Television Corp seeks acquisitions

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The Independent Online
TELEVISION Corporation, the TV production and programme supplier, is prepared to spend up to pounds 50m on acquisitions as it attempts to exploit the explosion of digital TV channels.

Chris Rowlands, the chief executive, said he had considered about 60 companies in the past year, including independent production houses and suppliers of television facilities. "We are looking to generate more content," he said. "There are opportunities for rights-related acquisitions at the moment."

Mr Rowlands said the company would consider taking stakes in production companies in order to tie up the distribution rights to their programmes, which are often under-exploited. However, he added that the prices put on many production houses were currently too high. Earlier this month Planet 24, the Big Breakfast producer, was bought by Carlton for pounds 15m.

Mr Rowlands's comments came as Television Corporation reported a slight rise in profits for the year to December. Before exceptionals, pre-tax profits rose to pounds 4.2m from pounds 4.1m. However, the rise masked contrasting performances by its two divisions.

Sunset+Vine, the production and programming side, lifted operating profits by 27 per cent to pounds 2.2m with the help of its long-term agreement to supply sports programmes sponsored by Gillette. Sunset+Vine's prospects look healthy after it won contracts to provide Channel 4 with international cricket coverage and Toyota with sponsored wildlife programmes.

On the facilities side, operating profit dipped to pounds 3.4m from pounds 3.8m as several long-term transmission contracts expired. However, the opportunities provided by new TV channels mean demand is likely to carry on growing.

"They are quite well positioned at a time when there are a lot of changes going on with television," said Guy Bell, media analyst at Beeson Gregory. He forecasts profits of pounds 4.9m in the current year, rising to pounds 5.9m in 2000. However, on a forward multiple of 18 times next year's earnings, he reckons the shares - flat at 290p - are fully valued.