Channel 5 beats expectations on viewing figures
Thursday 11 September 1997
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.
- 1 What happens to your body when you give up sugar?
- 2 Drugs Live cannabis trial: Hash is less harmful than any other drug, expert claims
- 3 Turkish Airlines flight TK 726 crash-lands on Nepal runway amid dense fog
- 4 Penis size: Study revealing 'what's normal' sends international media into meltdown
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
Turkish Airlines flight TK 726 crash-lands on Nepal runway amid dense fog
Ayesha Ali death: Mother and her girlfriend found guilty of manslaughter of eight-year-old
George Clooney and Amal fail to get special treatment at New York restaurant
Cindy Crawford 'un-PhotoShopped' viral Marie Claire image was doctored, claims photographer
'A girl is more responsible for rape than a boy': The statement that shocked the world... except India
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
iJobs Money & Business
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...
£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...