BBC WW ups revenues, takes Kangaroo hit
Despite revenues now in excess of £1 billion for the first time, profits at BBC Worldwide slid for the year to end-March 2009. The bottom line was hit by investments, including that in stalled internet TV joint venture Kangaroo for which the broadcaster took a £8.9 million charge, and a one-time £8 million charge following the collapse of DVD retailer Woolworths.
Revenues rose 9.5% to £1,003.6 million (US$1,637.8 million) from £916.3 million the previous year. Operating profits were down 12.8% to £102.6 million from £117.7 million as planned investment impacted the bottom line. Profit before interst and tax fell from £117.7 million to £85.7 million, hit by exceptional charges but the unit said “underlying profit” grew in line with the revenue increase to well in excess of £150 million.
Dividend payments to the BBC increased from £49.4 million to £68.8 million. With increased direct invesment in BBC programming and rights, overall return to the corporation grew by around 20% to over £170 million.
Progress was made on all key strategic objectives, the unit said. Share of income generated from outside the UK rose from 48.6% to 51.3% of the total (target - two thirds by 2012); revenues from online activity rose from 2.7% to 4.6% (target - 10% by 2012); 15 more BBC-branded channels were launched and TV production capability expanded to New York, Toronto and Paris; and minority stakes were secured in a number of UK independent companies to provide seed-funding in return for distribution rights. The remaining 80% of Australian joint-venture entertainment channel UK.TV was also acquired from partners Foxtel and Fremantle. BBC Worldwide is targeting acquisitions to help achieve its overall plan.
Sales at the channels division rose 23% from £183.3 million to £225.6 million, with profits up 135% from £12.6 million to £29.6 million. There are now 44 channel feeds reaching over 300 million viewers.
But the failure of the Kangaroo joint venture with ITV and Channel 4 has hit hard. While the Digital Media section of the business had sales up a whopping 56% (£34.2 million vs £21.9 million), losses doubled, up to £22.8 million from the previous year’s £10.9 million, largely thanks to the £8.9 million loss provision for Kangaroo.