Like for like advertising revenues at Carlton Communications fell by 13% year on year for the six months ended 31 March 2002, the company’s results showed this morning. However, the ITV giant says that there are early signs of a recovery in the demand for advertising at present.
Pre-tax profit before interest at the company fell by 71.8% from £40.1 million in 2001 to £11.3 million this time. Overall loss before tax for the group was £179.4 million, down from £277.3 million last time.
ITV Digital closure costs Carlton The closure of ITV Digital and ITV Sport incurred exceptional charges of £99.0 million, slightly above the figure predicted by analysts at Lehman Brothers (see Carlton And Granada Need ‘A New Plan’, Say Lehman Analysts).
The group this morning said that the exit from the ITV Digital business was one of the principal features of the company’s first half, along with managing the advertising downturn and growing its non-ITV businesses.
“Carlton’s pre-tax investment of around £600 million in ITV Digital has proved unsuccessful. Following months of strenuous restructuring effort, ITV Digital’s pay television business, jointly owned with Granada, was placed in administration at the end of March. Regrettably, negotiations with other broadcasters and suppliers proved fruitless and the Administrators closed the business on 30 April [see City News],” read this morning’s statement.
Carlton said that it is still pursuing multi-channel, digital terrestrial TV developments and is “working closely with other free-to-air broadcasters to secure its future as a viable distribution platform for current and future ITV channels.”
Advertising Like for like advertising was down by 13% during the period, with a poor market exacerbated by increased competition from multi-channel TV and the BBC. However, Carlton says that there are early signs of a recovery in demand for advertising in the second half, “even taking into account the expected fillip of the World Cup finals in June. Encouragingly, advertisers in most major categories are showing interest in renewed activity.”
Cinema Carlton Screen Advertising revenue in the UK and Ireland in the first six months increased by 31% to £32 million, helped by strong feature film releases including Harry Potter and the Philosopher’s Stone and Lord of the Rings. Cinema admissions in 2001 were the highest since 1972 and admissions in the first 3 months of 2002 rose by 37%.
In the US, Screenvision, a 50:50 joint venture with Thomson, experienced a challenging half year, but increased its national coverage to almost 50% share of cinema screens which take advertising.
In May, Carlton and Thomson announced the proposed acquisition, in a 50:50 joint venture, of the cinema advertising businesses owned by UGC of France and the Belgian broadcaster RTBF (see Carlton And Thomson Extend Cinema Interests In Europe).
At 9.45am this morning, shares in Carlton were down 1½p at 261½p.
