Scottish Media Group, one of the UK’s largest media conglomerates, yesterday posted H1 figures which, although in line with analysts’ expectations, reflected “the toughest advertising market of recent times”, according to chief executive Andrew Flanagan.
Pre-tax profits at £20 million ($29m) for the six months to June 30 were one-third lower than the same period last year, while revenues declined by 8.5% to £139.7m.
Commented Flanagan: “This is the toughest advertising market of recent times, and visibility is poor enough to make predictions unwise at present. However, we are managing our businesses tightly, and we have put cost reduction measures in place early.”
The second half, said Flanagan, was expected to be “no less challenging” than the first and SMG is likely to further reduce its payroll of 1,700 having already frozen capital expenditure, recruitment and management salaries. During 2000, forty staff were shed.
SMG said that a £6m decline in ITV advertising contributed to its profits slump, a further £2m was trimmed by an increase in the cost of ITV licences, while £2m was spent on increasing its stake in rival Scottish Radio Holdings. However, further action regarding SRH is unlikely, Flanagan said, until the UK government publishes its communications bill in 2002: “We are very much in a wait-and-see mode.”
Despite the 10% decline in ad revenues at SMG’s Central and North ITV franchises in Scotland, this was an improvement on the 13% fall across the ITV Network as a whole – due, claimed Flanagan, to the wresting of market share from rivals.
News source: Financial Times