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Technicolor fuels U.K. giant’s profit surge

:LONDON – A powerhouse performance from Technicolor helped to drive pre-tax profits at its parent company Carlton Communications up 20% to £295.1 million ($487 million) for the year ended Sept. 30.

Technicolor’s advance was fueled by bigger theatrical releases from the Hollywood studios and the rapid growth of the U.S. video retail market.

London-based Carlton also experienced healthy growth in its British broadcasting and TV production business, which principally comprises the two largest regional stations in the ITV network. Overall Carlton’s gross sales rose by 6% to L1.677 billion ($2.77 billion).

In the past fortnight Carlton moved to snap up a third ITV station, the tiny Westcountry TV, for $140 million, and the gameshow producer Action Time for $5.8 million.

Carlton chairman Michael Green made clear that he sees expansion of the company’s existing businesses as its main priority for growth, rather than diversification through acquisition.

Pay TV designs

But one major new area now being targeted by Carlton is pay TV. The company is the U.K.’s largest free TV broadcaster, but is starting to edge into cable and satellite with Carlton Select and the Carlton Food Network, and has its eyes on the U.K.’s upcoming digital terrestrial TV licenses.

In the meantime, Technicolor is steaming ahead. Carlton’s film division, which includes Technicolor’s film processing business, increased its operating profit by 27% to $87 million, and its sales by 18% to $489 million.

In June ’95 alone, five films processed by Technicolor were released in the U.S. with more than 3,000 prints – “Twister,” “‘Eraser,” “‘Cable Guy,” ‘”The Hunchback of Notre Dame” and ‘”The Rock.”

Vid division strong

Carlton’s video division, encompassing Technicolor’s video duplication for several Hollywood studios, grew its profit by 21% to $120.8 million and its sales by 9% to $850.2 million.

Video sell-through accounts for 90% of Technicolor’s video production. The U.S. sell-through market grew 16% in the U.S. last year, and is forecast to expand by another 30% over the next five years. European sell-through grew by 22% last year.

Television, including the ITV stations Carlton TV and Central TV, remains the parent company’s single largest unit, with profit rising 5% to $213.5 million and sales up 2% to $1.131 billion.

There was a mixed picture at Carlton’s post-production products division, which principally includes Quantel. Sales were down 2% to $272.6 million, but profits raced ahead by 33% to $71.1 million.

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