Dyke sights on pounds 5m of cost savings at GMTV: London Weekend reports 62% advance to pounds 30m

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The Independent Online
GREG DYKE, chairman of the struggling breakfast television station GMTV, said yesterday he planned to prune another pounds 5m from its annual costs and predicted it would move into profit next year.

Mr Dyke, who helped to rescue TV-am from the brink of collapse nine years ago, said: 'I'm fairly optimistic that GMTV will be a profitable business in 1994.'

He also hinted that suppliers would be looked at in a fresh cost-cutting exercise. 'I would be disappointed if we couldn't find pounds 5m of costs without damaging the show.'.

Mr Dyke, chief executive of London Weekend Television, was appointed chairman of GMTV in February, after its poor start when it replaced TV-am on 1 January.

He sacked Lis Howell, the director of programmes, within three days, and has since introduced programme and scheduling changes in an attempt to recapture viewers lost to Channel Four's successful Big Breakfast.

He said yesterday the average audience had increased by 30 per cent to 1.29 million in the six weeks since he arrived. Advertising revenues had risen in line.

GMTV is jointly owned by Carlton Communications, LWT with 20 per cent, Scottish TV, Walt Disney and the Guardian and Manchester Evening News.

LWT (Holdings) yesterday reported a 62 per cent increase in pre-tax profits to pounds 30.6m in the year ended 31 December, boosted by a drop in the Exchequer levy and heavy reorganisation costs in the previous year. The operating profit before levy, a better measure of performance, rose 7 per cent to pounds 50.7m.

Advertising revenue increased by 4 per cent. LWT maintained its share of ITV revenues but lost market share in London to Thames, Carlton's predecessor. Its advertising revenue 'grew significantly' in the first quarter of the new year.

LWT has written off pounds 2.9m - its share of the start-up costs of GMTV and London News Network, its news, sport and transmission joint venture with Carlton, which has London's weekday television franchise.

As an 18 per cent shareholder in ITN, it is to provide loan guarantees of pounds 6.45m if the option to acquire ITN's Gray's Inn Road headquarters is exercised. The option was signed this week. LWT has also contributed its share of the pounds 1.9m equity and agreed to subscribe for its share of the pounds 15m of convertible loan notes.

The managers, who were awarded preferred and management shares as part of a controversial 'golden handcuffs' package in 1989, stand to control up to 15 per cent of the company if they convert their holdings into ordinary shares this September.

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