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Friday, March 5, 1999 Published at 10:49 GMT

Business: The Company File

Flat profits for United News

United News & Media, which owns Express newspapers and ITV channels Anglian, Meridian and Channel Five has reported a flat set of profits.

United, which gets most of its profits from business services, posted pre-tax profits of £336m ($540m) against £340.3m a year earlier.

[ image: United is trying to arrest the decline in newspaper sales]
United is trying to arrest the decline in newspaper sales
The group, which issued a profit warning in December only to revise earnings per share forecasts upwards in February, said the outlook for this year remained in line with its expectations.

Chief executive Lord Hollick said the group would be looking for "attractive acquisition and consolidation opportunities".

However United said it is unlikely to bid for the 18.6% stake in fellow ITV broadcaster Scottish Media that Mirror Group has put up for sale.

Lord Hollick said: "I don't think that would be a priority for us, no."

Targeting younger readers

Turnover and profits at the group's Express Newspapers operation were flat in 1998 on the previous year.

Lord Hollick said substantial investment in the Express, funded through efficiency gains, was paying off with a younger, more upmarket readership.

He dismissed speculation that United might want sell out due to poor circulation in recent years.

"Clearly if we're able to arrest the decline, which it looks as though we have been able to do, and to build the business back, then it's a valuable asset. I think we're making good progress with it," he said.

The group sold its regional newspapers last year for a £298m profit and demerged its Garban moneybroking arm at a cost of £20m.

The company was also hit by high costs of £25.5m, which were to do with the starting up of Channel Five, Line One and ITV2, the new ITV channel for digital TV.

Its business services division, which made up just over half of its total operation, saw a slowdown in growth to 4.5%, held back by a fall in its US IT-related businesses, where trading conditions worsened.

But its market research and PR Newswire press release distribution operations performed strongly.

Advertising boost

Its Anglia, Meridian and HTV franchises saw solid growth, while its share of Channel 5 benefited from a 44% jump in advertising revenues in the second half of the year.

Mr Hollick said 1999 was "off to a bright start" in a number of its businesses.

The 12% increase in ITV revenues forecast for the first quarter would benefit its ITV operations, while revenues from classified advertising and trade shows were expected to grow.

The outlook for its stable of trade magazines at the Miller Freeman subsidiary was mixed, with several markets showing no apparent sign of recovery.

Shareholders will pick up a total dividend of 22.9p, which, after the deduction of Garban's forecast dividend, marks a 0.5p increase on the previous year.

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