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UTV pays 5.3% to wait for upturn

RESULTS: With more economic headwinds likely in 2013, resilient UTV remains first and foremost an income play, but there could be significant cyclical upside further down the line
March 19, 2013

While operating profits fell 11 per cent in 2012, overall, TV and sports radio group UTV Media (UTV) managed a reasonable performance. But, as 2013 has got under way, the group has continued to face trading headwinds due to a weak Irish advertising market and a dearth of major sporting events - which will weigh on its talkSPORT radio division that enjoyed a Euro football cup boost in early 2012.

IC TIP: Buy at 150p

That said, the group looks in a good position to cope with lean times. Net debt has been brought down below twice the cash profits and a five-year refinancing deal was secured last year. The company has also signed a new affiliate agreement with ITV and the renewal process for its Channel 3 licence to 2024 has been agreed. Meanwhile, its TV and radio stations continue to perform well and its online business should be boosted by the acquisition of Simply Zesty.

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