Franchise costs force HTV to slash budget

HTV GROUP, the Independent Television broadcaster in Wales and the West of England, yesterday became the first successful bidder for an ITV franchise to run into problems because of the large size of its bid.

The group yesterday announced a draconian cost-cutting package - including a wage freeze, the cancellation of bonus payments and substantial job cuts - designed to shave pounds 10m a year from HTV's overheads. HTV's staffing levels have already been halved to 460.

The measures, which Louis Sherwood, HTV's chairman, said were essential to secure the future of the company, have already prompted the departure of one HTV director, Emyr Daniel, the head of HTV Wales, who objected to a merger of the group's two programming sides.

The cost-cutting was revealed as the group announced a loss of pounds 5m in the six months to 30 June and cancelled its interim dividend. HTV's shares fell a third to 27p on the news, valuing the company at just pounds 18.6m. The group's debts currently stand at pounds 25.7m.

By contrast Central Independent TV, which won back its franchise with a bid of just pounds 2,000 a year, announced a 344 per cent increase in pre-tax profits to pounds 15.1m in the same period. Central's earnings per share rose similarly to 34.7p and the interim dividend is 10p, up a third. Its shares rose 70p to 1445p.

HTV's loss came despite a cut in the exchequer levy, the amount ITV companies pay to the Government to be allowed to broadcast, from pounds 3m in the first half of last year to just pounds 500,000.

HTV bid pounds 20.5m a year to retain its franchise, which means that, even allowing for beneficial factors like the change in the way Channel 4 is funded, HTV's losses under the regime to be introduced next year would, on a like-for-like basis, have exceeded pounds 10m.

Charles Romaine, HTV's chief executive, said that the group had suffered a drop in the share of network advertising revenue (NAR) from 6.2 per cent to 5.8 per cent in the half-year. 'Our share has eroded more than we expected but we believe we have stabilised at this level,' he said.

HTV had suffered because a survey indicated that the impact of programmes broadcast by HTV had fallen by nearly a quarter. This meant that HTV was losing out as advertisers congregated towards the more successful regions, a trend shown by Central's NAR, which increased from 14 per cent to 14.8 per cent.

HTV's problems have led to speculation that its days as an independent company may be numbered. Under the Broadcasting Act HTV is designated as a large company and the Act prevents any of the other eight large companies taking it over.

However Central is among the ITV companies lobbying for a change in the Act. Leslie Hill, Central's chairman, said the group would be interested in deals that would enable Central to grow as a broadcaster in the UK.

(Photographs omitted)

Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
ebooksAn unforgettable anthology of contemporary reportage
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments