ITV Posts 6-Percent Rise in Pre-Tax Profits

LONDON: ITV reported profit before tax of £348 million, which is up 6 percent year-on-year and led by double-digit growth in revenues from production and digital.

Total earnings were £2.2 billion, a gain of 3 percent from the prior year. Revenue from ITV’s broadcast and online segment was £1.83 billion, up 1 percent. Ad revenues were flat at £1.51 billion. Online, pay and interactive revenues increased 26 percent year on year to £102 million.

ITV Studios delivered revenue of £712 million, which is 16-percent above the previous year. This is led by 100 new commissions and the number of re-commissions growing from 101 to 108. Adjusted profit before tax was up 17 percent to £464 million.

Adam Crozier, ITV’s chief executive, said: “We’re now almost three years into our Transformation Plan and our strong performance is delivering growth right across ITV, enabling us to build a stronger and more balanced business.

“In 2012 we achieved double digit earnings growth for the third year running, in a broadly flat advertising market. We now have non-advertising revenues of more than £1 billion, an increase of £114 million or 12 percent year on year, fueled by a strong performance in ITV Studios and our online, pay and interactive business.

“Our Broadcast & Online business is robust and growing, with profits up 9 percent to £413 million, and our audience is in high demand from advertisers. Although ITV family share of viewing fell by 3 percent due to the unprecedented number of major one-off events, we do not expect it to impact our ad performance in 2013 and the advertising deals we have secured support this view.

“We’re investing in online, pay and interactive, which are now a material and rapidly growing part of ITV with revenues increasing by 26 percent to £102 million—and more than doubling over the last three years. We’re positioning ourselves to take advantage of the opportunities arising from the increasing number of platforms needing high quality content and from changes in consumer behavior, in particular the surge in mobile viewing.

“A key part of the Transformation Plan is building an international content business. ITV Studios achieved strong organic growth both in the U.K. and overseas, with revenues up by £100 million to £712 million, driven by our ongoing investment in creative talent and developing new programs. We’re now building on our healthy creative pipeline with selective acquisitions in key and emerging creative markets.

“We have an increasingly robust balance sheet and strong cash flows which can support the investments required to deliver our growth strategy and future shareholder returns. Our continued focus on cash and costs has led to net cash of more than £200m at the year end.

“The Board has proposed a final dividend of 1.8p, bringing the total for 2012 to 2.6p, as well as a special dividend worth £156m, balancing the need for continued investment with financial discipline.

“Over the last three years we have consistently grown our revenues, delivered double digit earnings growth and converted that earnings growth to cash to strengthen our financial position. During that time we have increased our profits by 157 percent to £520 million, our adjusted EPS by 411 percent to 9.2p and we have improved our cash position by over £800 million. This encouraging progress has been driven by a strong performance in broadcast, increasing strength in online, pay and interactive, and a real step change in the creative capability and output of our ITV Studios content business. While there is still much to do this is clear evidence that ITV is transforming into a more robust, efficient and balanced company.”