Scottish Media unlikely to seek early renewal of licences

Scottish Media, owner of the Scottish and Grampian independent television franchises, said yesterday it was unlikely the group would seek early renewal for its two licences as there would be no economic benefit.

Andrew Flanagan, managing director, said: "We think we are unlikely to go forward early unless there are good economic reasons for doing so and at the moment there is no evidence of that yet."

In July, the ITC released a consultation paper on early licence renewal whereby the ITV companies have the right to renegotiate new terms for their licences to apply from January 1999.

However, analysts forecast SMG could lose out by up to pounds 8m per year when the licence terms are reassessed, which must be done at the latest before the current 10-year licences run their course by 2002.

The Scottish TV licence has one of the lowest fixed annual payments among all the ITV companies, paying an index-linked pounds 2,000 each year while Grampian pays an index-linked pounds 799,000 per annum.

Mr Flanagan's comments followed the release of the company's results for the first six months of the year to June which showed that pre-tax profits climbed from pounds 10.3m to pounds 18.5m, in line with analysts' forecasts.

He said the ITV network had suffered from lower advertising spend in the second quarter of the year due to competition from Channel 5 and a tough comparison period with last year when coverage of the Euro '96 tournament boosted spending by advertisers.

However, Mr Flanagan said the Channel 5 effect represented a "pause for breath" in ITV advertising spend rather than a long-term trend.

Advertising revenue growth is expected to pick up in the third quarter though the increase will be fairly small, he added.

At the group's newspaper division, advertising revenue growth had been virtually flat year-on-year as volume growth was affected by the group's efforts to improve yield.

"We have increased yield from press advertising by 14 per cent and now we are beginning to see volumes pick up even at the enhanced prices," said the finance director, Gary Hughes.

The ability, since the recent acquisition of Caledonian, to offer joint press and television advertising packages had boosted the advertising performance in the period, Mr Flanagan said.

"We've had a lot of success with that [selling combined packages] mostly with press advertisers being introduced into the television area," he said.

He added that the group was on target to realise the pounds 3m of cost savings from the integration of Caledonian that were flagged at the time of the takeover in October 1996.

At the half year stage, pounds 2m of savings had been realised, which was ahead of target for pounds 1.5m in the first year from acquisition. A further 30 staff cuts would be made in the second half of the year, taking the total head count reduction to 80, around 10 per cent, since takeover.

The integration of Grampian, which was bought for pounds 105m last month, has only just commenced, but Mr Flanagan said that having looked at the opportunities he was "comfortable" with analysts' forecasts for pounds 2m of cost savings over two years.

Start your day with The Independent, sign up for daily news emails
Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm tomorrow
Arts and Entertainment
Mark Wright and Bianca Miller in the final of The Apprentice
tvMark Wright and Bianca Miller fight for Lord Sugar's investment
Arts and Entertainment
X Factor winner Ben Haenow has scored his first Christmas number one
music
News
news
PROMOTED VIDEO
Arts and Entertainment
James May, Jeremy Clarkson and Richard Hammond in the Top Gear Patagonia Special
tv
News
File: James Woods attends the 52nd New York Film Festival at Walter Reade Theater on September 27, 2014
peopleActor was tweeting in wake of NYPD police shooting
News
Claudia Winkleman and co-host Tess Daly at the Strictly Come Dancing final
people
News
i100
Extras
indybest
News
peopleLiam Williams posted photo of himself dressed as Wilfried Bony
Sport
Martin Skrtel heads in the dramatic equaliser
SPORTLiverpool vs Arsenal match report: Bandaged Martin Skrtel heads home in the 97th-minute
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
The Apprentice finalists Mark Wright and Bianca Miller
tvBut who should win The Apprentice?
News
The monkey made several attempts to revive his friend before he regained consciousness
video
Extras
indybest
News
Elton John and David Furnish will marry on 21 December 2014
peopleSinger posts pictures of nuptials throughout the day
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
life
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

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

Marian Keyes

The author on her pre-approved Christmas, true love's parking implications and living in the moment
Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

Bill Granger's Christmas Eve fish feast

Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

Rodgers fights for his reputation

Liverpool manager tries to stay on his feet despite waves of criticism
Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

Michael Calvin's Last Word

Sepp Blatter is my man of the year in sport. Bring on 2015, quick