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Wednesday, 23 May, 2001, 10:27 GMT 11:27 UK
Carlton profits slide
![]() John Thaw as Inspector Morse, a perennial Carlton hit
UK television group Carlton Communications is halving its shareholder dividend after weakness in the advertising market hit first half profits.
British media stocks have suffered this year with the end of the dot.com boom, while an economic slowdown in the US has eroded marketing budgets. Carlton, a major shareholder in the ITV network, said it has seen a 6.3% drop in first-half advertising revenue. It believes the fall was cyclical, but is unable to forecast an improvement. A Carlton spokesman said: "Weaker demand for advertising has persisted into our third quarter [to June], particularly from the internet, consumer goods and telecommunications sectors. "It is not possible at this stage to predict with any certainty the timing of an underlying improvement in the advertising climate." Carlton shares, which had rallied 8% over the last week, slipped 12p or 2.9% to 400p in early trade. The company operates the television franchise for London, the Midlands and the West Country. Dividend cut
Carlton said it will halve its interim dividend to 3.275p per share and its planned final dividend to 5p. This follows the sale last year of film processing unit Technocolour, which accounted for about half of Carlton's sales revenue, to France's Multimedia for $2.07bn (£1.45bn). Pre-tax profit - before digital spending and without Technicolor - fell to £65.8m ($94m) in the six months to 31 March from an equivalent £97m. Carlton said its pre-tax investment in ONdigital, a terrestrial digital TV platform it shares with Granada, rose 20% to £83.3m in the first half, with £9.4m spent on sports channel ONsport. ONdigital, which will be rebranded as ITV Digital later this year, has targeted break-even and 1.7 million subscribers by early 2004. Carlton said this would require around £200m more in spending over the next three years.
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