Channel 5 beats expectations on viewing figures

Losses at Channel 5, the terrestrial television channel launched at the end of March, are lower than analysts have been expecting while audience share and advertising revenues are higher.

Channel 5 recorded a loss of pounds 23m in its first three months on top of the pounds 215.5m of start-up costs which have already been written off by its four shareholders.

The figures were released yesterday along with half-year results from United News & Media, which owns a 29 per cent stake in Channel 5. Its share of the first three months' losses was pounds 6.7m.

The channel, whose launch was dogged by problems, now reaches 65 per cent of the country. Its audience share is 5 per cent in homes that can access it and 3 per cent nationwide.

Support from advertisers has been encouraging with annualised revenues running at pounds 85m. This is much higher than even the top end of City expectations and will reassure analysts who have expressed concerns that Channel 5 would prove a financial black hole. "We are slightly ahead of our expectations," said the company's chief executive, Lord Hollick.

On the basis of yesterday's figures, broker Henderson Crosthwaite has lowered its forecast of first-year losses from pounds 25m to pounds 20m.

Excluding Channel 5 losses, United News & Media recorded a 15 per cent increase in half-year profits to pounds 174m. Lord Hollick yesterday repeated his call for a fairer system on the way broadcasters were taxed.

He said licence fees paid to the Treasury by the ITV companies could be replaced by a tax on advertising and subscription revenues. This would extend the tax to include satellite broadcaster BSkyB. "Our view is that the tax should be levied fairly and evenly," he said. "There needs to be a fundamental review."

Lord Hollick's comments came as the Independent Television Commission is consulting on the issue. It has asked for industry reaction by 27 September. United News & Media, which was formed as a result of MAI's merger with United News last year, is making progress with operating margins which rose from 15.4 per cent to 18 per cent.

After a year of busy corporate activity, in which United made pounds 1.1bn worth of acquisitions and pounds 400m of disposals, Lord Hollick said the focus this year would switch to organic growth.

The review of HTV, for which United paid pounds 372m earlier this year, will be completed by the end of this month. Cost savings will be reinvested across the group. Business Services, the exhibitions and trade magazine division which now accounts for 45 per cent of group profits, saw improved performances from Miller Freeman, which now includes the Blenheim Exhibitions group. Profits in the division rose by 70 per cent to pounds 87m.

The consumer publishing arm, which includes the Express newspaper titles, increased underlying profits by 18 per cent to pounds 48m.

Lord Hollick said investment in the Express would continue. With pounds 10m invested so far since the MAI-United merger, a further pounds 10m will be spent on the paper "over the next year or two".

Lord Hollick said the move towards a seven-day operation had worked well but more funds would be invested in the Sunday title.

"We are going to give the Mail a real run for its money over the next five years," he said.

The falling cost of newsprint boosted the group's bottom line by pounds 10m but currency factors cost the group pounds 5m while the rest was offset by development activity.

The financial services division, which includes the money-broking operation, saw profits fall by 13 per cent to pounds 27.5m.

Group margins improved from 15 per cent to 18 per cent. Net debt stands at pounds 1bn. The interim dividend is 11p. The shares rose 27.5p to 746p.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...