Commercial broadcaster, ITV, has today announced a massive 49% increase in operating profit to £325 million for the year ending 31 December 2004, helped by a rise in net advertising revenue across the ITV brand.
Operating margin in 2004 grew by 45% year on year, with net cash inflow from operating activities hitting £321 million. Elsewhere, sponsorship revenue was up at £37 million for 2004.
In the broadcaster’s final year results, net advertising revenue across ITV1, ITV2, ITV3, the ITV News Channel and GMTV is up 4.7% year on year, at £1.588 million. Each of the top five advertiser categories, food, retail, entertainment, cars and finance were up in 2004, according to the broadcaster.
ITV’s multi-channel viewing share for 2004 remained at 2003’s level of 28.1%. The broadcaster earmarked ITV1 as driving digital performance, citing an increase of 27% in viewing share for 2004.
In the two months following the launch of ITV3, in November 2004, the combined ITV1, ITV2, ITV3 and ITV News Channel attracted a 45% share of all commercial impacts on UK television, compared to 44.7% in the same period in 2003.
Sir Peter Burt, chairman of ITV, attributes the strong growth of ITV2 and ITV3 to the rapid up-take of digital multi-channel television and in particular to the spectacular growth of Freeview.
Commenting on the results, Charles Allen, chief executive of ITV said: “ITV has had an outstanding first year, delivering substantial growth in turnover which combined with cost savings has delivered a 49% increase in pro forma operating profit. We have built a vibrant multi-channel proposition and have a clear strategy for future growth.”
ITV’s autumn schedule on ITV1 performed well with a strong line-up including another series of I’m A Celebrity…Get Me Out Of Here! in late November (see Improved Advertising Revenue Drives ITV Profits Up 59%).
Earlier this week, new figures released suggested that ITV1 struggled at the beginning of 2005, suffering a 10% drop in audience share over January and February. Audience figures show that ITV’s average audience share for 16-35 year olds in January and February was 17.4%, compared to 22.7% over the same period in 2004, a slip of 5.3% (see Slow Start To Year For ITV1).
However, the broadcaster remains optimistic about the coming year, with viewing figures for the first week of March revealing that ITV had achieved its second highest peak-time share of the year so far, with 31.3%.
Looking forward, ITV reports that revenues are up by £56 million for the first quarter of 2005, aided by a first time contribution from GMTV. ITV2 advertising revenues have also grown substantially in the quarter to March, up by a massive 90% on 2004.
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