TV Corp bats on despite losses

Financial director of the UK television production group, Stephen Callen, will be worried about the effect the industry-wide drop-off in advertising revenue will have on the company’s figures.

In its pre-close trading statement, the group announced that profit before tax and amortisation would be lower than expected, but that it would not be lower than £4.2m.

The Television Corporation has interests in many areas of television.

It owns several London-based production companies including Mentorn, Sunset & Vine and Venner TV, post-production facility Molinare and outside broadcast business Visions.

It is responsible for Channel Four’s highly respected and award-winning coverage of the cricket, especially the England summer tests. It also produces BBC One’s Question Time, is responsible for the Robot Wars global franchise and is involved in Sky Premiership’s football coverage.

However, the strength of some of these brands has faded somewhat recently and this, alongside the advertising slump, is causing the company some trouble.

BBC Two recently announced that it will no longer broadcast Robot Wars after the next series, which will instead be adopted by Five.

The mechanised mayhem show has also been dropped by Viacom in the US, to be picked up by broadcaster Tech TV. Both new contracts, however, are likely to be worth less than the previous ones.

To survive these tough times, the group has been refocusing on key moneymaking operations. This has meant the disposal of loss-making divisions. The Television Corporation recently announced that it had sold audio post-production business Pacifica to Technicolor Creative Services USA for a sum of £2.3m.

Not only will this sale help swell the coffers, but with a trading loss of £2.1m last year, the disposal of Pacifica and stablemate OSP should help make the profit and loss sheet slightly healthier.

‘Management will now be able to concentrate fully on the core areas of our business, and we look forward to consolidating the Television Corporation’s position,’ said Jeff Foulser, chief executive of the group.

Although these changes will not result in massive improvements in profitability, and certainly do not look like the actions of a rapidly expanding business, at least it should help the Television Corporation tough it out as the worst-ever media recession drags on.

At the moment, many companies will just be happy to make it through still trading.