumn on its Irish network.
Broker Davy expects EPS of 6.7p, rising to 10p in 2016 (14.5p in 2014).
| UTV (UTV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 170p | MARKET VALUE: | £163m | |
| TOUCH: | 170-175p | 12-MONTH HIGH: | 222p | LOW: 137p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 98p* | NET DEBT: | 50% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 57.8 | 10.0 | 8.3 | 1.82 |
| 2015 | 58.3 | 1.0 | -0.6 | 1.82 |
| % change | +1 | -90 | - | - |
Ex-div: 10 Sep Payment: 15 Oct *Includes intangible assets of £166m, or 173p a share | ||||
