Thames close to deal on repeats channel

THAMES Television, which has had to refocus its business after losing its Independent TV franchise, says it is close to announcing a deal to fund UK Gold, its venture with the BBC to launch a satellite channel showing repeats.

Derek Hunt, Thames' finance director, said it had struck a deal with BBC Enterprises and other investors to fund the channel. The BBC and Thames would not have to put in capital and would be able to take profits out almost immediately.

Thames is also trying to find investors for its unopposed bid for Channel 5, the new UK television channel. Though Thames has not agreed any deal, it has had a number of expressions of interest in the project, which should be on air next year with a mix of news, films and music programmes.

It has also signed a deal to sell pounds 23m worth of programmes - including successful shows such as The Bill and This Is Your Life - and it is close to a deal to make new programmes for the BBC.

Its US operation, Reeves, is still losing money but it has sold three new drama series to the US networks.

The company has implemented draconian staff cuts to slim down for the end of its franchise on 31 December. Staff numbers have been halved to 788 and will fall to 500 by the end of this year and ultimately to fewer than 200.

The cost cutting, combined with a 6.2 per cent increase in advertising revenue, brought a massive increase in pre-tax profits in the half year to 30 June from pounds 4.09m to pounds 23.2m. The exchequer levy - the amount paid to the Government to broadcast - rose slightly to pounds 7.57m, but this would have been around pounds 14m if the Government had not changed the rules on levy earlier this year. Earnings per share were 17.5p compared with a loss of 8.6p last time, but the dividend is unchanged at 2.5p.

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