Five value halves as profits fall

Channel Five suffered heavily during the recession as annual losses rose and its parent company wrote off more than half the value of the commercial broadcaster.

Five, whose programmes include CSI and Neighbours, swung to an operating loss of €10m (£9m) in 2009 from earnings before charges of €2m the previous year. This came as the worst advertising recession on record drove Five's revenues down almost 30 per cent from €432m in 2008 to €303m.

Its parent company RTL said its UK operation had also taken an impairment loss of €140m, reflecting "the worsening of both the advertising market and Five's share of the market". The value of Five and its digital channels Five US and Fiver is now around €112m. The previous year it had been forced to write down Five's value by €337m.

The latest fall in valuation did not include a €22m write-down, as some of the imported US shows failed to live up to their billing, or a €9m restructuring charge. These came after the group, headed by Dawn Airey, was forced to draw up a comprehensive restructuring plan to combat the group's decline.

Earnings before charges at the flagship channel slumped 75 per cent from €16m to €4m, while the group's digital channels Five USA and Fiver lost €14m for the second year in a row. Five's share of the ad market fell from 9.6 per cent to 8.4 per cent. Gerhard Zeiler, the chief executive of RTL, said the group was committed to keeping the channels and added that the advertising market was "significantly up" in the first two months of the year against weak comparatives.

RTL also owns Fremantle Media, the production company that owns the Britain's Got Talent format. The division hit record profits of €1.1bn. Mr Zeiler hailed the success of the third series of Britain's Got Talent. The final was watched by 18.3 million viewers, making it the highest-rated entertainment show of the decade.