MUMBAI: BBC Worldwide, UK pubcaster BBC's commercial arm, has published its annual review for 2005/2006 and announced record profits of £89.4 million for 2005/2006, a year on year increase of 62 per cent, with sales up by 11 per cent to £784.4 million.

The increase in overall profits was achieved by a combination of trading and efficiency improvements across the business and by selling, closing or turning around loss-making operations.

In 2003/2004, the company produced a profit of £37 million. In 2004/2005, this rose 50 per cent to £55 million. This year, it exceeds £89 million – a 144 per cent increase from two years ago and 62 per cent up on last year. Across the business, the return on sales was 10 per cent in the year and the EBITDA margin was 22 per cent. For the first time, over 50 per cent of revenue came from overseas sales.

The underlying profit, excluding one-offs, disposals, restructuring and legal costs, is £92.1 milion, up from £53.3 million in 2004/05, and an increase of 73 per cent in the year. This figure has also doubled over two years.

Following a strategic review and reorganisation, the company is now focused on profit and growth. It operates seven businesses: global channels, global TV sales, magazines, home entertainment, children's and digital media, plus the recently created content and production business.

Both through its own operations and via partnerships and joint ventures, BBC Worldwide seeks to drive commercial benefit from rights and content on behalf of the BBC and other UK rights holders. In the UK, its products and services help to extend audiences' appreciation of BBC programmes. Internationally the company promotes the best of British talent and culture across a range of media.

BBC Worldwide CEO John Smith said, "It has been an outstanding year. Our turnaround and repositioning strategy has enabled us to exceed our targets, streamline the business and prepare for significant growth both in the UK and abroad. 2006/2007 will see us deepen our commitment to digital media with the proposed development of the commercial iPlayer and bbc.com, the digitising of the archive and more VoD deals. We will continue to invest in acquiring rights and maximising returns across all media. We will also be rolling out new channels and content and production strategies later this year."

BBC DG Mark Thompson says, "We set BBC Worldwide an ambitious target to double profits over two years, and I'm delighted they've managed to exceed it. The ongoing work in focussing the business and increasing efficiency is drawing direct investment back into programmes and services for UK licence payers."

Highlights of the year include:

Global Channels
Sales £165.4m – up 18% from £140.6m.
Profit £6.9m – up 73% from £4.0m.

UK's No 1 TV Channel operator with 18 channels including ten in the UK held in joint venture with Flextech (UKTV) Channels will be an important growth area in the future.
Channels reach 288 million homes globally – up from 245 million last year; BBC America reached target of 45 million US homes and is now in half cable homes in USA. Ratings rising 20 per cent in primetime
UKTV delivered £4 million dividend to BBC Worldwide, over 90% up on 2004/2005.
Darren Childs who was earlier previously Sony Pictures Television International MD was recruited to head up business.
BBC Japan ceased broadcasting, but BBC Prime launched in South Korea.
2005/2006 was an intense period of assessment and review.

Global TV Sales

Sales £173.1m – up 9% from £158.8m.

Profit £31.7m – up 3% from £30.9m.

No 1 Exporter of television programmes.

30th Year of BBC Showcase where 500 broadcast buyers attend to browse and buy from a catalogue of some 40,000 TV hours. Second year of BBC Showcase in Latin America.

It re-focussed strategy into 'emerging' and 'developed' markets. Growth expected in certain territories - India, China, Latin America, Russia and Poland.

New contemporary drama re-ignites market for British shows.

Seven pitches for Indian FM radio licences were won with partner Mid Day Multimedia.

It also distributes Indie-produced programmes commissioned by ITV, C4 and Five.

Content and Production

Sales £36.1m – up 173% from £13.2m.

Profit £3.2m – up 220% from £1.0m.

New division, headed up by director Wayne Garvie (joined from BBC Entertainment), comprising the Independent Unit, Investment Unit, format sales and local production.

Voted No 1 Distributor of Choice by UK Independent Producers (Broadcast, Sept 2005).

Production office opened in Los Angeles in 2005.

Dancing with the Stars - the international format for Strictly Come Dancing - has now been sold in 27 countries and won several awards including the Broadcast award for Best International Programme Sales. It is ABC’s top rating entertainment show (US) and on Series 5 in Australia. Following success of Deep Blue, the film Earth is now in development with BBC Production.

Magazines

Sales £163.7m – down 3% from £169.4m.

Profit £19.3m – down 12% from £22.0m.

UK's third largest consumer magazine publisher, sold over 90 million magazines in 2005/06 UK's third largest consumer magazine publisher, selling over 90m magazines in 2005/06 – ie- 170 every minute.

One in four adults reads a BBC title every month.

Profit shows an apparent reduction on 2004/05, but that year included a number of one-off items such as the sale of Eve magazine, which if excluded, leaves a year-on-year improvement of 2.5%.

Post year-end, 61% of specialist publishing company Origin (and the non-BBC titles it publishes) was sold to a management buy-out team. BBC Worldwide will retain a minority stake for a period of time as part of a staged exit.

CBeebies Weekly and BBC Sky at Night launched (and Doctor Who Adventures and Amy just after year end).

Radio Times is the UK's biggest-selling premium-priced listings magazine and No 1 magazine brand.

Subscriptions are approaching 600,000 and a key area of growth. Dovetail joint venture formed to grow fulfilment business.

International activity grew: Top Gear now published in 30 countries and international licensing contracts increased to nearly 30.

Joint venture with The Times of India, Worldwide Media, now one of India's largest magazine companies; Top Gear magazine launched there in 2005/2006.

Home Entertainment

Sales £175.3m – up 9% from £160.8m.

Profit £25.8m – up 197% from £8.7m.

First full trading year for 2 entertain – a joint venture with Woolworths plc. Sales of £115m delivering £25.8m profit, largely on DVD sales (also from music and film production). No 1 UK-owned DVD/Video distributor.