Media group Wireless, the previous owners of television channels UTV and UTV Ireland, said on Thursday that it is targeting double digit profit growth as it pivots into a radio-focused business.
In an “eventful” 2015, group operating profit fell back to £13 million. This reflected an unfavourable comparison to 2014 for its biggest radio asset, TalkSport, which collects higher revenues in the years in which big football tournaments take place.
During the year, the group launched the UTV Ireland channel then later agreed to sell its entire television business to ITV for £100 million, while it also offloaded Liverpool’s Juice FM to Global Radio for £10 million.
The group, which owns six radio stations in the Republic, also noted a negative impact from foreign exchange movements and “increased competitive pressures” in the Irish radio market.
Revenues fell back by almost 10 per cent to £75.1 million, in the twelve months to the end of 2015, down from a restated £82.4 million for 2014, while pre-tax profits rose by almost 50 per cent to £17.6 million.
The group, which announced its new name in early March after the sale of the UTV television business was completed, said it will pay a final dividend of 7.60 pence post share consolidation.
"Certainly it was an eventful year," said Richard Huntingford, the group's chairman, who will become its executive chairman following the retirement of chief executive John McCann in May.
Mr Huntingford said the company’s double digit growth target could be achieved in the medium term by the “very focused radio group” that remains.
The group has an agreement with ITV to retain office space in Belfast’s Havelock House, which houses the studios for the original UTV channel, but will eventually “transition” out of the building.
However, it intends to remain headquartered in Belfast, Mr Huntingford said.
UTV Ireland
Wireless’ old television business, which included UTV Ireland, reported a loss after tax of £5.3 million. Wireless said that factors behind its failure to capture a significant market share included consumer confusion around both re-tuning of digital receivers and also programming inconsistencies with the long established UTV Northern Ireland.
Weekends also proved difficult, due to a ratings underperformance for key entertainment programmes to which it had the Irish rights. This “undermined overall audience delivery and therefore advertising revenue projections, leading to revisions of profit expectations”, it noted.
Tough radio market
Although it has some digital media businesses, Wireless’s main interests lie in radio. Mr Huntingford said there were no plans to make any radio acquisitions, but that it believed it could swell its radio revenues through organic growth.
The group owns music stations FM104 and Q102 in Dublin, and Cork’s 96FM and C103, which has lost market share in recent times to rival Red FM.
There are no plans to sell any of the stations in the Republic, Wireless said, despite the fact that the Irish radio advertising market, which has fallen 50 per cent from peak to trough, is “only slowly” moving out of the trough.
The group’s chief operating officer Scott Taunton said it had been “surprising” that the radio market in the Republic had not recovered to the same extent as the wider economy and that the group was “pleased” that advertising agencies were predicting growth for the market for 2016. The group itself expects single digit revenue growth from the Irish stations this year.
In Britain, Wireless has recently launched three new national digital radio stations, TalkSport 2, TalkRadio and Virgin Radio. Mr Taunton said this was a different type of investment to the launch of UTV Ireland as it involved "piggybacking on existing infrastructure".
Operating losses at the three new stations are anticipated to be circa £3.6 million in 2016, moving to a small loss in 2017 and securing profits thereafter. As with TalkSport, the new stations are expected to benefit from the impact of the Euro 2016 football tournament.
