ITV announces Friends Reunited sale and half-yearly results
ITV has published its half-yearly results and announced the sale of Friends Reunited to Brightsolid for £25 million.
The commercial broadcaster reported a pre-tax loss of £105 million for the first six month of the year with advertising revenues falling 15% and overall revenue dropping 11% year on year to £909 million.
However, in what has been a big day for ITV, the broadcaster was unable to unveil its new chief executive and simply said that its hunt for Michael Grade’s replacement is progressing.
ITV had hoped to reveal its new chief executive along with its results today but it is thought the broadcaster is still undecided between a shortlist of four candidates, which are rumoured to include its chief operating officer John Cresswell, HMV’s chief Simon Fox, head of Apple Europe Pascal Cagni and the former BSkyB chief Tony Ball.
Michael Grade, who plans to stay on as non-executive chairman once he officially steps down from his role as chief executive, said the broadcaster’s rate of decline has begun to slow with ITV’s net television ad revenues predicted to be down 12% in the third quarter of 2009 and down just 7% in September.
The company was also pleased that its net debt remained at £728 million, despite analysts’ forecasts of deterioration.
However, ITV was forced to admit that its pension deficit now sits at £538 million, up significantly from £178 million at the end of 2008.
Grade said: “Our financial results for the half-year reflect the impact of the unprecedented downturn in television advertising, offset by the comprehensive action we are taking in mitigation.
“The rate of market decline has eased slightly in the second half and ITV continues to outperform the market.”
ITV confirmed that it still intends to sell SDN, the Freeview multiplex business that it acquired for £134 million in 2005, and Screenvision US.
The broadcaster’s online revenues double when assets that are being sold off, such as Friends Reunited, are stripped out.
ITV managed to offload the social network to Brightsolid, which is a subsidiary of Beano and Dandy publisher DC Thomson, for a substantial £10 million more than the £15 million reports suggested it would sell for.
Brightsolid has acquired all the assets of Friends Reunited, including a dating operation, genealogy business and social networking site.
The social networking part of the asset is the least profitable, however, Genes Reunited generates solid revenues through its subscription model and is continuing to grow beyond its current one million members.
ITV bought Friends Reunited in 2005 for an initial £120 million in cash and a three year performance-based deal worth around £55 million.