SMG ANNOUNCES SUBSTANTIAL PROFITS BOOST

SMG (Scottish Media Group) has announced pre-tax profits of £30m to June 30, continuing a 400 per cent growth over the last five years.
The figures represent a 25 per cent rise from the same period last year, and have been greatly helped by the recent group additions of Ginger Television and Virgin Radio, which added a combined £7.5m profit to the group’s figures.
SMG owns the ITV franchises for Scottish Television and Grampian Television which reach a combined audience 4.6 million viewers. SMG also run ‘s2’, a youth orientated digital channel and STE, the television production division of the company. STE is responsible for the UK’s longest running detective series, ‘Taggart’ and the BAFTA award winning documentary, ‘Lockerbie’.
Chief Executive Andrew Flanagan has stated that SMG plans to raise a further £45m by a 5 per cent share issue to eliminate debt and to expand the group’s investment and acquisition opportunities. The company has also expressed an interest in bidding for Granada Media’s 25 per cent stake in GMTV, in which SMG recently expanded its own holdings to 25 per cent.
The opportunity has arisen following Granada’s soon to be completed merger with United News & Media. Current regulations will force Granada to reduce its GMTV share. There are also indications that SMG will be interested in acquiring the ITV franchise that Granada will be forced to dispose of, possibly HTV.
Carlton, another GMTV shareholder, is likely to compete with SMG on both the GMTV and ITV franchise bids. Speculation that Carlton may be interested in acquiring SMG has been denied by SMG. Granada’s 18.14 per cent share in SMG, however, would make it unlikely for an attempt to be successful.
As well as its broadcasting investments, SMG is also a major player in Scottish publishing and has plans to expand into Internet and new media businesses.