ITV profits leap 57 per cent

ITV put its recent ratings woes behind it today by unveiling a 57 per cent rise in profits in its first full-year results as a unified company.

ITV put its recent ratings woes behind it today by unveiling a 57 per cent rise in profits in its first full-year results as a unified company.

The broadcaster said a combination of rising turnover and lower costs since it was created by a merger of Granada and Carlton in February last year had contributed to the profits surge.

Advertising revenues in 2004 were 4.7 per cent higher at £1.59 billion and gains were made in all key sectors including retail, food, entertainment and finance.

Pre-tax profits of £340 million were ahead of the £282 million forecast by the City after ITV said cost savings from the merger were "ahead of expectations in both speed and amount".

Details emerged in the week that ITV1 suffered one of its worst-ever ratings slumps, with audiences for the first two months of 2005 down 10 per cent compared with a year ago.

According to the British Audience Research Bureau (Barb), ITV saw its audience share in January and February fall as low as 22.3 per cent from 24.6 per cent at the same stage of 2004.

ITV chief executive Charles Allen said today that 2005 had started strongly and first-quarter revenues across its stable of channels were £56 million ahead of a year earlier.

In addition to its main ITV terrestrial channel, the group also owns 75 per cent of the GMTV breakfast channel and has a trio of digital channels in ITV2, ITV3, the ITV News Channel.

Hit shows produced by ITV have included I'm A Celebrity...Get Me Out of Here! and the broadcaster said six of the top 10 ratings winners last year were shown on its channels.

Contract renewals with advertisers for 2005 have been pleasing, while Mr Allen reported that advertising revenues from ITV2 in the quarter to March were up 90 per cent.

The broadcaster also flagged a string of regulatory issues that are due to be resolved this year, including how much it must pay to hold a broadcast licence.

ITV1 paid a licence fee of £204 million this year but said this was too high compared to rival broadcasters such as Channel Five which paid less than £20 million.

Competition from new media such as broadband and mobiles meant existing regulation of the television industry needed to evolve at the same pace, while ITV said lessons could be learned from how advertising and sponsorship is managed in the US.

At the bottom-line, ITV said profits totalled £207 million after stripping out merger-related costs of £69 million that included redundancies and asset write-offs. Total turnover of £2.05 billion was 3 per cent higher than a year ago.