Merman Television Ltd, the London-based production group co-founded by Irish actress and screenwriter Sharon Horgan, reported a net operating profit of £388,000 last year after making progress on a number of key productions.

Founded in 2007, Merman has produced Horgan's series Catastrophe and Divorce as well as programmes such as Aisling Bea's This Way Up, and Frank of Ireland, created by and starring Brian and Domhnall Gleeson.

Merman is also behind Bad Sisters, the Dublin-set dark comedy developed by and starring Horgan as one of five sisters plotting to murder their brother-in-law. The show's second series is now streaming on Apple TV+.

Production of the latest batch of eight episodes commenced last year, and Merman reported turnover of £26.3m for 2023, up from £23.1m in 2022.

Costs surged year-on-year from £22.9m to £30.9m for an annual gross loss of £4.5m compared to a £194,200 profit the previous year.

Administrative expenses of £2.5m resulted in the company making an operating loss of £7.1m prior to UK tax credits of £7.4m.

In the company's strategic report, the directors said they enjoyed a successful trading period in 2023 and that production and overhead costs remained under close control.

They added that Merman would continue to operate as a distinct company developing and producing programmes for major UK broadcasters and streaming platforms.

They warned, however, that broadcasters had started to "tighten their belts" and had become "extremely slow and hesitant to commission," spending less on programmes due to reduced expectations of advertising income, and waiting for full series rather than accepting episodes one by one.

The directors, including Horgan and co-founder Clelia Mountford, who has since left the company, said there was uncertainty about the long-term viability of the current commercial broadcast model, and that motivating talent to continue developing shows was also key concern.

They also noted that streamers are more interested in acquiring intellectual property rights, which may affect the company's distribution revenue, but they believe that the company has reduce exposure to business and financial risks due to the "variety" of its portfolio and the fact it has been commissioned by multiple broadcasters.

"The main change in the industry in recent times has been the digitalisation of viewing and strong impact of providers who are driving the future of the industry," they said.

"With traditional media concepts seeing reduced demand, the company has adapted to the streaming service business."

The filing show the value of Merman's profit and loss account fell year-on-year from £1.7m to £1.2m. The company paid £850,000 to Horgan's ex-husband Jeremy Rainbird for 3,000 shares in the firm last January.

The company listed current assets of £24.5m, including £8.8m in cash and £15.7m owed by its debtors, while owing £23.3m to its creditors in 2024, including an outstanding production loan of £8.6m.

Merman had 14 staff last year, down from 16 in 2022, and staff costs rose slightly to nearly £1.8m. The directors were paid £872,500, and the highest-paid of the directors received £265,100.

Bad Sisters is based on the Belgian series Clan, which didn't extend to a second season, and fans of the show may not be guaranteed a third series if Horgan doesn't see the story continuing.

"I always said to Apple, if I can't think of a good enough story, I'm not doing it," Horgan told Elle UK recently. "I was really interested in showing what happens next and great characters don't come along every day."

Merman has more programmes in production, though, and announced in May that it would produce Amandaland for the BBC, a spin-off of comedy series Motherland, which Horgan co-created.

The company has also produced Dreamland for Sky, horror comedy series Shining Vale starring Courteney Cox and Greg Kinnear, and the acclaimed feature film Herself.

Photo: Sharon Horgan attends a dinner hosted by British Vogue and Apple TV+ to celebrate leading women's voices in entertainment and fashion, at Pavilion Knightsbridge. (Pic: Max Cisotti/Dave Benett/Getty Images for British Vogue)