UKTV s investment reaps rewards

8 September 2014 UKTV's growth as a commissioning business and the increasing popularity of its channels have brought top line growth in 2013, with revenues at a record £278m, a boost to underlying profits and the promise of even greater returns in the current year.

The choice to invest in three strategic areas: content, digital distribution and new channels, including the launch of successful new channel - Drama - had an impact on reported EBITDA, down 6% to £67.4m, but once those costs are stripped out, underlying EBITDA rose 7% to £76.7m.

That kind of investment in content, distribution and new channels has already seen UKTV's reach grow this year. In the year to date, SOCI (share of commercial impacts) for the portfolio of channels reached 9.1%, a gain of 17% over the same period in 2013, from 8.2%.

The three pillars of investment are at the heart of a new growth phase for UKTV: taking advantage of the opportunity to grow market share during the UK's economic recovery.

In distribution, long term carriage deals were signed with both Sky and Virgin Media during the year - plus a new distribution agreement was made with YouView, and UKTV launched its first direct-to-consumer VoD service on PC, smartphone and tablets, initially with its free-to-air portfolio, now distributed from the new digital brand, UKTV Play.

In addition to the trove of celebrated BBC programming, along with programmes first shown on ITV and Channel 4; UKTVs brand new commissions and top-rating exclusive acquisitions are central to the networks allure for British TV viewers. In 2013, apart from its highest ever SOCI score at 8.2%, UKTV recorded its best ratings performance with an average share of 4.67% across the portfolio of 10 channels, up by 5% on the 2012 performance.

In the first six months of 2014, the number of video-on-demand viewings has increased by 639% year on year, while UKTV Play, the first interactive, digital-only brand launched in July 2014. For the calendar year 2013 (UKTV's financial year runs from January - December) revenues were up 6% to £278m. Profit margins reached 27.6% on an underlying basis (24.2% reported EBITDA).

Financial Results

Revenues £278m (2012 £262m)

Reported earnings before interest and tax £66.2m (2012 £71.5m)

Reported earnings before interest, tax, depreciation & amortisation £67.4m (2012 £71.7m)

Underlying* earnings before interest, tax, depreciation and amortization £76.7m (2012 £71.7m)

Operating Highlights

SOCI up 3% in 2013 vs 2012

SOCI up 17% to 9.1%, from 8.2% - H1 2014 vs H1 2013

On Demand viewing increased by 639% - H1 2014 vs H1 2013

New channel Drama launched

Long term carriage deals agreed with BSkyB and Virgin Media

Further digital distribution secured through YouView

Investment in programming and programme launch support £125m 2013

International sales building increasingly important role in P&L, tripling since 2010

*After removing costs of launching the Drama channel and associated investment costs.

Darren Childs, chief executive, said

Investment is key to our future growth. These results show that the more we put in, the more we get out, and I am delighted that so many of our original programmes are amongst our top titles and selling so well internationally. UKTV is changing its role in the market, moving to the front and centre of everyone's attention whether they be producers, talent, advertisers, or, most importantly, viewers. We are becoming an increasingly significant investor in UK creativity.

This is a really significant phase in UKTV's story, when we move from challenger to contender and this is the first time in the history of British television that a non-PSB channels business has played so big a role in the ratings charts. That's reflected in our SOCI performance, where we are in sight of a 10% share in the next few years, and that is the result of a concerted effort to invest in a targeted, thoughtful way in the future of the network.

We've invested smartly in our distribution too and that has paid off with long-term deals with Sky, Virgin, BT TV, TalkTalk, UPC in Eire and YouView but most impressively in an extraordinary leap forward in our VoD performance as we launched direct to consumer video applications under UKTV Play. We are widening our distribution and broadening the viewer's chances for seeing our shows: all in all, this is a modern TV company, fit for the future.

ENDS For more information contact:

Zoe Clapp, Communications Director, UKTV

About UKTV UKTV is the multi-award winning media company that reaches over 42 million viewers per month.

UKTVs eleven imaginative brands - Watch, Dave, Gold, Alibi, Eden, Yesterday, Drama, Really, Home, Good Food and UKTV Play - include the most watched non-PSB channel, the most watched channel in the Factual genre and the most watched channels in the Lifestyle genre. The company's most recent financial results showed a record-breaking year-end revenue of £278m, and operating profit at £66.2m.

UKTV has a truly innovative model, curating brand-defining commissions, high-profile acquisitions and the very best of BBC and Channel 4 content, and embracing technology to deliver inspired channels to audiences through Freeview, Sky, Virgin Media, BT, TalkTalk, YouView, plus direct On Demand digital services. The network distributes its highly valued programmes to 200 territories.

Now celebrating its 21st year at the forefront of digital television, UKTV - an independent commercial joint venture between BBC Worldwide and Scripps Networks Interactive, Inc. (SNI) - is proud to be the only British broadcaster to be recognised by Best Companies.

corporate.uktv.co.uk / press.uktv.co.uk / @uktv_press

LINK:	http://corporate.uktv.co.uk/news/article/uktvs-investment-reaps-reward...
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