BBC Worldwide Ltd has today published its Annual Review for 2004/05 and announced record profits of £55 million for 2004/05, a year on year increase of 50%.

 

Sales increased by 7% to £706 million and cash flow to the BBC was up by £4 million to a new high of £145 million.

 

BBC Worldwide is the main commercial arm and wholly-owned subsidiary of the BBC.

 

Following a strategic review and reorganisation, the company now operates six businesses: TV Channels, TV Sales, Magazines, Home Entertainment, Children's and New Media.

 

Both through its own operations, and via joint ventures, it seeks to drive commercial benefit from rights and content on behalf of the BBC.

 

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.

 

Highlights of the year included:

 

• the first dividend from UKTV, its UK channels joint venture with Flextech Television, of £2.1 million

• record profits in the TV Sales business of £31.7 million – 40,000 programme hours sold

• a joint venture formed with Woolworths plc to create 2 entertain – the biggest UK-owned DVD/video publisher

• 1.3 million units of the Little Britain Series 1 DVD sold, making it the best-selling non-film title of the year

• acquiring the rights to sell ITV-commissioned and Channel 4-commissioned programmes from independent producers for the first time

• BBC magazines' circulation up 8% year on year

• a new joint venture with Times of India formed to launch magazines in India

• Strictly Come Dancing format becomes an international hit with sales in 14 countries completed so far, including the USA

 

The 2004/05 improvement in profits stemmed from strong trading in many businesses, particularly TV sales, as well as driving through cost savings of £5 million, and the sale, closure, or turnaround of loss-making operations.

 

John Smith, Chief Executive of BBC Worldwide, said: "This has been a key year for BBC Worldwide and the company has delivered excellent results.

 

"We have completed a reorganisation, made some Board changes, begun to develop a new strategy, and are now halfway towards the target of doubling profits over 24 months.

 

"The cash we returned to the BBC from both profits and direct investment into programming was also a record £145 million.

 

"The BBC's review of commercial activities last year has ended, and we now have a clear understanding of our role, scope and objectives, and of BBC Worldwide's relationship with the BBC.

 

"The contributions offered by a wide range of external contacts were very useful, and we have acted to address major concerns by, for example, selling the women's magazine eve and stopping the trailing of magazines on BBC television.

 

"This year the Annual Review provides more detail than before about BBC Worldwide's businesses and performance.

 

"The company is on a journey and the Review highlights where there is still work to do to meet the challenge of doubling profits by 2005/06."

 

Mark Thompson, Director-General of the BBC, commented: "I am delighted to see BBC Worldwide producing such excellent results and delivering more cash back to the BBC.

 

"This success reflects Worldwide's ability to create products and services which people in the UK enjoy.

 

"Internationally, BBC Worldwide's channels and publishing activities are an important showcase for the best of UK culture and creativity.

 

"I look forward to continuing great success from the BBC's main commercial entity."

 

Notes to Editors

• Profits refers to Profits Before Interest and Tax
• Sales and Profits quoted include BBC Worldwide's share of joint ventures
• At the end of 2004/05, John Smith, Acting CEO since July 2004 consequent upon the resignation of Rupert Gavin, was confirmed in this post. John Smith is also the Chief Operating Officer of the BBC
• Full Report and Financial Statements for the year ended 31 March 2005 may be obtained from Companies House from 30 June 2005
• The BBC's own Annual Report and Accounts, published in July, will contain full plc-level disclosures about all the BBC's operations, including BBC Worldwide
• The BBC's Commercial Review carried out in autumn 2004 examined all the BBC's commercial operations in terms of their scope, ownership model and ability to drive maximum value from commercial rights and assets back to the licence fee payer. It concluded that the BBC should retain ownership of businesses that exploited and exported content. However, these businesses should be run for profit first and foremost, within the context of Fair Trading and adherence to BBC values. The majority of BBC Worldwide's operations fell into this category and the company is being retained by the BBC for the long term. The remit of the Magazines business was also clarified so that in the UK in future it will focus on titles linked to BBC programme brands or genres in which the BBC has a recognised expertise

 

Highlights for BBC Worldwide 2004/05 by business:

• Channels : BBC Worldwide is the UK's number one international TV broadcaster with a portfolio of 19 wholly owned and joint venture channels, available in over 320 million homes around the world. Sales were up year on year from £122.2m to £140.6m. Profit increased from £2.7m to £4.0m, including a £2.1m dividend from UKTV (joint venture with Flextech Television, the content division of Telewest Communications plc) for the first time. Established channels BBC Prime and BBC America also made a profit. The strategic priorities for the Channels business are to deliver higher profits and expand the portfolio

 

• TV Sales: BBC Worldwide is Europe's biggest exporter of TV programmes with nearly 50% of the total UK TV export business ( BTDA 2004). Sales were up from £167.7m to £171m. Profits increased from £23.2m to £31.7m. Relationships with independent production companies continued to flourish and, following the new Terms of Trade, output deals with key independents were struck, including with Endemol UK and Hat Trick Productions. During the year BBC Worldwide acquired the rights to distribute ITV-commissioned and Channel 4-commissioned programmes made by independent production companies for the first time. In the future the business aims to become the distributor of choice for UK programme producers

 

• Magazines: BBC Magazines is the UK's third largest consumer magazine publisher. One in four of adults in the UK reads a BBC magazine every month. They reach almost one in three influential ABC1s every month (5.6 million) (TGI - Oct-Sep 04) and two in three parents of children aged 0-4 with our pre-school magazines (TGI - Oct-Sep 04/BMRB Omnibus Survey 2004) with the top six selling pre-school titles (ABC ending Dec 04). Sales were up from £146.1m to £169.4m. Profits were up from £16.2m to £22m. Circulation for BBC titles overall (Jan-Dec 04) rose 8% year on year. A joint venture with Times of India's magazine subsidiary was formed to provide a base from which BBC titles can be launched in India. Eight new international editions of BBC Top Gear were licensed, and future growth in overseas activities is expected

 

• Home Entertainment:
  DVD/video: In September 2004 a joint venture was formed with Woolworth's Group plc subsidiary VCI. The new company - 2 entertain - is the UK's sixth largest DVD/video distributor and the biggest UK-owned DVD/video publisher. DVD/video sales were up from £81.6m to £101m year on year (10 months' trading). Strong underlying performance is not shown in the bottom line yet because of the short year and costs associated with forming the jv (profits down from £19.7m in 2003/04 to £13m 2004/05). Top-selling title was Little Britain series 1 with unit sales reaching an amazing 1.3 million. Other major titles included Michael Palin's Himalaya and That Peter Kay Thing
  
  Audiobooks: BBC Audiobooks' sales were healthy at £24.6m although down on 2003/04 as no new Harry Potter title was published in the year. It was named SWPA Audiobook Publisher of the Year and remains the leading audiobook publisher in the UK
  
  Books: After a difficult year in 2003/04, BBC Books undertook a major restructure in 2004/05 and re-focused its list on strong TV tie-in titles. These actions resulted in losses reducing from £8.9m to £3.1m. Sales were stable year on year at £20m. The business expects to be in profit again by 2005/06. Partnership options will be explored during 2005/06
  
  Learning: Comprising academic, consumer, interactive and corporate training activities, this business currently lacks scale and BBC Worldwide is exploring partnering opportunities to enable growth

 

• Children's: this genre-based business operates in a hit-driven and highly competitive market and has incurred losses in recent years. Restructuring, cost-cutting and a more selective approach to investment has resulted in those losses being reduced in 2004/05. The business expects to be back in profit by 2005/06. Classic brands such as Teletubbies, Tweenies and Fimbles continued to maintain their appeal. Key investments in new properties this year included Charlie and Lola (produced by Tiger Aspect), The Secret Show (Collingwood O'Hare Entertainment) and The Tale of Jack Frost (Jack Frost Productions)

 

• New Media: This business brings together a range of activities where new media developments are playing a critical role in the delivery of content to consumers. Currently loss-making, the group has a number of initiatives in train to turn this around. Two of the units in the business do not fit with the new strategy for BBC Worldwide – Broadcasting Data Services and Audiocall. BDS has just been sold to BBC Broadcast Ltd and Audiocall is being assessed for potential sale or partnership

 

 

Top-sellers for BBC Worldwide in 2004/05:

 

TV sales - top ten titles from front catalogue

The Weakest Link - format

Spooks

D-Day

Great Britons - format

Cutting It

Top Gear

Inspector Lynley Mysteries

Space Odyssey - Voyage to the Planets

Supervolcano

Deep Blue – the movie

 

Books – top five by volume (Nielsen Bookscan)

Grumpy Old Men (150,000)

British Isles: A Natural History (143,000)

Who Do You Think You Are? (112,000)

Francesco's Venice (70,000)

Ainsley Harriott's Friends and Family Cookbook (58,000)

DVD/Video – top five by volume (UK Charts Co.)

Little Britain Series 1 (1.3m)

The Office Christmas Specials (222,000)

Red Dwarf IV (130,000)

Red Dwarf V (110,000)

The Office Complete Second Series (80,000)

 

Audio – top five by volume (Nielsen Bookscan)

Little Britain Complete Radio Series 1 (13,300)

Hitchhiker's Guide to the Galaxy: Tertiary Phase (12,800)

Little Britain Complete Radio Series 2 (10,200)

Little Britain; compilation of series 1 and 2 (10,100)

The Lighthouse Keeper Stories (9,100)

 

 

You can view an online version of the 2004/05 review on the BBC Worldwide site.

 

BBC WORLDWIDE