Carlton may go to DTN

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The Independent Online
Carlton yesterday gave a strong hint that it was prepared to switch camps to ensure that it had a significant role in digital broadcasting should the British Digital Broadcasting consortium it is backing fail to win a licence next month.

The company indicated that if its consortium lost the battle for a digital terrestrial TV licence then it would consider offering programming to the rival bidder, Digital Television Network. Carlton said that not only would it be involved in digital through ITV, but also "as a major producer and distributor of television programmes and films".

City analysts said yesterday they had anticipated Carlton's alternative plans, expecting the company to exploit its programming and production expertise. One analyst said: "If Carlton aren't successful with BDB, you'd expect them to go round the back door and negotiate with DTN."

Robert Jolliffe, media analyst at ABN Amro Hoare Govett, said the digital television environment was "generally incredibly good news for Carlton".

He said: "Digital television will mean that there are more buyers of the kind of programming that Carlton produces - high-quality UK drama."

Carlton's shares jumped 18.5p to 517.5p after it announced pre-tax profits up 11 per cent to pounds 158.6m for the six months to the end of March. The results were roughly in line with expectation, but some analysts were reserving judgement on the full year until the results of the digital licence awards were known.

Carlton's television advertising revenues rose 11 per cent in the half- year. However, some analysts predicted that growth may not be so strong for the full year as the election had a negative impact on advertising revenues.

Three of Carlton's four divisions continued to grow, but the video operation reported a 12 per cent drop in turnover, in part due to the strength of sterling.