Resurgent ITV quashes talk of takeover approach

Broadcaster pays special dividend of £156m after its profits soar for a third year

ITV has rewarded investors with a £156m special dividend after a third year of rising profits, capping a major turnaround, but the broadcaster disappointed some in the City by saying it had received no takeover approach.

Pre-tax profits jumped 6 per cent to £348m, with turnover up 3 per cent to £2.2bn, thanks to a record performance from its programme-making arm, ITV Studios.

ITV's shares have soared in recent months on the strength of bid speculation, fuelled by the United States cable operator Liberty Global's $23.3bn (£15.4bn) bid for the pay-TV firm Virgin Media. However, Adam Crozier, chief executive, quashed talk about ITV receiving any takeover approach, saying: "I'm supposed to say we never comment on stuff like that, but the answer is no."

The shares, which initially rose after this morning's results, fell after his comments, ending down 1.2p at 119p.

Mr Crozier has upped the annual dividend from 1.6p to 2.6p, as well as handing out the special divi, worth 4p a share. BSkyB, ITV's biggest shareholder with a 7.5 per cent stake, will be the biggest beneficiary, collecting about £19m. The payout marks a huge turnaround: ITV racked up a £2.7bn loss in 2008.

"We've had terrific growth at ITV Studios," Mr Crozier said, referring to how its revenues rose 16 per cent and profits surged by almost a third to more than £100m, helping to offset a tough advertising market. ITV Studios increased the number of shows it sold overseas by 47 per cent, with the mini-drama series Titanic being bought in 160 countries and the Edwardian drama Mr Selfridge being snapped up in 35 countries.

In contrast, ad revenues were flat at ITV's bigger broadcasting business, which operates its family of channels, including ITV2, ITV3 and ITV4. Mr Crozier blamed an "unprecedented number of major one-off events" such as the BBC's Olympics coverage.

Since he joined from Royal Mail in 2010, Mr Crozier has made the development of ITV studios a priority as he wanted to own more intellectual property and sell it, rather than buying in hits such as X Factor from other firms. He also wanted to reduce reliance on advertising.

The online, pay-TV and interactive division has also started to gain traction, with revenues up 26 per cent to £102m. Mr Crozier said digital revenues can be "highly profitable", with margins sometimes approaching 60 per cent.

ITV has a £200m surplus after Mr Crozier slashed net debt. He said all this demonstrates that his transformation plan is working, by making ITV a "more balanced business", after it did not pay a dividend between 2008 and 2011.

He expects sales at ITV Studios to grow this year after making acquisitions, including Graham Norton's firm So Television and other production companies in America, Israel and the Nordics. Advertising is up 5 per cent in the first quarter.

He said a dividend was better than a share buyback: "We wanted to reward all the shareholders equally and those who were staying with us rather than those who wanted to get out."

Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage