Worldwide revenues top £1 billion, but Kangaroo costs hit profit

Revenues at BBC Worldwide topped £1 billion (US$163 billion) for the first time in the company’s 2008/2009 reporting year. Worldwide, the commercial arm of the UK public broadcaster, recorded a 9.5% increase in sales that edged a fraction over £1 billion.

However, operating profit slipped 12.8%, taking the total to £102.6 million. The company blamed planned investments for the decline. It has acquired arrange of companies in recent times including, controversially, the Lonely Planet travel guides.

It has also acquired stakes in small production houses in Australia, Argentina, Canada, France, Russia and India and a host of UK indies in recent times. But Wayne Garvie, director of content and production at BBC Worldwide, suggested that, looking ahead, it is more likely to cut first-look deals with producers rather than taking equity stakes.

Exceptional items, including costs associated with investment across failed on-demand service Kangaroo, hit pre-tax profit, which was £85.7 million, compared to £117.7 million a year earlier. Worldwide confirmed that, while an international launch of its iPlayer catch-up service is made difficult by rights and commercial issues, it is looking at opportunities to launch its long form content online internationally.

Worldwide chief executive John Smith also said that it is continuing to talk to UK commercial broadcaster Channel 4 about the creation of a new joint venture, but that talks between the two had been ‘more complex and difficult’ than either party had expected.

Worldwide said that, for the first time, over half of its income was generated outside the UK. Online revenues increased through the period and accounted for 4.6% of the total and the company said it wants this revenue stream to account for 10% of the total by 2012.

On the channels side, Worldwide launched 15 new offering through the year and revenues were up 23% year-on-year to £225.6 million and profit was up 135% to £29.6 million. Revenues from content and production increased 19% to £88.2 million and profit by 4%, taking the total to £16.7 million. Worldwide said the numbers were boosted by its top format, Dancing with the Stars.