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ITV shareholders feel benefit of turnaround with special dividend

The channel saw a 39 per cent rise in pre-tax profits for 2014 to £605m.

 

Nick Goodway
Thursday 05 March 2015 01:25 GMT
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ITV’s share of the total TV audience had fallen by 5 per cent in 2014, reversing the gains it made in 2013.
ITV’s share of the total TV audience had fallen by 5 per cent in 2014, reversing the gains it made in 2013. (GETTY)

ITV shareholders were celebrating the fruits of chief executive Adam Crozier’s five-year growth plan yesterday as the Broadchurch and Downtown broadcaster announced a £250m special dividend.

At 6.25p a share that is more than the whole of the regular 4.7p dividend it also declared for last year, which in itself was a 34 per cent rise.

“We are now a high-growth company, demonstrably much stronger than when we set out our five-year plan,” Mr Crozier said, as he unveiled a 39 per cent rise in pre-tax profits for 2014 to £605m. “We still absolutely see opportunities for growth and we want to have that ability but at the same time we are throwing off cash and decided to return some to shareholders.”

Mr Crozier admitted he was disappointed that ITV’s share of the total TV audience had fallen by 5 per cent in 2014, reversing the gains it made in 2013. He said: “We lost out to the BBC who have been outspending everyone else. You expect that when it is coming up to discussions about the licence fee. But we did not get everything right ourselves.”

Last year’s X Factor audience was down, but although the latest season of Broadchurch was not as well received by some critics, Mr Crozier said its audience, at some 9.2 million including catch-up, had pretty much matched the first season.

He highlighted new dramas including Jekyll & Hyde, Arthur and George and The Forgotten, the upcoming launch of the new Thunderbirds are Go, and exclusive rights to the Rugby World Cup later this year as drivers to rebuild audiences on the main channel.

Despite ITV’s loss of the Champions League to BT Sport and not bidding for Match of the Day, which the BBC paid £85m to retain, he said it would still be bidding for sports rights.

Mr Crozier said: “The Premier League is now beyond the means of any terrestrial broadcaster. The latest deal, which represents a 0.6 per cent share of viewing, will account for 25 per cent of programming costs. With Match of the Day and the time it has to be broadcast we could not make the numbers add up to get a decent return on it.”

ITV Studios, the programme-making business in Britain and increasingly overseas, lifted earnings by 22 per cent to £162m and is likely to see £1bn of revenue this year.

Mr Crozier declined to talk specifically about its current takeover target, Talpa, which makes The Voice for BBC, but said he was very keen on production companies with formats that could be taken out into international markets.

ITV shares rose 12.7p to 234.5p – more than four times the level they were when Mr Crozier took charge.

Keith Bowman, at Hargreaves Lansdown, said: “Management is declaring victory on its five-year plan. A more balanced business, less reliant on volatile advertising revenues and the UK, has been created, with the next phase of its strategy now being pursued.”

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