The venture, TFC (UK), will begin broadcasting wholesome entertainment from 1 September using the Astra satellite in the evenings. Roger Luard, chief executive of Flextech, said he expected it to be 'nice and profitable within 18 months'.
Shares in Flextech rose 3p to 98p as it announced it had also agreed a deal with BSkyB to have its Children's Channel included as one of the encrypted channels to be launched as a paid-for package this autumn.
In a third deal, Flextech announced a joint venture with Quantum International, part of the US-based National Media Corporation, to broadcast home shopping advertisements known as 'informercials'.
Flextech, which transmogrified from an oil services company into a television company last year, reported a pre-tax loss of pounds 1.57m for the period from 18 February to 31 December. It is paying a 1 2 p dividend out of reserves. It has about pounds 5m in cash.
The Children's Channel lifted revenues by 37 per cent in the final quarter. By tying up with BSkyB, it can expect to receive about 15-20p per subscriber per month. A joint venture with the Hong Kong-based Star TV, which is also in separate talks with Pearson Group, is being discussed.
The Flextech board, chaired by Stanislav Yassukovich, the former chairman of the Securities Association, is understood to have agreed to issue Mr Luard with an additional 600,000 share options.
Although it is expected to be loss-making for another 12 months, the USM-quoted Flextech appeals to some investors as the only pure play in the growing satellite and cable television industry. Most companies in the sector are unquoted, foreign or part of larger non-television groups.
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