BBC Worldwide boasts record profit increase for 2009/2010

The commercial arm of the BBC has released its annual review, reporting a 36.5% profit increase over 2008/2009 and forecasting 'significant' co-productions in EMEA and the U.S. for the year ahead.
July 5, 2010

The commercial arm of the BBC, BBC Worldwide, has reported what it calls a record result for profit in its annual review for 2009/2010. For the year ending March 31, 2010, profit rose by 36.5% to £145.2m (from £106.4m in 2008/09).

Overall sales also notched up an increase of last year – 7.0% year on year to a new high of £1074.2m from £1003.6m. The proportion of sales generated overseas increased to 54.6%, up from 51.3% last year.

‘The company’s financial performance accelerated across almost every single business and in almost every single territory,’ said the company’s chief executive John Smith in his review of the results. Six of the company’s operating divisions reported financial boosts in the review.

The channels division delivered sales of £262.6m, an increase of 16.4% on 2008/09, and £39.2m in profits, a 34.2% increase from last year. The company said the focus for the division this past year was on consolidation and growth of its owned and operated (O&O) thematic channels, with year on year revenues for O&O channels up 29.7%, driven mainly by subscription income culled from additional carriage of Ceebies and BBC Knowledge in Australia, and full year revenues from prior channel launches in Australia, Scandinavia, Africa and Latin America. The division also grew its international advertising sales by 41.3%.

In content and production, growth in the format business in the US, India and EMEA propelled overall sales to £97.6m, a year on year increase of 10.7%. The company said strong performances from its live entertainment business and the ongoing success of Dancing with the Stars in the U.S. helped profits increase to £17.6m. Content acquisition costs increased by 17.2%.

The global brands division, without memo reporting of key brands including Top Gear, BBC Earth and Doctor Who, reported a loss of 7.4%, up from 6.8% last year. Including reporting on those brands, profits were at £44.1m, up 39.1% over 2008/09.

Speaking of brands distributed by the company, BBC Worldwide reported its top five programs sold internationally, with three of the five being factual programs: Top Gear, Life, Planet Earth, Being Erica and Doctor Who. The sales and distribution business held steady at £240.8m (the same as 2008/09) and profit increased 4.6% to £64.2m. The company said the profit increases were mainly the result of increased volumes, higher-margin licensing deals and exchange-rate benefits from the poor performance of the sterling.

Sales fell in EMEA (to £134.8m from £139.8m in 2008/09), with the strongest results for that region coming from Scandinavia, Italy and the company’s sports sales team. The company noted that in Germany, sales were impacted by fewer coproduction opportunities. In the Americas, economic factors including exchange rates brought sales down by 3.5% and profits down by 38.5%. Meanwhile, for Asia Pacific, Australia and New Zealand reported a sales rise of 31.0% year on year, and in Asia, a 37.6% year on year increase in sales was reported, driven by strong results for Life and Rocketmen. In its outlook for the division, the company said that it expects 2010/11 will offer an improved market for finished UK programs, and that ‘co-productions will be significant, particularly in EMEA and the U.S., as we look to developing alternative funding.’

In other divisions, home entertainment brought in profits of £40.3m (up 17.8% on 2008/09) on sales of £230.0m (up 2.1% year on year), while the digital media division saw Sales of £30.0m in 2009/10, a year-on-year growth of £2.5m or 9.0%. The business reduced losses from £(29.0)m last year to £(20.8)m this past year. Sales from BBC Motion Gallery, the company’s footage licensor, fell 16.6% to £11.7m, as a result of the economic downturn and its impact on the footage division’s main clients, the broadcast and advertising industries.

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