The BBC's production services subsidiary BBC Resources has posted a year-on-year profit for the first time in its short history, writes Will Strauss.
Financial results released this week revealed that for the year ending 31 March 2003, the post-production, studios and outside broadcast facilities business made a post-tax operating profit of£5m (after restructuring costs were taken into consideration) on a turnover of£158m. Last year the company lost£6.3m on a turnover of£149m. The profit will help the company to reduce its accumulated losses to£12.8m. In its first three years of trading the division made regular losses, the worst being in 2001 when the company made an operating loss of£11.5m ( Broadcast, 6.7.01).
The increase in profit for last year is being put down to a great summer for the Acton-based outside broadcast department - thanks to one-off events such as the Commonwealth Games and the Queen's Jubilee - as well as the closure of loss-making businesses and a reduction in central costs that included gains from reduced staff levels. In the period, BBC Resources sold both BBC Media Arc and BBC Technology to BBC Broadcast and the BBC respectively. Despite the profit gains, directors decided not to pay a dividend to shareholders this year but money will be returned to the BBC for programme production as part of the commercial organisation's original remit.
The cuts made to operating costs were quite severe. More than 300 people were removed from the payroll, slashing the wage bill by£6.2m to£56.4m. BBC Resources now employs 1,092 people in operations, production, engineering and design plus a further 346 in administration - a significant reduction from the 6,000 people that worked for the company in 2000.
Not surprisingly, the majority of the work undertaken by BBC Resources departments during the year was completed for BBC programmes and/or BBC production departments. Non-BBC customers - such as Talkback and Chrysalis - made up only 12% (£20.2m) of the company's overall business and even then this figure includes work for shows completed for BBC channels. The biggest exception to the rule was seen in the costume department of the studios operation where around two-thirds of business came from external clients.
BBC Resources Ltd, founded in 1998, is part of BBC Ventures Group, the commercial holding company that also encompasses BBC Broadcast and BBC Technology. BBC Ventures Group made a profit of£14.5m last year. BBC post-production, part of BBC Resources, will open a new, dedicated facility for factual and learning programming later this year. No specific details were available as Broadcastwent to press.