Restructured media group UBC grew sales 40% in the year to March as its switch away from disastrous digital radio work and return to content production continued.
Announcing a 36% reduction in annual losses to £445,000 and a move to break-even in the second half, finance director John Falcon acknowledged UBC had made a mistake with its earlier emphasis on digital radio. London-based UBC began its restructuring bout and drive to focus on content provision in 2007 with the sale of the Classic Gold network of stations to Global Radio for £4m, a move followed by the closure of digital speech station OneWord in 2008. Music downloading service Cliq was closed the same year, whilst February 2009 saw UBC selling its entire commercial division to the Global Traffic Network in a transaction bringing in £14.5m.
Today, UBC boasts two divisions: content creation and software and interactive. The content creation arm works with the BBC on its radio stations, something Falcon acknowledges ‘is not going to grow fast unless the coalition government makes them increase the number of programmes outsourced on the radio'. UBC also produces content for Radio 2, 3 and 4 and makes programmes such as the BBC Album Review and Jazz Library.
Meanwhile, UBC is also expanding further into online video production, having acquired Lynx Content, owner of the audio rights to titles including Douglas Adams’ ‘Hitchhikers Guide to the Galaxy’, for £2.4m in August. ‘Online video production’, enthuses Falcon, ‘is growing hugely and is the area we consider to be the most exciting in our business’.
With £8.4m cash and no debt, UBC now sports a strong balance sheet and looks to be slowly getting back on track. However, since the business is not forecast to generate pre-tax profits until 2011, we think it is still too early for investors to tune in. Avoid for the time being.