Broadcasting Corp, trading poorly

Press, 11 September 1986, Page 30

Broadcasting Corp, trading poorly

PA Wellington The Broadcasting Corporation’s trading position is “less than satisfactory” and is likely to deteriorate as it tries to bring equipment and facilities up to date, according to its annual report. The report, tabled in Parliament on Tuesday, was for the year to last March 31 and was written before the television licence fee was increased last month from $45 to $65, excluding GST for a colour set. But the report acknowledged the prospect of a fee rise, and the corporation said when the increase was announced that this was far below the amount wanted. The report said an ambitious range of services was provided on little capital and income, and it

had felt this pressure “most acutely” during the year. The corporation’s operating surplus, before interest, fell from $19.16 million in 1984-85 to $14.92 million. Most of last year’s surplus was provided by the introduction of television advertising on a sixth day each week. The net surplus, with interest and profits on the sales of fixed assets, was $23.14 million, compared with $24.08 million the year before. The number of television licences, meanwhile, fell for the first time from 947,000 to 931,000, with net income from fees falling $522,000 to $35.58 million. “Once again, the apparently strong financial performance of the corpora-

tion as reported in its end-of-year surplus has concealed a less than satisfactory trading position,” the report said. “Forward projections for expenditure, revenue, and consequential cashflow show a deteriorating position for several years.” This was mainly because of the determination to bring equipment and facilities up to date, while meeting the main programming tasks, but there was “no sustainable alternative which would not lead to a rapid rundown in services.” The report said that if a commercial private television channel were established during the next few years it would inevitably cut the Broadcasting Corporation’s major expenditure and activity.