Lagardere reports mixed fortunes

Prospects for 2008 are good

Lagardere’s TV results last year were slightly dented by its acquisition of a 20% stake in French paybox holding Canal Plus France and merger costs from CanalSat’s merger with rival satcaster TPS.

But the outlook for Lagardere’s TV interests looks rosier this year, with continued strong growth expected at the giant conglom’s DTT assets, and Canal Plus showing signs of a bullish turnaround and rapid assumption of merger expenses.

Net sales for Lagardere — a Gallic publishing, retail, sports events aerospace and media giant — rose 8.5% to Euros 8.58 billion ($13.4 billion) in 2007.

Operating profits (EBIT) were also up by 22% to Euros 636 million, aided by the sale of a 2.5% stake in Euro aerospace giant EADS for $736 million.

Early 2007 saw Lagardere convert its 34% stake in digital multi-channel operator CanalSatellite into a 20% shareholding in its new owner, Canal Plus France, a joint venture between Vivendi’s Canal Plus Groupe, Lagardere, TF1 and M6, which merged CanalSat with the TF1/M6-owned satcaster TPS.

Merger charges drove down Lagardere profits from Canal Plus France to $15.6 million vs. $81.1 million in income from CanalSatellite in 2006.

But Lagardere’s balance sheet value of Canal Plus France rose 35% to $2.24 billion compared with the value of CanalSatellite in 2006.

The subs roll at Canal Plus France — up 280,000 to 10.54 million last year — suggests, however, that CPF will soon be showing more blue sky for Lagardere in 2008.

Lagardere’s other TV assets painted a mixed picture, as it attempts to turn around its thematic and DTT channels.

TV revenues at Lagardere Active, the conglom’s media division, were down 5.4% to $327.6 million, trimmed by currency rates.

The Lagardere co-owned youth channel Canal J proved the seventh most-watched niche TV channel in France last year, notching up an average 4.7 million viewers.

Gulli, a DTT channel launched June by Lagardere Active and pubcaster France Televisions, has launched strongly, Lagardere reports.

Ad revs are up 370% for Lagardere DTT channels, the company said in a 2007 results report Wednesday.

But, countering that trend, Lagardere also reported that the channels are seeing lower returns from renegotiated satellite and cable carriage rates.

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