Carlton profits fall as digital costs bite

CARLTON Communications, the ITV broadcaster and owner of the Technicolor film and video business, provided further evidence yesterday of the cost of playing a lead role in Britain's nascent digital television broadcast market.

A 50 per cent partner in ONdigital with fellow ITV broadcaster Granada, Carlton reported a near one-third fall in six months to March pretax profit to pounds 110.2m. That encapsulated a loss of pounds 49.6m for investment in digital television.

But spending on digital media, spread across the group's broadcasting, film and video processing, and equipment manufacturing operations, is planned to surpass pounds 150m this year. The biggest recipient will be ONdigital, which will gobble up additional investment of pounds 200m between now and September 2000. The bulk of that comes from ONdigital's plan to begin giving away digital set-top boxes from tomorrow. It matches a rival free offer from BSkyB that comes into effect on Saturday.

Steven Cain, 34, the new chief executive, unveiled a reorganisation that will consolidate TV, production, distribution and Internet businesses into a unit to be called Carlton Media Group. He also introduced a plan to push up performance at the Media and the Technicolor businesses - the source of over 90 per cent of group earnings.

Key to the three-year plan, Mr Cain said, is building Carlton's brand across its entertainment operations, boosting its 17 per cent share of ITV commissioned programming and expanding the UK cinema advertising business to the US. "What we're trying to do is become more like brand managers," Mr Cain said. Carlton's share price closed down 21.5p, or 3.8 per cent, at 531 pence after an early advance as analysts said the plan lacked hard detail. They also noted that chairman Michael Green remains firmly in charge, thus making any major change in strategy unlikely. "It's the same organ grinder - you just have a different monkey, quite frankly," observed one analyst.

Healthy advertising revenue gains in the Central, West Country and London ITV franchises, buoyed by audiences of 19 million viewers for the hit quiz show Who Wants to be a Millionaire?, boosted operating profit by 15 per cent to pounds 87.8m. Video duplication operating profit rose 32 per cent to pounds 52.9m, film processing dipped fractionally to pounds 30.6m, while equipment makers Quantel and SSL fell by almost two-thirds to pounds 5.1m.

Outlook, above

Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Recruitment Genius: Experienced Financial Advisers and Paraplanners

Negotiable: Recruitment Genius: This extremely successful and well-established...

Guru Careers: FX Trader / Risk Manager

Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

Day In a Page

Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map
Lionel, Patti, Burt and The Who rock Glasto

Lionel, Patti, Burt and The Who rock Glasto

This was the year of 24-carat Golden Oldies
Paris Fashion Week

Paris Fashion Week

Thom Browne's scarecrows offer a rare beacon in commercial offerings
A year of the caliphate:

Isis, a year of the caliphate

Who can defeat the so-called 'Islamic State' – and how?
Marks and Spencer: Can a new team of designers put the spark back into the high-street brand?

Marks and Spencer

Can a new team of designers put the spark back into the high-street brand?
'We haven't invaded France': Italy's Prime Minister 'reclaims' Europe's highest peak

'We haven't invaded France'

Italy's Prime Minister 'reclaims' Europe's highest peak
Isis in Kobani: Why we ignore the worst of the massacres

Why do we ignore the worst of the massacres?

The West’s determination not to offend its Sunni allies helps Isis and puts us all at risk, says Patrick Cockburn
7/7 bombings 10 years on: Four emergency workers who saved lives recall the shocking day that 52 people were killed

Remembering 7/7 ten years on

Four emergency workers recall their memories of that day – and reveal how it's affected them ever since
Humans: Are the scientists developing robots in danger of replicating the hit Channel 4 drama?

They’re here to help

We want robots to do our drudge work, and to look enough like us for comfort. But are the scientists developing artificial intelligence in danger of replicating the TV drama Humans?