U.K.’s Central TV posts best-ever annual results

Central Independent Television, one of the biggest companies in the United Kingdom’s ITV network, posted its best-ever results yesterday.

For the year ended Dec. 31, 1992, net income before tax was T41.1 million ($ 61 million), an increase of 67.9% on the previous year. Gross revenues were up 8 .7% to $ 496.5 million, mostly as a result of an 8.8% increase in advertising sales. Central’s share of the ITV ad pie jumped from 14.4% to 15.1%, its highest-ever level.

Worldwide program sales increased 8.5% to $ 112 million.

While the company’s underlying performance was undoubtedly strong, as reflected in a 12% increase in operating income, the real boost to its bottom line came from much lower payments to the government via the Exchequer levy. The government last year changed the basis of calculation of the levy, which all ITV companies have to pay, resulting in a $ 12.7 million windfall for Central.

Payments to the government will be even lower, with Central paying $ 3,000 a year for its ITV franchise.

Central’s balance sheet also strengthened, with net cash flow from operations reaching $ 67 million, compared with $ 7.3 million the year before, and net cash at year’s end totaling $ 14 million compared with a deficit of $ 13.4 million in 1991.

That deficit arose from one-time costs associated with redundancies and restructuring. Central employs 930 staff, compared with a peak three years ago of more than 2,000.

Analysts expect the slimmed-down and more efficient Central to generate substantial cash each year to the end of the decade. The question arises, what will the company do with the surplus?

According to chairman and chief exec Leslie Hill, Central will not diversify but will continue to concentrate on its three core businesses: broadcasting, production and program sales.

Hill is hoping, however, that regulations limiting the takeover of other firms in the ITV will be relaxed. If so, Central most likely would make a bid for the Western England franchise holder, HTV.

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