Ulster Television (UTV) is to reduce its cash hoard and pay its shareholders a special dividend of 35p sterling (51.47c) per share. Announcing a 50.8 per cent rise in pretax profit, from £8.3 million (€12.2 million) in 1997 to £12.5 million (€18.4 million) in 1998, UTV said the payout will cost the company £18.4 million (€27.06 million). It will still have net cash of some £6 million (€8.8 million) after the payment.
That payout will be on top of the final dividend of 3.50p which brings the total to 6.30p, up from 5.70p in the previous year. The special payment follows a statement last September that there would be a return of value to shareholders following an assessment of the group's future capital requirements "against current liquidity and projected cash generation".
UTV said it intends to make a further special dividend payment when it sells its remaining shareholding in Societe Europeenne des Satillites (SES) as it does not see this as a longterm investment. It has already sold one-sixth of its holding, at a profit of £2.5 million, as part of SES's public offering on the Luxembourg Stock Exchange.
This would imply a further profit of about £10 million. After tax that would indicate a further payment of about 13p per share. UTV's managing director, Mr Desmond Smyth, said there is no specific timescale for the sale but the group would have to take the share price and exchange rate into account.
A large part of last year's growth in pre-tax profit was due to the capital profit from the sale of the holding in SES and a rise in investment income from £942,000 to £1,718,000. Excluding these, the operating profit grew by a more pedestrian 13.3 per cent from £7.3 million to £8.31 million. Earnings per share rose from 10.90p to 16.09p.
UTV's sales grew by 6.9 per cent from £34.8 million to £37.2 million. Operating profit margins improved from 21.1 per cent to 22.4 per cent. Around 99 per cent of turnover came from advertising revenue. UTV said it increased its market share of the ITV network advertising income. Last autumn it reached agreement with television broadcasters in the Republic which gives it access to comprehensive viewing data for its services in the Republic. The launch of TV3 did not hit its 1998 results but is expected to have some impact this year. UTV is now available in almost 80 per cent of homes in the Republic. The aim is to increase this further "to as close to 100 per cent as is technically and economically feasible", the chairman, Mr John McGuckian, said.
On the future, the group said it will be a "considerable challenge " to maintain its market share in 1999. While there may be "some diminution" in its market share, revenue "will achieve modest growth".
