4 Ventures ongoing operations recorded a combined profit before tax of £4.1 million (2002: loss of £17.7 million)
	Turnover increased by 12% to £138.8 million (2002: £123.9 million)
	4 Ventures contribution to Channel 4's overall revenue increased to 18% (2002: 16%)
	Channel 4's exit from attheraces is imminent and its investment in the business is now capped
	Losses in FilmFour Ltd reduced from £28.7 million in 2002 to £3.7 million in 2003 and we expect to report a small profit in 2004
	A key objective for 2004 is to achieve profitability across all four 4 Ventures divisions
	2004 financial target of increasing profits to £10 million +
	Launch of More4 in early 2005

Rob Woodward, Commercial Director of Channel 4 said:

"4 Ventures has performed strongly throughout 2003. The ongoing businesses recorded a profit in aggregate of £4.1 million and the focus for 2004 will be on doubling profits and further increasing our revenue contribution to the main Channel."

"4 Ventures is pivotal to the future of Channel 4 and our close relationship with the main Channel has had a positive effect on the performance of the business. We are pleased with progress to date and look ahead to 2004 with confidence."

Anmar Kawash, Managing Director of 4 Ventures said:

"In 2003 our key objective was to make 4 Ventures ongoing businesses more profitable and ensure the right management team was in place to build the businesses going forward. This has been achieved and we look forward to continuing to report strong growth in 2004 and beyond."

Full Statement by Rob Woodward Commercial Director,
Channel 4

"2003 was a breakthrough year for 4 Ventures. The business performed strongly and all the objectives set out at the start of 2003 have been achieved. For the first time 4 Ventures ongoing businesses recorded a combined profit before tax of £4.1 million (2002: £17.7 million loss) and all four divisions remain ahead of target. Our relationship with the core channel has been strengthened and revenues for the year increased by 12% to £138.8 million (2002: £123.9 million).

A key goal in 2003 was to strengthen 4 Ventures ongoing businesses ensuring a sound structure and strong management team were in place to grow each division going forward. A consequence of this deliberate focus on consolidation was a slight reduction in the rate of revenue growth. However, we begin 2004 with a solid group of businesses well placed for growth and increasing revenues is a key management focus for the year.

To support the ongoing organic growth of 4 Ventures a corporate development team has been put in place to actively identify strategic investment opportunities that complement and leverage Channel 4's existing brands. Strict investment criteria have been developed and signed off by the Channel 4 Board and access to capital has been agreed. Progress to date has been positive and a number of opportunities are being examined - we look forward to making further announcements in the near future.

4 Ventures relationship with Channel 4 remains a key driver of growth and critical to our success going forward. Proactive measures have been put in place to ensure closer working relationships with all aspects of the main channel, especially with the commissioning teams. By enhancing these relationships we can identify new ways of increasing the revenues of 4 Ventures at the same time as strengthening Channel 4's relationship with its audience. Good examples of this include the launch of E4+1 and the recent launch of Teletext on 4 across the Sky platform.

During 2003 a new Code of Practice was negotiated with the Independent Production sector which became effective on the 6th of January 2004. For the first time Independent Producers are able to retain rights in their programmes unless explicitly sold to Channel 4, representing a potential risk to the 4 Rights business model. However, these revised terms provide an opportunity as well as a threat. Whilst 4 Rights will lose access to some secondary, tertiary and international rights the Code of Practice enables it to negotiate rights from Independents working for other broadcasters including the BBC, Five and ITV. We have already achieved success in this area and have become a preferred supplier for Five. Going forward we remain confident in the 4 Rights business and believe its strong track record and the quality of its service leaves it well placed to succeed in the new environment.

In 2004 our focus will be to achieve profitability across all four divisions as well as further increasing our revenue contribution to the main Channel. We expect to double profits and contribute £10 million to the main Channel. We are actively looking to invest in existing businesses and new growth opportunities to support the organic growth of 4 Ventures and will be launching More4, a new free to air channel, in early 2005. We are pleased with progress to date and look ahead to 2004 with confidence."
Rob Woodward 15th April 2004

Review of Operations

Performance
4 Ventures ongoing businesses were profitable in aggregate for the first time recording a profit before tax of £4.1 million (2002: £17.7 million loss). All the individual businesses are ahead of target and a key objective going forward is to ensure they all reach profitability in 2004 in order to further increase our revenue contribution to the main channel. In 2004 our key financial target is to more than double existing profits and make a contribution of at least £10 million to the main channel.

Turnover
The turnover for 4 Ventures existing businesses increased year on year by 12% to £138.8 million (2002: £123.9 million).

4 Channels The 4 Channels division, made up of the five E4 and FilmFour channels, had another successful year. E4 + 1 was launched and helped deliver an increase in advertising sales and sponsorship of 52%. E4 Channels losses declined by 68% to £5.1 million (2002: £16.1 million loss) and revenues increased by 34% to £56.9m. E4 remains the second most watched digital channel amongst 16-34 year olds and the successful launch of E4+1 grew the total E4 share of 16-34 year olds by 25% against a target of 12%.
FilmFour channels losses declined by 60% to £2.7 million (2002: £6.7 million loss) and revenues increased by 12% to £13.9 million. The structure of the FilmFour channels was reviewed, with FilmFour World and FilmFour Extreme being replaced by FilmFour Weekly, contributing to the 11% increase in viewing. FilmFour channels remains on target to breakeven in 2005 and it remains the largest non-Sky premium subscription service.

4 Rights 4 Rights increased profits by 7% to £11.7 million (2002: £10.9 million). Revenues decreased by 10% to £33.3 million (2002: £36.9 million) due in part to difficult market conditions. A major two-year co-production and first-look deal agreed with Discovery for secondary rights to Channel 4's factual programming in the UK will drive further growth in 2003 and beyond and ensure significant value can be returned to the independent production sector from this programming. 4 Rights has had a positive start to 2004 signing a prestigious deal with HBO for the international distribution rights (excluding the USA and the UK) to over 250 hours of documentary programming.

4 Learning 4 Learning recorded a profit of £1.4 million and recorded a slight increase in revenues to £21.4 million (2002: £20.9 million). The business continued to produce acclaimed programming and drama such as Twelfth Night and Illustrated Mum. 4 Learning also successfully launched TexTips mobile services which attracted 25,000 daily users and in its first year generated a small profit of £0.25 million.

4 Services 4 Services recorded a profit of £1.5 million (2002: £3.5 million loss) driven largely by the 4 Interactive business which moved from a £3.6 million loss in 2002 to £1.2 million profit in 2003. Divisional revenues increased by 16% to £19.4 million (2002: £16.7 million) whilst revenues for 4 Interactive grew by 22% to £12.7 million (2002: £10.4 million). 4creative consolidated its reputation as an industry leader in sponsorship credits working for large external brands such as O2, Direct Line and Allied Domec. It also ran its first major external advertising campaign with New Look's launch of its flagship Oxford Street store.

attheraces Channel 4 expects to announce its imminent exit from attheraces. Its losses for the year were £10.5 million (2002: £9.9 million loss) which represents the limit of its investment in the business. We are in the process of negotiating for the continued terrestrial broadcasting rights to UIK horseracing and are close to signing an agreement. We are working on the launch of a new interactive betting platform on the terrestrial channel and hope to make an announcement in the next few weeks.

FilmFour Ltd In 2003 losses in FilmFour were £3.7 million (2002: £28.7 million loss). Run off of FilmFour continues and all future film financing activities have been transferred back into the main channel. Channel 4 remains committed to investing in British film production and has a £10 million annual budget for this purpose. To strengthen this commitment Channel 4 has appointed Tessa Ross as Head of FilmFour and a key focus in 2004 will be its greater alignment with the core channel.