The BBC-backed pay-TV operator UKTV, home to channels including Dave and Gold, has blamed a fall in profits on the cost of launching its 11th channel, Drama.
Operating profits at the broadcaster, 50/50 owned by BBC Worldwide and US pay-TV company Scripps, fell 7% to £66.2m in 2013.
But UKTV said underlying earnings before interest, tax depreciation and amortisation (Ebitda) were up 7% to £76.7m once exceptional items, such as the launch of the Drama channel on 8 July last year, were stripped out.
Revenues were up 6% to a record £278m, with reported Ebitda down 6% to £67.4m, according to the broadcaster’s annual results published on Monday.
UKTV chief executive Darren Childs said: “Investment is key to our future growth. This is a really significant phase in UKTV’s story, when we move from challenger to contender.”
The company said its total share of the audience grew 5% in 2013 to 4.7% across all its channels. Its share of commercial impacts in 2014 to date, at 9.1%, is up 17% from the same period in 2013.
Forecast to invest £110m in programming in 2013, UKTV spent £125m on content, thought to include nearly £10m on the Drama channel launch. UKTV is expected to spend a similar amount in 2014, with another significant boost next year.
Childs said: “These results show that the more we put in, the more we get out, and I am delighted that so many of our original programmes are amongst our top titles and selling so well internationally. We are becoming an increasingly significant investor in UK creativity.”
Once best known for repeating shows such as Only Fools and Horses on Gold, the overhaul of UKTV began with the launch of blokes’ network Dave in 2007 alongside a relaunch of all its channel brands.
UKTV, which has concluded long-term carriage deals with Sky and Virgin Media, said it now spends a record amount on homegrown original content.
Its programmes include Dynamo: Magician Impossible, which returned last week with 550,000 viewers for the beginning of its final series on Watch, Dave Gorman: Modern Life is Goodish and David Attenborough’s Natural Curiosities.
In a sign of the changing way viewers are watching, its on-demand viewing increased 639% in the first half of this year compared with the first six months of 2013.
UKTV’s new season of programmes will include Hoff the Record, a “semi-improvised” documentary style comedy series on Dave starring David Hasselhoff.
Scripps, which owns TV brands including The Food Network, is understood to have offered the BBC as much as £500m to take full control of UKTV earlier this year. BBC Worldwide said at the time it had no plans to sell its stake. Scripps paid £339m for Virgin Media’s stake in the company in 2011.
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