ITV’s profit triples as TV ad revenues rise 16%

ITV saw its pre-tax profit almost triple last year to £321 million following a market-beating rise in TV ad revenues (up 16%).

The commercial broadcaster recorded a 10% increase in total revenues to £2.06 billion in 2010, due to a rise in TV ad revenues thanks to the ratings success of shows such as The X Factor and Downton Abbey.

As a result of today’s announcement, ITV saw its share price rise 2.6p, just over 3%, to 88p in early trading.

ITV said it expects Q1 2011 revenues to be up 12%, with April set to be up between 8% and 12% because of William and Kate’s Royal Wedding and Easter.

However, ITV warned that the positive results could change from the second quarter onwards.

Overall, revenues at ITV’s broadcasting and online division grew by 14.7% to £1.77 billion as earnings before interest, tax and amortisation more than tripled from £111 million to £327 million.

However, the broadcaster’s production arm ITV Studios continued to struggle. Revenues at ITV Studios fell 12.5% to £293 million at the same time as earnings slid by 11% to £81 million. Writing for Newsline today, Raymond Snoddy said: “The one deal that would be truly transformational in production terms for ITV would be the acquisition of All3Media and sometime around now it is due to become available for the right price.”

ITV said that it expects to invest £25 million of a three-year, £75 million investment fund this year. Of that £7 million will go into online, £12 million on content and £6 million on digital channels.

The broadcaster reduced its net debt reduced from £612 million to £188 million. ITV said that it had made £40 million in cost-savings last year and has identified £15 million in “non-personnel” savings this year.

Overall profit for the year increased from £94 million to £270 million.