Jetix Europe has seen its revenue for the six months ending March 31st decrease by E16.5 million to E71.2 million, in line with the management's expectations.
The decline is primarily due to changes in a limited number of specific deals, notably with channel distributors.
Operating profit fell by E5.7 million to E11.2 million, with reductions in marketing, selling and distribution costs, and amortisation costs limiting the impact from reduced revenue.
Operating cash flow increased by E9.5 million to E30.3 million. Advertising revenue also grew by E2.0 million to E22.7 million, with growth in most markets.
Paul Taylor, CEO at Jetix Europe, said: "As expected, we have seen the impact from a number of specific deals reflected in the financial results we are announcing today. However, excluding adverse exchange rate movements, the results are broadly in line with our expectations.
"Although we have been affected by the renegotiation of specific channel carriage deals and the decision not to continue producing A.T.O.M, most of our underlying businesses have continued to perform well.
"We have increased our advertising revenue, despite a worsening economic environment and continued stiff competition, we are investing in our websites in advance of a relaunch planned for summer 2008 and we have seen our in-house merchandising activities continue to grow."
Taylor said that the company is in the final stages of negotiating a "major" new initiative with its parent company, Walt Disney. It is also working with Disney to develop up to two new live action shows, to be delivered in the next fiscal year.
The first co-productions to be commissioned by Jetix's new programming team will be Jimmy Two Shoes and Kid vs Kat, increasing Jetix's focus on character driven comedies and help to broaden its audience appeal.
"There is no doubt that our business faces a number of challenges, such as pay television consolidation, strong competition and a declining economic outlook," continued Taylor. "However the actions we are taking to ensure we have the best content possible, to leverage our relationship with Disney and to develop new businesses as technology allows, should enable us to return to growth as quickly as possible."