Broadcaster reports 16% rise in TV ad revenues thanks to hit shows such as The X Factor
ITV's adjusted pre-tax profit almost tripled last year to �321m thanks to a market-beating 16% surge in TV ad revenues, but its programme making division struggled as earnings dropped more than 10%, the network reported on Wednesday.
It reported total revenues up 10% to �2.06bn in 2010, fuelled by a 16% rise in TV ad revenues thanks to hit shows such as The X Factor and Downton Abbey.
ITV, which said that it planned to reinstate a dividend payment at its interim results in July, has seen its share price rise 2.6p, just over 3%, to 88p in early trading off the back of the positive results.
The broadcaster said that the strong market has continued into the first quarter with revenues on track to be up 12%, with April set to be up between 8% and 12% thanks to the Royal Wedding and Easter.
However, ITV warned on performance from the second quarter onwards, a point when the markets improved significantly in last year and events such as the World Cup provided a dramatic surge in advertiser spending.
Overall, revenues at ITV's broadcasting and online division grew by 14.7% to �1.77bn as earnings before interest, tax and amortisation more than tripled from �111m to �327m.
Despite ITV's strong performance the broadcaster's in-house production operation, ITV Studios, continues to struggle.
Revenues at ITV Studios fell 12.5% to �293m with earnings dropping by 11% to �81m. ITV said today that plans were afoot to bolster the division ? observers have pointed to the possible acquisition of a major production business like All3Media as an option ? with a five-year plan to increase the number of international production bases through partnership, investment or organic growth.
ITV said that it expects to invest �25m of a three-year, �75m investment fund in 2011. Of that �7m will go into the online operation, �12m in content and �6m for digital channels in a development fund.
ITV reduced net debt reduced significantly from �612m to �188m and the pension deficit has fallen from �436m to �313m.
ITV said that it had made �40m in cost savings last year and has identified �15m in "non-personnel" savings this year. The company has �860m in cash and cash equivalents on the balance sheet.
ITV's adjusted pre tax profit comfortably beat analyst consensus figures of about the �300m mark. Overall profit for the year rose considerably from �94m to �270m.
Source: http://www.guardian.co.uk/media/2011/mar/02/itv-profits-rise-advertising-revenue
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