ATV financial results: 1977
Lord Grade on Associated Television Corporation’s 1977 results
the International Group spanning TV, Theatres, Theatrical Costumiers, Films, Music Publishing, Records and Tapes, Property, Insurance, Ansafone and Merchandising
‘Pretax profits are up by 81% to all time record’
Review of the year
The results speak for themselves. The pre-tax profit figure is £11,161,000 [£32.3m in today’s money allowing for inflation – Ed], the highest in the year history of the company, and shows an increase of 81% over 1976.
The improvement in the Group Profit may be attributed in the main to two causes: first, to the resurgence in television advertising revenue and secondly, to the very substantial contribution made this year by the Corporation’s film division.
I can also confirm that all the main divisions within the Group are currently thriving and look well set for the future.
Directors
ATV Corporation
Mr. Jack Gill, C.B.E., already my Deputy Chairman, has, in addition, been appointed Deputy Chief Executive of the Corporation. Mr. Gill’s new designation thus gives public recognition to the part which he has played in building up ATV’s prosperity.
Mr. Norman Collins, who has held the position of Deputy Chairman from the inception of the Company, now gives up that post, but I am most happy to say he has agreed to remain a member of the Board.
I have been most happy, also, to appoint Mr. Louis Benjamin my other Deputy Chairman.
ATV Network
It is a condition of the franchise granted by the Independent Broadcasting Authority that 70 should be the maximum age for Directors of the licensed Companies.
Accordingly, while remaining Chairman and Chief Executive of Associated Television Corporation – the Group which embraces all the subsidiary activities – I shall be relinquishing my Chairmanship of the ATV Network Division of the Group on 1st October, 1977. I am delighted to say, however, that the Board of ATV Network has, with the full approval of the Authority, unanimously elected me to the post of President, and I am also fortunate in having Mr. Jack Gill, already my Deputy Chairman at ATV Network, ready to succeed me as Network Chairman.
Under the same age-rule of the Independent Broadcasting Authority, Mr. Norman Collins, a founder-member of the Company, will be retiring from the Network Board.
Transdiffusion analysis
Lew Grade did not share power well. A parade of men were made general manager, deputy managing director and other posts directly below him. This bright, ebullient man ran rings around them, cut them off at the knees and pushed them out. Jack Gill, previously head of finance, was to be no different. Louis Benjamin would not find his job comfortable either. Norman Collins, the first person Lew had pushed out of the way back in the 1950s, has hung on for dear life: ATV – the ITV company – was his idea and he had no intention of letting go. Nevertheless, he’s finally been demoted to somewhere completely out of the way.
The IBA was tired of Lew Grade. It had been tired of him for a long time, but now it was reaching levels of exhaustion. The retire-at-70 rule was designed purely to push him out of the hot seat at ATV, and he got round it by putting his otherwise emasculated deputy into the chair instead. At the same time, does Lew care about ATV Network any more? He’s now firmly a movie mogul, with a massive TV movie hit in Jesus of Nazareth and a big cinema hit, albeit to ‘warm’ rather than ‘rave’ reviews, in The Return of the Pink Panther.
Television
As a result of improved transmitter coverage, ATV Network now serves an area extending from Stoke on Trent in the north to Oxford in the south, and from Hereford in the west to Peterborough in the east.
Due to the upturn in television advertising revenue, the profit of ATV Network, before tax, was £4,281,000 [£23.9m] against £1,945,000 [£10.9m] for 1976.
The financial revival of ATV Network should be seen against the background of the results for the year 1974/75 when the profit before tax had dropped to £1,677,000 [£9.4m].
The urgent and necessary economies which were introduced were not, however, at any time allowed to impinge on direct expenditure upon programmes.
In the result, the high standards of the service were fully maintained, and the year saw the presentation of such notable programmes as the six-part “Moses The Lawgiver”, and the irresistible, 24-episode series “The Muppet Show” – 1977 winner of the Golden Rose of Montreux Award.
The Annan Report
The long-awaited Annan Report on the future of broadcasting has now been published and I must thank Lord Annan for his welcome acceptance of the basic principles of Independent Television.
I must, nevertheless, admit to being disappointed that the Committee did not see fit to recommend that the available – and at the moment, entirely unutilised – fourth Channel should be allocated to the IBA.
Film Production
In my last two annual statements, I have been careful to draw attention to the magnitude of borrowings necessary to finance large scale film production and the inevitable time-lag between outlay and reward.
That reward, in very considerable measure, is now beginning to accrue with a contribution of £2,908,000 [£16.2m] this year.
Zeffirelli’s majestic production of “Jesus of Nazareth” was first shown in this country on Palm Sunday, 3 April 1977. It achieved immediate success both at home and abroad. In Britain, the audiences amounted to 21 million viewers; in the USA to over 91 million and in Italy 84% of the viewing public saw the film.
I have no hesitation in saying that this film, representing ATV’s largest single film-production investment, will prove an asset of inestimable worth to the company and provide a valuable annuity over the years to come.
Among the Film Division’s other successful releases, “The Return of the Pink Panther” has proved particularly outstanding. Further investment in film production is currently being undertaken in the light of up-to-date practical experience of the international market.
The overseas interests of ATV have during the past decade been steadily expanding. In consequence, the Group is now a large-scale earner of foreign currency.
Theatres
The Stoll-Moss Theatre Group enjoyed a most satisfactory year. Included amongst its outstanding achievements are the record-breaking “A Chorus Line” at the Theatre Royal, Drury Lane, and the musical hit, “Ipi Tombi”, at Her Majesty’s Theatre.
Moreover, the Group’s Shaftesbury Avenue theatres – Queens, Globe, Lyric and Apollo – all showed to best advantage, with long-running performances by such of our leading actors as Sir Alec Guinness and Sir John Mills, and with the work of many award-winning dramatists.
The twelve months at the London Palladium proved equally stimulating and successful. The new international star policy launched with Frank Sinatra in 1975, brought before the public such artists as Sammy Davis Jnr., Julie Andrews, Bing Crosby and Shirley Maclaine on her triumphant return visit; and the box office demand became overwhelming.
Music Publishing, Records and Tapes
Music publishing produced record profits with an increase of 21% against the previous year and there is every indication that the current year should again make a major contribution to the Group’s finances.
The decision has been taken to start new companies in the major territories outside USA and Switzerland, where we already have our own music publishing subsidiaries. We have therefore acquired a controlling interest in Allo Music in France and investigations are proceeding with the object of establishing companies in Germany and Italy.
The results of the Pye Records Group show improvement over the previous year despite a non-recurrent setback in the company’s trading in the United States.
Among the Pye artists who won international acclaim were the Brotherhood of Man with their 1976 Eurovision Song Contest winner “Save Your Kisses For Me”, and Max Bygraves and Lena Martell both earned top places in the overseas Charts.
Other Activities
It is a remarkable achievement that Bentray Investments should have increased its profits by nearly 20% in a year which was a notably difficult one for property companies.
A complete re-organisation has been undertaken at Ansafone and the new range of equipment being offered shows every sign of being able to meet the steadily growing demand.
Bermans & Nathans, our theatrical costumiers, are now trading profitably.
The Marbarch Insurance group is steadily expanding its business overseas and the whole outlook is most promising.
ATV Licensing has most enterprisingly expanded its activities. In addition to the wide range of “Space 1999”, a forthcoming range based on “The Muppet Show” and our own long established “Rupert Bear” should ensure another good year.
Tribute to Staff
Thanks are due to all directors and staff of the Group’s companies at home and abroad for their staunch support throughout the year. The growth of ATV is something of which we can all feel justly proud.
Group results at a glance
Year to 27 March 1977
Turnover rose from £69.2 million [£386m] to £89.3 million [£498.7m] an increase of 29%. After paying an increased television levy of £6.03 million [£33.7m] against £2.73 million [£15.3m] in 1976, the profit before taxation was £11,161,000 [£62.3m] (1976 – £6,151,000 [£34.4m]). Taxation accounted £4.75 million [£26.5m] (£3.17 million [£17.7m]), leaving a profit after tax of £6.41 million [£35.8m] (1976 – £2.98 million [£16.6m]). Earnings per ‘A’ stock unit were 15.32p [85.49p], an increase of 118.5% over for last year.
An interim dividend of 2.275p [12.69p] per ‘A’ stock unit, together with a final dividend of 3.099p [17.29p] to be paid on 3 October, makes a total of 5.374p [29.99p] per ‘A’ stock unit – the maximum permitted.
After paying these dividends, the profit retained in the business amounted to £3.82 million [£21.3m].
About the author
As a public company with shareholders, ATV was required to publish a detailed Annual Report at the end of each financial year. It was common to also publish a Chairman's Statement, summing up the report in more readable language.
