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Carlton Losses Mount As More Jobs Go

Carlton Losses Mount As More Jobs Go

Carlton Communications revealed a fall of 39% in core profits in its preliminary year end results, released today. Unsurprisingly the fall in advertising revenue was the prime reason for the slump although the burden of ITV Digital continues to weigh heavy on Carlton’s balance sheet.

Around 100 hundred jobs are expected to go at Carlton, on top of the 300 already lost this year (see Job Losses Expected As ITV Restructures) as profits fell from £193 million in 2000 to £118 million for 2001. Losses including exceptionals grew from £39.1m in 2000 to £231.4 million.

A 12.7% decline in advertising income was recorded and a total of £324m was spent on digital operations, which includes ITV Digital and ITV Sport (see ITV Sport Closure Threatened By Cost Of Nationwide Contract, Says FT).

Carlton Communications Results Summary 
Year ended 30 September  2000 as restated 2001 
  £m £m 
Total turnover 2,062.8 1,601.5 
Turnover – continuing operations 987.7 1,040.1 
Headline Turnover  973.6 1,025.6 
Headline pre-tax profits before goodwill amortisation 192.6 118.3 
Goodwill amortisation (5.5) (17.4) 
Headline pre-tax  187.1 100.9 
Operating exceptional items (11.1) (7.6) 
Digital Media (215.1) (273.7) 
Digital exceptional items - (51.0) 
Continuing operations (39.1)  (231.4)  
Discontinued operations (including non-cash goodwill written back on disposal) (212.6) (177.8) 
Reported pre-tax losses (251.7)  (409.2) 
Taxation (25.7) 19.2 
Reported post-tax losses -277.4 -390 
Goodwill written-off on disposals 300 630.2 
Post tax profit before goodwill written-off 22.6 240.2 

Carlton chairman Michael Green said: “Whilst 2001 has been tough and the broader economic outlook is mixed, we have a strong position in the UK television industry, and this remains a base from which to grow in the future.”

Chief executive Gerry Murphy added: “The cyclical downturn has persisted into the first quarter of our current year and we currently estimate that ITV’s Net Advertising Revenue will be down approximately 13%. Visibility beyond this quarter remains limited, although there is great interest amongst the advertising community in next summer’s World Cup football tournament, ITV’s flagship event in the current year.”

Shares in Carlton opened at 215p and rose to a mid-morning high of 226žp before dropping down to 223p at 11.30am.

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