ITV Announces Fall In Pre-Tax Profits
ITV has announced a fall in pre-tax profits of 28% year on year, to £91 million, for the six months ending June 30.
The commercial broadcaster’s revenues were up slightly, by 3%, to £1.03 billion.
It added that net advertising revenues dipped an estimated 1% in the first eight months but are likely to fall 20% in September. The total UK TV ad market is expected to be down 17% for the month.
ITV said in a statement: “On current estimates, the television advertising market has weakened in September, where tough year-on-year comparisons apply, given the Rugby World Cup in 2007. ITV estimates that ITV NAR for September will be down 20% with the total market down 17%.
“Whilst ITV has limited visibility on advertising revenues beyond September, ITV expects to outperform the total market over the full year.”
ITV is looking to increase its global annual revenues through organic growth and acquisition to a run-rate of £1 billion by the end of 2012.
The broadcaster has also set a new target of £35 million of cost savings by the end of 2010.
Online revenues, from sites including ITV.com and Friends Reunited, were up 6% year-on-year in the first six months.
Michael Grade, executive chairman of ITV, said: “As a result of the recent slowdown in the television advertising market, the board has taken some tough decisions which are reported here today.
“We are implementing a new cost efficiency plan which will deliver £35 million in additional annual savings by the end of 2010. We are taking a £1,600 million impairment charge on broadcasting goodwill and we are adjusting the turnaround targets for global content and online. We continue to work with regulators, making the case for an urgent reduction in ITV’s regulatory burden.
“ITV’s long-term goal remains to create greater value for shareholders in the digital world from our position as the UK’s favourite source of free entertainment.”
At the end of July, a leaked Ofcom blueprint suggested that ITV could be allowed to reduce its public service commitments, saving the company up to £40 million a year (see ITV Set To Reduce Public Service Role).
ITV: 020 7843 8000 www.itv.com