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
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
peopleMathematician John Nash inspired the film Beautiful Mind
News
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Life and Style
Audrey Hepburn with Hubert De Givenchy, whose well-cut black tuxedo is a 'timeless look'
fashionIt may be a paradox, but the industry loves it
Arts and Entertainment
The pair in their heyday in 1967
music
Life and Style
fashionFrom bathing dresses in the twenties to modern bikinis
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

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine