Viacom's Channel 5 in U.K. Reports Record Full-Year Financials
The company's operating profit rose to $72.4 million and revenue jumped 19 percent, confirming a record year.
Viacom's Channel 5 in Britain confirmed record full fiscal-year financials on Monday, making good on its promise of its first-ever back-to-back years of profits.
As reported by The Hollywood Reporter, Channel 5 and Viacom's broader U.K. networks business were on track for record fiscal years.
Channel 5, which includes the flagship broadcast network of the same name plus other channels, for the fiscal year ended Sept. 30 reported a record operating profit of $72.4 million, or £58.4 million, up from £14.9 million for the previous fiscal year. Channel 5 said its profit after tax and extraordinary items reached $52.4 million (£42.3 million), up from £36.5 million in the previous year.
Revenue jumped 19 percent to $475.5 million (£383.6 million), also a company record. When adding pay channels to the Channel 5 performance, Viacom's U.K. networks reached a record share of viewing and record revenue in the latest fiscal year, as previously reported.
The financial update comes at a time when Viacom and CBS Corp. have been discussing a possible recombination. CBS chairman and CEO Leslie Moonves is expected to lead the combined company if a deal can be reached. Some analysts have wondered if Viacom's international networks could come up for sale in the case of a combination.
While Viacom has faced challenges in its U.S. networks and film business, and controlling shareholder National Amusements has pushed for a possible recombination with CBS, the company’s international channels business has been a rare bright spot. Recently named acting CEO Bob Bakish has been leading the international business.
Viacom closed the $725 million acquisition of Channel 5 in late 2014.
Viacom executives have said that additional original content investments at Channel 5, a refocusing on a younger demo and cross-promotion of networks and their shows have all helped drive the performance.
David Lynn, president, U.K., Northern and Eastern Europe for Viacom's Viacom International Media Networks unit, which houses Channel 5, said on Monday: "Channel 5 is radically different to the network Viacom first looked at buying three years ago; it has an entirely new look and just seven shows still broadcasting that were on air in 2013. This transformation has taken place under American ownership, but it is being driven by original British content."
He added: "We’ve transformed the business model, through our advertising partnership with Sky Media and by getting Channel 5 to work more closely with our pay TV channels, making it sustainably profitable for the first time, in spite of recent economic uncertainty."
The company’s revenue, largely driven by advertising, "benefited from a strong ratings performance relative to its main free-to-air competitors," Channel 5 said. "For the second financial year running, Channel 5’s family of channels was the only terrestrial portfolio to grow its share of total TV viewing in the U.K. … gaining 2 percent to record a 6.13 percent share. It enjoyed particularly strong portfolio growth amongst younger audiences with a 9 percent increase in share of viewing amongst 16- to 34-year-olds."
Added the company: "Channel 5’s ratings uplift during a year of high-profile televised sporting events, including the Olympics, Paralympics and [soccer tournament] UEFA Euro 2016, was driven by an increase in content spend of 11 percent during the financial year."
Popular factual series provide the backbone of Channel 5’s schedule, with such newer ratings hits as The Yorkshire Vet and established hits like Ben Fogle: New Lives in the Wild. Channel 5 has also started doing original comedies and entertainment shows again under Viacom's ownership. Among them are mockumentary Borderline and the U.K. version of Lip Sync Battle.