ITV profits surge after ad revenue boost
Broadcasting giant ITV reported a near trebling in annual profits today as it benefited from a bounce-back in advertising revenues and hit shows such as Downton Abbey and The X Factor.
The group posted underlying pre-tax profits of £321 million for 2010, up from £108 million in 2009, and said it outperformed a resurgent television advertising market.
It hailed a successful World Cup as well as a strong line-up of programmes, particularly in the final quarter, with Downton Abbey drawing an audience of more than 10 million for its final episode.
But ITV1's share of viewing dropped in 2010 despite the autumn boost and ITV gave a cautious outlook for the year ahead as it fears the impact of tough comparatives and an uncertain wider economy.
ITV reported net advertising revenues for its core broadcasting and online business up 16% to £1.5 billion in 2010 and said growth continued into the new year.
The figure for the first quarter of 2011 is expected to be up 12%, with April set for a rise of between 8% and 12%.
But chief executive Adam Crozier, who joined ITV from Royal Mail last April, said: "The comparatives we face are becoming increasingly tough.
"The outlook into the rest of 2011 remains uncertain and we are cautious about the broader economic outlook and its impact on our market."
ITV is less than a year into a five-year recovery plan as it rebounds from losses in 2008 when the recession caused one of the worst slumps in advertising revenues in living memory.
Mr Crozier said there was still a "great deal to do" in reviving the business and he said he would concentrate on self-help measures, such as continuing to slash costs - by another £15 million this year - and investing in programming.
The group confirmed an ITV1 network programme budget of around £800 million in 2011, which is down on the £820 million in 2010 due to the expense of the World Cup coverage.
Talent shows will feature large in its 2011 line-up again, with new series of Britain's Got Talent and The X Factor due in the spring and autumn respectively.
ITV admitted its fledgling breakfast show Daybreak had not performed well since its launch last year to replace GMTV, but pledged to keep investing in the programme and said it had seen improvements in recent months.
ITV is also set to focus on itv.com, which it said was "currently not fit for purpose". Plans include launching a pay player and new online news proposition.
It looks very much as though 2015 will be a good year for the world economy, after all – and, if it is, that will be thanks to the fall in the oil price. It won't be good for everyone and we have already seen the pressure it puts on the Russian leadership – though, before you conclude that sometimes there is natural justice in the world, remember that the people who are hurt are not leaders such as Vladimir Putin. Other oil- and gas-exporting countries are damaged, too, and I think we will see further fallout in unpredictable ways. But the net impact is strongly positive, more so than most commentators at present acknowledge. The winners far outnumber the losers.
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