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.
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)Â | (7.6)Â |
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)Â | (212.6)Â | (177.8)Â |
Reported pre-tax losses | (251.7)Â Â | (409.2)Â |
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.