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Friday, December 11, 1998 Published at 16:36 GMT

Business: The Company File

Cautious outlook for United News

Shares in United News & Media, owner of the Express Newspapers and several TV companies, have fallen sharply after it warned that this year's profits would be slightly below forecasts.

United's shares, which have already fallen 22% over the past three weeks, were also weighed down by a sharp drop in the overall market.

They were down 2.7%, or 14p, at 509 by 1400 GMT.

The initial fall in United's share price was triggered late last month after the Independent Television Commission proposed lower-than-expected cuts in the fees for its three ITV franchises.

United plans to accept the terms for its HTV and Meridian permits but is going to re-apply for Anglia's renewal in the next two years.

It stands to save about £23m next year in licence payments - half the amount expected by some analysts.

Confidence in the future

However United said it was confident going in to next year, although some of its markets were likely to continue to be weak.

The company said: "Overall, the group has made good progress during 1998, although the overall trading result will be slightly below our earlier expectations.

"Revenues have grown and, after allowing for currency, the changes in ITV funding and biennial shows, we have achieved a satisfactory level of underlying profit growth while maintaining a high level of of internal investment," it added.

United said market conditions had been mixed for its core business services division, with good conditions in Europe and the United States, while Asian markets remained difficult.

TV ads selling well

As well as owning HTV, Meridian and Anglia, the firm also owns a stake in Channel 5.

United said advertising revenues for its TV businesses grew by more than 4% in the last quarter, while production will be up more than 30% for the year.

However, the launch of digital TV will incur new costs.

Trading in its consumer publishing division remained strong, with The Express performing well in difficult conditions.

United is due to report its yearly results on 5 March.

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