8.5% increase in pre-tax profits
LONDON — Channel 5, the upstart U.K. web which launched last March, lost £87.6 million ($144 million) in 1997, according to the annual results of its 29% shareholder United News & Media.
United’s share of C5’s operating deficit last year was $41.7 million, having previously written off $102.5 million against the web’s pre-launch costs.
But despite the dent from C5, United still managed to post an 8.5% increase in pre-tax profits to $516 million. Sales were up 14% to $3.72 billion.
The C5 loss is in line with the more conservative predictions made by analysts at the time the web went on air. United claims C5 has reached its audience share target of 5% in homes which can receive it, but its reach, currently around two-thirds of the U.K. market, has not grown as quickly as planned.
United owns three regional ITV stations — Meridian Broadcasting, Anglia TV and HTV, which it took over last year — making it the third-largest group in the ITV network after Carlton and Granada.
Its entertainment interests also include production and distribution joint ventures with HBO, a stake in Village Roadshow and a partnership with Warner to build a movie studio and theme park near London.
It also has substantial interests in newspaper publishing, headed by the ailing Express titles, and in business and financial services.
United’s broadcasting and entertainment division reported a 25% increase in operating profits to $122 million, not including C5’s losses. That improvement was significantly enhanced by the acquisition of HTV last June, which means that United now commands 25% of the ITV network’s advertising revenues.
United’s production arm increased its sales to $118 million, more than double the previous year. The company is particularly strong in wildlife programming, with its Partridge Films and Survival Anglia labels making it one of the world’s top three producers of nature docs.