Fresh alert from Channel 5 owner

CHANNEL 5 owner RTL Group has issued a third profits warning, predicting full-year earnings would fall by up to 40%. The pan-European broadcaster also warned weak TV advertising would persist for the first half of next year.

RTL has now promised a clear-out of underperforming assets in an attempt to bolster its bottom line.

Profits for the year ended December were likely to fall 35-40% on last year's e555m (£328m), it said. That's before interest, tax and amortisation and one-off costs for restructuring and investments in new businesses.

RTL blamed a further deterioration in the market since September. It expected TV advertising in Britain, France and Germany to be down by up to 10% year-on-year. 'Visibility remains poor and it continues to be difficult to predict the outlook with any certainty,' the firm added. 'However, based on our forward bookings thus far, we expect that advertising in the first half of 2002 will show continued weakness.'

Restructuring would cost it e40m, with e28m invested in new business. 'We are continuing to review and implement cost control measures, and are performing a thorough review of our portfolio resulting in disposals or closure of non-core or under-performing assets,' said chief executive Didier Bellens. It was also reviewing its Polish operations.

The group, in which media group Pearson holds 22%, warned in July that full-year earnings would fall by between 10% and 15%. Days after the 11 September terrorist attacks, it warned the slide in earnings would be even sharper. RTL will report full-year results on 4 March 2002.