Interim Results - Half Year Ended 30th Sept 1999

Channel Television Group Ld 5 November 1999 The interim statement will be posted to all shareholders. Additional copies are available from: Collins Stewart Ltd 21 New Street Bishopsgate London EC2M 4HR Interim Statement for the half year ended 30th September 1999 Financial highlights (unaudited) Half year to Half year to 30th September 30th September 1999 1998 £ '000s £ '000s Operating profit 455 453 Profit before tax 484 447 Earnings per share 2.86p 2.86p Interim dividend (net) per share 1.30p 1.30p Chairman's statement ==================== The profit for the six months to 30th September 1999 was £484,000 (1998 : £447,000) an increase of 8%. Increased focus on some of the poorer performing businesses has led to an underlying overall improvement in profitability. The benefits of actions implemented by the Board over the last twelve months are now starting to show through and I am satisfied that we have gone a long way towards laying firm foundations on which to build an improved performance. Channel Television has continued to perform well. After a slower than anticipated start to the year national advertising sales have shown good growth in the second quarter to be 2.6% ahead of the same period last year at half-way. Local advertising revenue grew by 3.6%. The frequencies required for the provision of Digital Terrestrial Television have still to be agreed at international level and this has led to the deferral of significant capital expenditure. Creative Channel has enjoyed strong sales growth in the local market for production, but there have been no commissions for network programmes and, until market conditions change, there will be no new investment in this area. In line with our new corporate image the rental, retail and service business has been restyled as Channel Technology Group and its financial performance has improved. Retail sales grew 9.8% and third-party service income was 10.8% up, helped by the demand for digital satellite installations. Rental income was down 2.8%. Channel Publications performed well in Guernsey but disappointingly in Jersey. Guernsey Homefinder goes from strength to strength and is presently achieving record sales while Perrys products continue to dominate the market for maps and travel guides. The relaunched Jersey freesheet Be Smart failed to capture a viable market share and publication ceased in July. The consequent rationalisation of the business has led to a reduction in staff. Our UK business, Bourne Training, has had a disappointing six months with sales in our specialist area of computer based training adversely affected by customers concerns about Year 2000 issues. Your Board has continued to monitor the Year 2000 situation and is satisfied all reasonable steps have been taken to secure the continuity of all key operating systems. Your Board has decided to pay an unchanged dividend of 1.30p (1998 : 1.30p) per share net of Jersey income tax. Dividend warrants will be posted on 29th February 2000 to shareholders on the register on 11th February 2000. Tom Scott Chairman 4th November 1999 Unaudited consolidated profit and loss account for the half year to 30th September 1999 Half year to Half year to Year to 30th September 30th September 31st March 1999 1998 1999 £ '000s £ '000s £ '000s Turnover Continuing operations 5,615 5,754 12,110 Cost of sales (1,683) (1,614) (3,271) ------- ------- ------- Gross profit 3,932 4,140 8,839 Operating expenses (3,477) (3,687) (8,113) ------- ------- ------- Operating profit 455 453 726 Net interest receivable/(payable) 29 (6) (5) ------- ------- ------- Profit on ordinary activities before taxation 484 447 721 Tax on profit on ordinary activities (98) (141) (236) ------- ------- ------- Profit on ordinary activities after taxation 386 306 485 Minority interests - 80 80 ------- ------- ------- Profit for the financial period 386 386 665 Dividends (176) (176) (446) ------- ------- ------- Retained profit for the financial period 210 210 219 ======= ======= ======= Earnings per share 2.86p 2.86p 4.92p Unaudited consolidated balance sheet at 30th September 1999 30th September 30th September 31st March 1999 1998 1999 £ '000s £ '000s £ '000s Fixed assets Tangible fixed assets 8,870 9,085 8,943 _____ _____ _____ Current assets Stocks 762 867 630 Debtors 1,732 1,692 1,736 ------- ------- ------- 2,494 2,559 2,366 Creditors Amounts falling due within one year (1,873) (2,703) (2,241) Bank borrowings (218) (139) (65) ------- ------- ------- Net current assets/(liabilities) 403 (283) 60 ------- ------- ------- Total assets less current liabilities 9,273 8,802 9,003 Creditors Amounts falling due after more than one year (318) (354) (318) ------- ------- ------- Net assets 8,955 8,448 8,685 ======= ======= ======= Capital and reserves Share capital 675 675 675 Reserves 8,449 7,901 8,237 ------- ------- ------- Equity shareholder's funds 9,124 8,576 8,912 Minority interests - equity (169) (128) (227) ------- ------- ------- 8,955 8,448 8,685 ======= ======= ======= Net assets per 5p of share capital 66.3p 62.5p 64.3p Unaudited consolidated cash flow statement Half year to Half year to Year to 30th September 30th September 31st March 1999 1998 1999 £ '000s £ '000s £ '000s Net cash flow from operating activities 563 587 1,801 Returns on investments and servicing of finance 29 (6) (5) Taxation (156) (16) (94) Capital expenditure (391) (560) (1,088) Acquisitions and disposals 58 - - Dividends paid (270) - (446) Financing 14 101 12 ------- ------- ------- (Decrease)/increase in cash balances (153) 106 180 ======= ======= ======= Statement of total recognised gains and losses There are no recognised gains or losses in any of the above periods other than those set out in the profit and loss account. Reconciliation of movements in shareholders' funds Half year to Half year to Year to 30th September 30th September 31st March 1999 1998 1999 £ '000s £ '000s £'000s Profit for the financial period 386 386 665 Dividends (176) (176) (446) Goodwill written back - - 326 New share capital issued 2 1 2 ------- ------- ------ Net movement in shareholders' funds 212 211 547 Opening shareholders' funds 8,912 8,365 8,365 ------- ------- ------- Closing shareholders' funds 9,124 8,576 8,912 ======= ======= ======= Notes to the interim statement 1 Basis of preparation The interim financial information has been prepared on the basis of the accounting policies set out in the Company's 31st March 1999 statutory accounts. The results and balance sheet relating to the year ended 31st March 1999 have been extracted from the Company's full accounts on which there was an unqualified audit report. 2 Segmental information Half year to Half year to Year to 30th September 30th September 31st March 1999 1998 1999 £ '000s £ '000s £ '000s Turnover - external Broadcast activities 2,739 2,645 5,446 Production 269 198 446 Publishing 289 340 881 Retail,rental and service 1,888 1,803 4,068 Training 355 575 998 Other activities 75 193 271 ------- ------- ------- 5,615 5,754 12,110 ======= ======= ======= 3 Net interest receivable/(payable) Half year to Half year to Year to 30th September 30th September 31st March 1999 1998 1999 £ '000s £ '000s £ '000s Interest receivable on loans advanced 33 19 46 Interest payable on borrowings (4) (25) (51) - ---- ---- ---- (29) (6) (5) ==== ==== ==== 4 Taxation Jersey and Guernsey income tax is provided at 20% on the relevant taxable profits. United Kingdom corporation tax is provided at 21% on the relevant taxable profits. Independent review report to Channel Television Group Limited Introduction We have been instructed by the company to review the financial information set out on pages 3 to 6 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' Responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The Listing Rules of the London Stock Exchange require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts where any changes, and the reasons for them, are disclosed. Review Work Performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review Conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 September 1999. Arthur Andersen Chartered Accountants Forum House Grenville Street St. Helier Jersey 4th November 1999 Channel Television Group Limited Directors T Scott (Chairman) C R Day (Group Finance Director) J P Henwood (Group Chief Executive) M C Lucas (Managing Director of Channel Television) E J M Potter J C Rowe Company Secretary C R Day Auditors Bankers Arthur Andersen Midland Bank Plc Forum House P O Box 14 Grenville Street Library Place St. Helier St. Helier Jersey Jersey JE2 4UF JE4 8NJ Nominated advisor Nominated broker Collins Stewart Ltd Collins Stewart (CI) Ltd 21 New Street P O Box 8 Bishopsgate St. Peter Port London EC2M 4HR Guernsey GY1 4AZ Registered office Registrar Television Centre Company Secretary St Helier Television Centre Jersey St Helier JE1 3ZD Jersey JE1 3ZD Telephone: 01534 - 816800 e-mail: group-ho@channeltv.co.uk

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