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
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
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: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness