Carlton report six-month results after 'a very difficult period'

Carlton Communications' interim results for the six months ending March 31 have revealed a reduced operating profit arising mainly out of the failed pay-TV digital platform – ITV Digital – and a 13% slump in advertising sales.
Group turnover was down to £503 million from £539 million, however, cost savings of £24 million were achieved as was a reduction in net interest charges of £8 million.
In a joint statement, Chief Executive Officer Gerry Murphy and Chairman Michael Green described Carlton's pre-tax investment of around £600 million in ITV Digital as "unsuccessful". They admitted that "it has been a very difficult period for Carlton", however, they stressed that the company "should continue to explore opportunities for growth in multi-channel television".
The statement read: "We are now focused on creating value for our shareholders through strengthening ITV, growing our content and advertising sales businesses in the UK and internationally, and creating opportunities for growth in the changing landscape of the UK media sector."
Despite the failure and massive write down of ITV Digital, Carlton said that it was "confident that the UK will continue to pioneer the development of digital television". To that end, the company believes that digital terrestrial television is key to eventual analogue switch-over and it is working closely with other free-to-air broadcasters to secure a future as a viable distribution platform for current and future ITV channels.
The news that like-for-like advertising sales slipped 13% will not overly concern Carlton who announced the signing – along with joint ITV-owner Granada – of the UK's biggest-ever airtime television advertising deal on Monday. The deal will ensure a constant flow of advertising revenue from the £320 million deal with Unilever over the next four years.
The company reassured shareholders over the prospects for advertising, adding: "There are early signs of a recovery in demand for advertising in the second half."
In programming, Carlton have agreed an additional £25 million investment in the network schedule in the current calendar year.
Carlton's cinema advertising business in the UK performed well and the company extended its US cinema advertising partnership with Thomson multimedia with a European acquisition, which will accelerate our expansion in this growing market.
The statement concluded: "The draft Communications Bill, published this month, paves the way for further ITV consolidation and could enable new opportunities for working with non-European partners in the UK.
"We welcome the deregulatory thrust of the proposed legislation, and believe that the liberalisation of ownership rules will benefit viewers, advertisers and shareholders."
Carlton Communications, www.carltonplc.co.uk
(GMcG)