ITV boosts profits, plans £300 million cash return

ITV boosts profits, plans £300 million cash return

	Published : Wed, 08 Mar 2006 15:20 By : James Rowe Print this Story

LONDON: ITV Plc., Britain's largest television broadcaster, posted 36 per cent increase in its 2005 pretax profits at 452 million pounds on higher revenues at its digital channels and lower licence fee payments to the government.

The company, which produced "Coronation Street" and "The X Factor," also announced a 300-million-pound stock buyback.

Revenues for the year grew 6 per cent to 2.18 billion pounds, though advertising revenues from the ITV1 channel fell 3.3 per cent to 1.46 billion pounds. However, growth in revenues from ITV2 and ITV3, along with consolidation of GMTV, ensured a 2.7 per cent growth in total advertising revenue.

The company has launched a series of digital channels on the Freeview platform and bought the Friends Reunited online business. It projected revenue of 250 million pounds in multichannel and interactive business by end 2008. It expects 50 per cent of its revenues from outside ITV1 by 2010.

It is also planning a new "participation TV" channel on digital, ITV Play, which it expects, will make 20 million pounds in profits in the first year.

Chief executive Charles Allen said with its future totally dependent on digital, the company is taking necessary steps to prepare for the complete switchover to a digital network as per deadline. "We have transformed ITV from an analogue, single channel federation to a multi-channel, multi-platform, content driven business firmly focused on the needs of viewers and advertisers," he said.

In June, regulator Ofcom had cut the company's licence fee by nearly two-thirds to about 80 million pounds, to account for the declining value of analogue broadcast spectrum. Britain is expected to go totally digital by 2012.

The company forecast a decline in revenue of up to 10 per cent in the first quarter of the current fiscal, due to the timing of major events this year. It said in 2006 both Easter and the Football World Cup fall in the second quarter and will move money into that period.

ITV has reached a four-year advertising agreement with Unilever, under which the latter will spend more than 200 million pounds in advertising on ITV channels.

The company raised its final dividend 38 per cent to 1.8 pence.

ITV shares closed at 110.75 pence, valuing the company at more than 4.5 billion pounds.