Carlton finds winning formula
Thursday 07 December 1995
The turning point was winning the London weekday ITV franchise from Thames in 1993, which was quickly followed by the pounds 758m agreed takeover of Central, the Midlands broadcaster. Together these have created the network's leading supplier of programmes just at the time when television advertising is back in demand.
The result was to raise profits before exceptionals by 39 per cent to pounds 254m in the year to September, before a pounds 7m loss on the sale of two small businesses in the period. Shareholders share in the spoils, with a dividend raised 14 per cent to 23.6p, after a final of 14.3p.
Carlton had some residual dowry effect from the acquisition of Central part-way through 1994, which flattered the latest figures, but underlying profits are still up 30 per cent. The timing of the Central deal looks excellent. Carlton has had the best year for advertising for many years, raising revenues 9 per cent during the past 12 months, against an ITV market up 7 per cent. The company has cashed in on the recovery and has also won market share from its arch-rival London Weekend Television in the capital's ferociously competitive advertising market. The combination of both franchises' advertising arms in Carlton UK Sales, now commanding 32 per cent of ITV advertising revenue, has obviously been a winning formula.
Profits from the core television operation soared from pounds 71.6m to pounds 123m, a momentum that will clearly be difficult to sustain. Some media buyers are looking forward to continued growth in advertising revenues of around 6 or 7 per cent, but City analysts are more cautious, with James Capel expecting something nearer 5 per cent.
Carlton has a firm base in the UK, making 27 per cent of ITV programmes by value and having already been recommissioned for seven of this year's top 10 drama productions. The idea is to build on that foundation, moving into new areas like cable and satellite at home and new regions, such as recent deals in France and Singapore. So far the picture is mixed. Continued losses at Carlton Home Entertainment and a squeeze on margins hit the videocassette operation, cutting profits by 9 per cent to pounds 60.7m. Further growth may be limited by new technologies.
Capel's forecast of pounds 292m group profits this year would put the shares, up 3p at pounds 10.03, on a forward multiple of 14. Reasonable value.
- 1 School kitchen manager 'fired from Colorado school for giving hungry students free lunches'
- 2 California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
- 5 Charles Kennedy 'had better judgement drunk than many sober politicians' says Ian Hislop
California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
Amber Peat: Body found in search for missing 13-year-old who ran away after argument with her parents
Alton Towers crash: Four guests seriously injured as Smiler ride carriages collide
Charles Kennedy dead: A guy once asked the Lib Dem leader who his favourite Muppet was and his letter response was wonderful
Gay teenager 'forced to have sex with his own mother' to 'cure' his homosexuality, campaigners in India say
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Church of England 'one generation away from extinction' after dramatic loss of followers
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...