Losses at UTV Ireland this year may be on track to be double what the company behind the channel, UTV Media, initially guided, but the revision to its forecasts last month hasn't deterred equity analysts at Merrion Stockbrokers from selecting it as a medium-risk stock pick for the second quarter.
"Longer term, we believe the business will do well at the expense of TV3, " Merrion writes in its latest outlook report. The launch of the new UTV Ireland service, when combined with its radio interests across Britain and Ireland, leaves the company "well-positioned to benefit from an uptick in advertising revenue", it says.
UTV Media recently indicated that the new Republic of Ireland channel would make a loss of £6 million (€8.4 million) this year and conceded that building its audience had been “slower than expected”.
But to potential stock-buyers, Merrion highlights that the Belfast-based company’s “period of extensive investment” is coming to an end, while its planned sale of some of its local radio stations in Britain could net it some cash.
It forecasts lower net debt and higher dividends. For higher audiences, meanwhile, UTV Ireland will now be looking to chat show Pat Kenny in the Round and its guests, the first of whom will be everybody's favourite astronaut, Chris Hadfield.
