Losses Reduced At Flextech

Pay-TV channel and content supplier, Flextech, has this morning reported its preliminary financial results for the year ended 31 December 1998. Pre-tax losses at the group have been reduced to £5.1 million, from £6.2 million in 1997, although this is still greater than the £4.0 million anticipated by broker Merrill Lynch.

Turnover at the company rose by 26% to £126.9 million last year. During 1998 Flextech created a new division, Flextech Interactive (FI), in order to develop interactive and transactional services for digital television, the internet and, significantly, the cross-over between the two. Flextech Interactive has recently launched a new internet entertainment guide called SceneOne.

Flextech, which recently launched the music and comedy channel UK Play, says that its subscription revenues grew by 12%; advertising revenues were up by 70% across the core TV channels business. This compares to a growth in revenue of 27% across the whole multi-channel sector, says Flextech.

The company’s joint venture with the BBC, UKTV, completed its first full year of trading in 1998. The division’s channels struck a number of significant distribution deals with BSkyB, Telewest and Cable & Wireless Communications. UKTV’s revenue for 1998 was £51 million (up 39%). However, the venture is still running at a loss: £24.4 million, of which Flextech’s share was £12.2 million.

“Flextech’s key advantage is our strong channel viewing share which allows cross-promotion between media. The development of interactive advertising and transaction services will be a priority, since these will provide new revenue streams to the business in the future,” chairman Adam Singer says.

Merrill Lynch is predicting a turnaround to profits of around £18 million for 1999 and says that Flextech Interactive has ‘very exciting potential’.

Flextech: 0171 299 5000