Record profits for BBC Worldwide

Hit shows, new channels driving strong growth

LONDON — BBC Worldwide, the pubcaster’s commercial arm, produced record profits for 2006-07, recording a 24% hike to £111.1 million ($222.2).

For the year ended March 31, Worldwide’s sales amounted to $1.6 billion, a period during which the outfit had mainly exceeded expectations, according to CEO John Smith.

He said: “BBC Worldwide has achieved a three-fold increase in profits in the last three years. We have exceeded expectations in most of our businesses over the past 12 months, reflecting healthy returns from our new channels business, strong TV catalogue sales and growing demand internationally for BBC formats.

“We are now investing to build our digital offering and strengthen our position in markets such as the U.S., China, India and Australia, creating one of the world’s premier content networks.”

The proportion of sales outside Blighty was up by 5% year on year to 46%.

Investment in BBC-commissioned programs headed north – from $178 million to $192.6 million.

Of Worldwide’s six divisions, only one – home entertainment – failed to increase profits – down from $55.4 million to $48.8 million, mainly due to losses in children’s, previously a stand-alone department.

The combo’s global channels activities increased profits from $13.8 million to $41.8 million, with 28 channels available in more than 259 million homes internationally broadcasting in 15 different languages.

Thanks to titles such as “Doctor Who,” “Robin Hood,” “Life on Mars” and “Planet Earth” – viewed in 95 countries and generating more than $44 million in global sales to date – TV sales increased from $377.8 million to $432.8 million.

Overall profit generated by TV sales grew from $67.4 million to $80.4 million.

In Europe (excluding the U.K.), TV sales surged 23% from $93 to $114.2 million, helped by a more localized sales strategy. However, the strong pound against the dollar and a high proportion of co-production deals meant weaker profits in the Americas, despite sales having increased by 17.2%.

Smith indicated that the U.S. was a key priority for investment and growth over the next five years.

This will include the expansion of Worldwide’s Los Angeles production business on the back of new commissions and the opening of a New York production operation focused on the cable industry, said the company.

Changes implemented by new BBC Worldwide Americas topper, Garth Ancier, are also underway at cable channel BBC America, which has struggled in a very competitive market place.

Said Smith: “Growing our business in America is absolutely key to BBC Worldwide’s global strategy and is reflected heavily in our five year plan.”

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