Boost for shares as Crozier leads ITV to bumper profits

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The Independent Online

ITV's shares today surged nearly 7 per cent to their highest level in almost a year as the Downton Abbey broadcaster managed to boost profits despite an almost flat advertising market.

Profits were up 14 per cent on a pre-tax basis at £327m last year – ahead of analysts' expectations. Revenues rose just 4 per cent to £2.14bn but ITV's balance sheet is in a much stronger position as its chief executive, Adam Crozier, has slashed net debt.

ITV is now cash-positive for the first time since the business was listed on stock market in 2004 and it has a cash surplus of £45m against £188m of net debt a year ago.

In a further sign of ITV's financial health, Mr Crozier announced a full-year dividend of 1.6p — the first time it has made a payout to shareholders since 2008.

"We've made good progress and we remain focused on rebalancing the business," said Mr Crozier, who acknowledged that the cash surplus meant he had firepower to make acquisitions. There has been persistent speculation that ITV could be interested in buying Endemol, the TV production firm behind Big Brother and Deal or No Deal.

He is also looking to expand ITV's programme-making business, ITV Studios, which makes shows such as Channel 4's Come Dine With Me and BBC3's White Van Man and sells hits overseas such as I'm A Celebrity.... External revenues at the studios arm rose 9 per cent to £320m, while new commmissions are up 28 per cent.

ITV still generates three-quarters of turnover from advertising, with national ad revenues up just 1 per cent last year, although Mr Crozier said that was ahead of the market.

Advertising in the first quarter of 2012 is down 2 per cent against tough comparisons and the ITV chief remains confident it can out-perform the market again.