ITV rebuilds profits but warns of long road ahead

Profits at ITV almost tripled in 2010 as the advertising market rebounded, and chief executive Adam Crozier said yesterday that his plan to overhaul the group was "gathering momentum".

The broadcaster said the World Cup, as well as hit shows such as The X Factor and Downton Abbey, had helped it to outperform an advertising market that was in recovery mode last year.

Mr Crozier also gave a status report on the first 12 months of the five-year transformation plan he drew up with chairman Archie Norman, saying it had already delivered "a sound financial platform for the challenges ahead".

ITV's pre-tax profits beat analyst expectations, rising from £108m in 2009 to £321m last year, as revenues rose by a tenth to £2bn. Analysts were alsoimpressed that the group slashed net debt from £612m at the end of 2009 to £188m, with ITV announcing itsdividend will be restored at the interim results in July.

Nick Bell, an analyst at Jefferies, said ITV had benefited from the "tailwinds of a remarkably strong recovery in advertising as well as a number of regulatory initiatives". These include the introduction of product placement and the House of Lords recommendation that the "contract rights renewal" rules, which govern how ITV charges foradvertising, are lifted. A lower tax charge and cost-cutting also helped.

Mr Crozier said: "We're still in the first phase of our transformation and making good progress, with a realmomentum for change being built up within ITV. We have a new, talented top team in place and around a third of the wider leadership team has changed over the last few months."

ITV's chief executive said the company was in phase one of a three-stage transformation programme, but that it has met its targets so far. Mr Crozier cautioned that while the recovery in television advertising was helpful, "it also serves to remind us just how volatile this market can be".

ITV said that despite a strong first quarter for the advertising market this year, there were signs it was slowing down and may turn negative by June because of the World Cup effect. The plan is to make the broadcaster lessreliant on advertising, through investment in its technology and online business, pay-TV and the "creative renewal" of its production arm.

Mr Crozier decided against selling ITV Studios after his review of the business last year. But its profits fell £10m in 2010 to £81m, which the group said "emphasised the need for creative renewal already identified".

Mr Crozier added: "We remain committed to our strategy of creating great content, delivering and exploiting it across multiple platforms and selling it internationally." The studio confirmed its network programming budget was about £800m this year.

The company also admitted the performance remained "subscale" at its online operation despite unique users rising to 10.2 million from 8.7 million. "With the arrival of the new team we are focused on fixing itv.com, investing in both technology and ease of use, and on driving up our commercial performance online," Mr Crozier said.

Following the disposal of Friends Reunited, sold at a big loss in 2009, online revenues fell from £37m to £28m. "The company still has to map out its digital media strategy," Mr Bell said.

ITV has begun to adapt to the significant shifts in the media industry, Mr Crozier said, as the audience fragments with the proliferation of digital channels, the rise of pay-TV and viewing over the internet. "We have made some real progress in driving change throughout the organisation, but we are only at the start of the journey."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Life and Style
Suited and booted in the Lanvin show at the Paris menswear collections
fashionParis Fashion Week
Arts and Entertainment
Kara Tointon and Jeremy Piven star in Mr Selfridge
tvActress Kara Tointon on what to expect from Series 3
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
News
An asteroid is set to pass so close to Earth it will be visible with binoculars
news
Arts and Entertainment
Benedict Cumberbatch has spoken about the lack of opportunities for black British actors in the UK
film
News
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project