ITV Reports Ad Decline, Record Studios Results

Overall revenues at ITV slipped by 2 percent in 2023 as digital gains and record results at ITV Studios were offset by softness in the linear TV ad market.

ITV reported total group revenues of £4.26 billion ($5.45 billion), with an adjusted profit before tax of £396 million ($506.4 million).

“In 2023 we saw the benefit of the actions we have taken to reposition ITV towards higher sustainable growth,” said Carolyn McCall, chief executive. “Our studios business recorded the highest ever revenues and profits and in its first year, ITVX delivered strong growth in viewing and digital revenue with investment on plan. This growth in production and streaming substantially offset the challenging linear TV advertising market conditions.

“We remain confident in delivering our KPI targets, and are making good progress towards these—most notably, ITV Studios organic revenue growth of 5 percent on average per annum between 2021 and 2026 at a margin of 13 to 15 percent and to deliver at least £750 million of digital revenues by 2026.”

McCall noted that the current cost-savings plan has has delivered £130 million ($166.2 million) of annualized savings to date. “We are on track to deliver the full £150 million by 2025—one year early,” she said. “In addition, we are now in the early stages of a new strategic restructuring and efficiency program across the group to reshape the cost base, enhance profitability and support the growth drivers of studios and streaming. By the end of 2024, we expect the program to have delivered incremental annualized gross savings of at least £50 million per year, giving a £30 million in year gross benefit in 2024. The ongoing program is designed to deliver further material incremental savings over a number of years.”

McCall concluded: “2023 was the year of peak investment for streaming, which together with the successful execution of our strategy and the efficiencies delivered to date have made ITV more robust. ITV has a leading, scaled, global studios business, a high growth streaming service and a cash generative linear advertising business. This ensures that we are well placed to grow profits from here as we continue to drive material efficiencies, invest behind our strategic priorities and deliver returns to shareholders.”

At ITV Studios, revenues rose by 4 percent to £2.17 billion ($2.78 billion). Media and entertainment revenues fell by 7 percent to £2.09 billion ($2.67 billion) as ad revenues dropped by 8 percent. The company did report an improvement in digital revenues, of 19 percent, amid usage gains at ITVX.