UK terrestrial broadcaster Channel 4 has announced record profits.

The state owned but commercially funded network reported post-tax profits of $46 million ($84.55m; €66.79m) for 2004, a rise of 34% on the previous year.

Imported shows such as The Simpsons and Desperate Housewives and the popularity of homegrown fare such as Wife Swap and Shameless helped boost viewing share, up slightly to 9.8%, and ad revenues, up 8%. Sales rose to £841.4m.

Says ceo Andy Duncan: "The creative strength of our schedule allowed us to buck the downward trend in terrestrial TV viewing last year."

The surplus will be ploughed back into programming and into digital initiatives such as the fall launch of More4, an upmarket offering for the over-35 audience.

However Duncan, a former marketing boss at the BBC warns: "The size of our surplus and the strength of our position in the short term should not blind anyone to the challenges that lie ahead."

He adds,in a thinly veiled reference to previous requests for government funding [WAMN: 30-Nov-04]: "Our audiences and our revenues will come under pressure as digital television penetration increases and we will need to be at our sharpest and most agile to prevent a deficit developing."

Data sourced from GuardianUnlimited (UK); additional content by WARC staff