Downton trumps the downturn as rise in optimism boosts ITV
Wednesday 31 July 2013
ITV's chief executive Adam Crozier hiked the dividend almost 40 per cent and reported that advertisers are feeling "more confidence and positivity" about the UK economy yesterday, sending shares in the broadcaster up 6 per cent to a record high.
"The fear of the downside has largely diluted," declared Mr Crozier, who suggested optimism is at its highest level since 2007, based on talking to around 100 chief executives and marketing directors at different companies in the last three months.
Ad revenues at Britain's largest free-to-air commercial broadcaster, home to Downton Abbey and X Factor, should be up 9 per cent in the third quarter. Supermarket, car, telecoms and pharmaceutical companies, along with the Government, have been among the biggest advertisers.
Mr Crozier said the ad market is "the mirror image" of last year when ITV had a strong second quarter and a weak third quarter because of the Olympics on the BBC. Over the first nine months of this year, ITV's ad revenues will be flat.
His optimism for the rest of 2013 could be seen as a good indicator for the wider economy, though he said his "caveat" was that growing confidence among advertisers has not yet "turned into behaviour" in some cases.
Mr Crozier was able to hike the half-year dividend 38 per cent to 1.1p after another strong performance outside advertising in the first six months. Pre-tax profits rose 11 per cent to £179m, with turnover up 1 per cent at £1.14bn.
His policy of buying up independent production companies such as Graham Norton's So Television and Big Talk, maker of the BBC's Rev and Channel 4's Friday Night Dinner, and selling more shows and formats to other broadcasters in the UK and overseas, is continuing to pay off. Revenues from the programme-making arm ITV Studios jumped 11 per cent and other areas such as gaming and online were up 19 per cent.
Mr Crozier has been experimenting with an online pay policy, making shows such as the drama Scott & Bailey available first behind a paywall. Prices are typically 99p per episode.
He was upbeat about the chances of ITV retaining its Champions League football rights as he said Uefa, the organiser of the tournament, still wanted some free-to-air exposure, even though Sky and BT are likely to engage in a fierce battle over pay-TV coverage. ITV shares jumped 9.9p to 167p.
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