UTV Media's (UTV) high fixed cost base means that when revenue falls, profits really take a hit. This was certainly true in the latest half-year trading period, as the absence of any major sporting events, coupled with wider market decline, sent operating profit in the radio division, which represents half of group earnings, tumbling from £9.7m to £4.5m.
UK radio faced tough comparisons as last year's European football championships buoyed advertising at TalkSPORT. The £3.4m fall in advertising revenue at the station largely accounted for the 14 per cent decline in the radio segment's revenue to £24.1m, while a weak market in Ireland meant turnover there slid 10 per cent to £9.8m. The second half is looking better, though, and should benefit from new syndication partners overseas and an agreement with the Premier League for TalkSPORT to offer exclusive live audio commentary of Barclays Premier League matches across Europe. The service now broadcasts in nine languages.
In television, advertising revenue fell in the first quarter as poor trading in Ireland offset good performance in London, while in the second quarter, the reverse was true, with the division ending the half year down 8 per cent at £15.3m, leaving profit down 21 per cent to £3.3m.
Peel Hunt has downgraded full-year pre-tax profits by 5 per cent to £19m, giving EPS of 14.8p (2012: £21m and 16.9p).
| UTV MEDIA (UTV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 168p | MARKET VALUE: | £161m | |
| TOUCH: | 165p-170p | 12-MONTH HIGH: | 174p | LOW: 110p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 96p* | NET DEBT: | 54% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 61.6 | 10.7 | 6.85 | 1.75 |
| 2013 | 55.2 | 6.05 | 3.44 | 1.75 |
| % change | -10 | -43 | -50 | - |
Ex-div: 11 Sep Payment: 15 Oct *Includes intangible assets of £180m, or 188p a share | ||||
