TORONTO – CHUM Ltd. posted gains across the board in the first quarter of fiscal 2006, ended November 30, 2005.
Revenue climbed 16% to $186.7 million, as compared to the first quarter of fiscal ’05, EBITDA rose 13% to $48.7 million and cash flow from operations went up by 10%, hitting $30.9 million. CHUM operates broadcasters Citytv and A Channel, specialties like MuchMusic, Bravo!, Space and Razer, and 33 radio stations.
Revenue from the TV side of the business was $146.3 million in the quarter, a 20.3% increase, thanks to good performance from the company’s specialty channels and the effect of the addition of the former Craig Media assets. Radio revenue was $37.4 million, a 3.5% increase.
TV operating expenses also rose substantially, thanks to programming investments, by 20.8% to $106.1 million.
EBITDA on the CHUM Television side was $40.2 million, an increase of 19% over Q1 ’05 while radio’s was flat at $13 million.
“(M)anagement believes the company’s radio stations are facing a challenging environment in fiscal 2006, with lower growth in radio industry advertising and increased competition in certain markets,” says today’s release. “The impact of these factors has been reflected in the growth in revenue and EBITDA in the quarter compared with the very strong growth rates achieved during the corresponding period last year.”
On the TV side, there are some brands whose returns are lower than years’ past, such as Bravo!, said CHUM CEO Jay Switzer, which no longer has new episodes of Sex In The City to air. On the other hand, Space is seeing “very significant double digit” growth, he added.
The company has also moved into a “small positive position” rather than just break even with its digi-nets (PunchMuch, Razer, TVLand, Court TV Canada, etc.)
When asked about high definition during today’s conference call with financial analysts, Switzer said the company is spending $4.5 million this year on HD production and technology, adding, “it doesn’t get you where you want to go.”
Speaking about the transition from analog to digital transmitters – like CanWest Communications CEO Leonard Asper – Switzer, too said he wasn’t sure Canadian broadcasters can afford the upgrades. “The entire industry probably can’t afford to go where we need to go,” he said. “The industry has to decide on transmitters in the next few years.”
– Greg O’Brien
