57% growth $81 mil ahead of expectations
LONDON — Though hit by declining audiences for its core service ITV1, top Blighty commercial terrestrial broadcaster ITV confounded investors Wednesday by announcing bigger-than-expected profits.
Pretax profits surged 57% to £340 million ($612 million), some $81 million ahead of analysts’ forecasts.
ITV’s bullish CEO, Charles Allen, ascribed the impressive performance partly to a strong showing by the new digital channels. “ITV has had an outstanding year,” he said. “We have streamlined and improved our operations and delivered cost savings ahead of expectations.”
Revenues at ITV2, ITV3 and ITV News soared by 76% last year, while cost savings stripped out $216 million from the business following the merger between Granada and rival Carlton that created the unified ITV company 13 months ago.
Overall group revenues (including those at core channel ITV1, which was hit by falling audience share as auds switched to digital) increased 4.9% to $2.86 billion. Earnings rose 3% to $4 billion.
Allen hit out against reports that showed ITV1’s viewing figures were down 10% year on year in the first two months of 2005. “I want to nail that nonsense about ITV1,” he said. “You’re comparing two weeks this year with (viewing figures for last year’s) ‘I’m a Celebrity … Get Me Out of Here!’ which was the highest-rated show ever. You’ve got to make sure you’re comparing like with like.”
As part of Allen’s cost cutting, noncore assets have been sold, but ITV indicated that it did not plan to sell cinema advertising biz Carlton Screen Advertising and joint venture Screenvision.
Possibly up for sale is ITV’s 10% stake in Oz’s Seven Network, although its shareholding in U.K breakfast station GMTV, held jointly with Disney, is not on the block.