Bottom Line: Switching off

THE market's initial reaction to news of Carlton's interim profits was as hammy as some of the programmes the group has brought to our television screens.

The shares closed 22p down, but during the day had dropped 5 per cent in a melodramatic display of disappointment.

Some analysts had expected faster cost savings from the Central acquisition. There had also been much excitement about developments such as Carlton's involvement in the BT video-on-demand trial, tempered now by the realisation that this is a hot prospect only in the long term.

Meanwhile, Carlton's non- broadcasting businesses are likely to deliver respectable earnings growth for the next two years.

The value of its relationships for video production with studios such as Disney and Warner should not be underestimated.

The City's drama queens took the share price up to a peak of 1,029p in January. With full-year profits likely to be around pounds 173m, rising to pounds 224m in 1994/5, the forward multiple of 19 should be more acceptable to sober suits.