In a notable financial turnaround, RT's commercial arm has reported a substantial increase in profits, more than doubling to 11.44 million in the last year. This significant surge is largely attributed to the successful negotiation and implementation of digital distribution deals for its TV shows.
The new accounts for RT Commercial Enterprises DAC reveal that pre-tax profits surged by 106%, an increase of around 6 million, from the previous year. This growth is underpinned by a 16% rise in revenues, which climbed from 16.6 million to 19.28 million. The increase in revenues was complemented by a 28% decrease in operating costs, dropping from 11.4 million to 8.2 million.
Key Drivers of Profit Growth
One of the primary drivers of this profit growth was the revenue generated from digital distribution deals. Shows like the gangland crime drama Kin , which became one of the most-watched programmes on the BBC iPlayer, and the popular crime drama Love/Hate , which was acquired by ITVs streaming service ITVX, played a crucial role in boosting RT's profits.
Additionally, RT benefited from its joint venture with the Gaelic Athletic Association (GAA) through the GAAGO platform. The profit share from GAAGO increased by 18% to 381,000, reflecting a doubling of GAAGO revenues from 2.4 million to 5.06 million in 2023.
Cost Savings and Operational Efficiency
The reduction in operating costs was another significant factor contributing to the profit increase. Notably, the costs associated with the production of Toy Show, The Musical , which incurred a loss of 2.2 million in 2022, were not recurring in 2023. This non-recurring expense had previously impacted the financial performance of RT's commercial arm.
Other cost savings included a decrease in pay to contractors from 638,000 to 97,000 and a reduction in employee costs from 2.74 million to 2.1 million. The number of employees in commercial, merchandising, and editorial/content production roles also decreased by two to 25.
Financial Overview and Future Outlook
At the end of December last year, RT's accumulated profits totalled 125 million, with cash funds increasing significantly from 1.9 million to 6.6 million. These financial metrics indicate a strong financial position for the commercial arm of RT.
The directors of RT Commercial Enterprises DAC have expressed their intention to continue developing the company and are actively exploring new business opportunities. This proactive approach is expected to further enhance the financial performance and market presence of RT's commercial arm in the future.
For more detailed insights into the financial performance of media companies and their strategies, you can refer to the concept of media conglomerates and how they manage their commercial arms.
