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Tuesday, 5 December, 2000, 10:29 GMT
Carlton nears Technicolor sale

Carlton: Profits at the top end of expectations
The UK's Carlton Communications has said it is close to a deal to sell its film imaging and processing division Technicolor.

The news came as the media group announced an 8% rise in pre-tax profit before digital investment and exceptionals to 342m ($497m) for the year to 30 September.
Carlton chief executive Gerry Murphy
Murphy: "Driving ONdigital towards one million subscribers"

The results were at the higher end of analyst expectations but Carlton cautioned that the television advertising market was currently subdued.

Chief executive Gerry Murphy said: "We're making progress on all fronts - expanding in ITV, driving ONdigital towards one million subscribers, growing our content and developing Technicolor's digital businesses."

Premiership highlights acquisition

Chairman Michael Green said that although Carlton's proposed merger with United News & Media had been effectively blocked by the Competition Commission earlier this year, the group had made progress.

"We are developing a focused television business with strong positions in free television, pay television, programme making and the digital, interactive future."

Carlton: The figures (1999-2000)
Pre-tax profit up 8% to 342m
Turnover up 7% to 2.1bn
Dividend increased by 10%
Digital media spending of 238m
ONdigital subscribers more than double to 878,000

Carlton said it had helped open up the market for major sports' rights, acquiring the Football League and Worthington Cup for ONdigital and Premiership highlights for ITV.

Turnover was up 7% to 2.08bn in the year, helped by strong advertising revenue in the year as a whole.

Merger plans scrapped

Carlton said it was now in negotiations to sell Technicolor to a strategic buyer.

"If these talks lead to a successful outcome for Carlton's shareholders, we aim to conclude a deal in the coming weeks," Mr Green said.

Technicolor, whose turnover accounts for slightly more than half of the group's total, had been put up for sale in late 1999 as Carlton eyed a merger with former ITV rival United.

But the two firms subsequently scrapped their merger plans, claiming regulators were putting excessively tough conditions on the deal.

Dividend review

United later sold its ITV interests to Granada Media, which in turn sold the HTV franchise on to Carlton to satisfy regulatory concerns.

Carlton said it had spent 11.1m on the failed merger with United and a further 4.1m preparing for the sale of Technicolor.

A 10% increase in the ordinary dividend to 16.55 pence was proposed.

But Mr Green said the group would be reviewing its dividend policy in the current year "bearing in mind the on-going investment in digital media and the changing shape of the group as a whole".

Carlton shares were up 12.5p or 2.4% at 537.5p in mid-morning trade in London.

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