UPDATE 2-UTV Media outperforms market due to radio, Web

(Adds CEO interview, shares, analyst comment)

By Rosalba O'Brien and Georgina Prodhan

LONDON, Aug 26 (Reuters) - Northern Irish broadcaster UTV Media (UTV.L) posted a 12 percent rise in first-half pretax profit before exceptional items due to its non-TV businesses, and said it should outperform the sector this quarter.

Operating profit from other businesses, in particular radio and Internet, rose 32 percent, more than compensating for a 15 percent decline in television operating profit amid a steep drop in TV advertising revenue in Britain as the economy slows.

UTV, which operates the franchise of Britain's ITV (ITV.L) in Northern Ireland, has benefited from the acquisition of radio stations in recent years, often buying several in a single urban area to create an attractive proposition for advertisers.

Chief Executive John McCann said on Tuesday the company would remain alert to opportunities but would be cautious about splashing out after a recent rights issue and currently had no acquisitions on its agenda.

"I think it's good to conserve cash at times like these," he told Reuters by telephone. "That's not to say if we saw a fantastic opportunity, we wouldn't take it to our shareholders."

Share in UTV rose 0.9 percent to 140 pence by 0935 GMT, outperforming a 0.6 percent slide in the DJ Stoxx European media index .SXMP.

Numis called the results "encouraging", saying the company had beaten its expectations, and kept its "Buy" recommendation.

It also said it was pleased to note the interim dividend of 3.3 pence, down from 5.2 pence a year earlier, which it said indicated a full-year dividend of around 8.5 pence based on previous splits, and a yield above 6 percent.

UTV's group pretax profit for the first half was 10.4 million pounds ($19.2 million) before one-off costs on sales up 8 percent to 62 million pounds.

Television advertising revenue fell 4 percent to 18.3 million pounds and the company said it expected a further fall of 5 percent this quarter, compared with a 13 percent expected drop for ITV and a decline of 9 percent for the wider industry. (Editing by Will Waterman and Erica Billingham)