ITV sees profits boost from Euro 2016, Six Nations and Marcella
A THRIVING production arm brightened the financial picture for ITV as successful dramas and big sporting events helped it win more viewers.
It shrugged off a flat advertising performance to post a 9 per cent rise in half-year adjusted pre-tax profit to £425 million on 11 per cent higher revenue of £1.5 billion.
But despite forecasting annual revenue and earnings growth of at least 10 per cent in its ITV Studios business, it is looking to cut costs by £25 million in preparation for any economic uncertainty after the Brexit vote.
The FTSE 100 group has been boosted by a string of acquisitions including Mammoth Screen, the production company behind Poldark, and Talpa Media, the producer of The Voice.
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Revenue at ITV Studios jumped 31 per cent to £651 million.
Its coverage of the Six Nations Rugby and Euro 2016, as well as dramas including The Durrells and Marcella, helped its main channel score a 7 per cent rise in its share of viewing.
But it expects its summer viewing performance to come under pressure from the Olympic Games on BBC.
Net advertising revenue was flat at £838 million, with supermarket and traditional banking spending in decline while other sectors such as cars and leisure showed “good growth”.
ITV expects a 1 per cent drop in the nine months to the end of September but it expects to outperform the wider market.
Chief executive Adam Crozier said: “Our strategy of rebalancing and strengthening ITV and building a global production business of scale continues to deliver.
“On screen we’ve performed strongly and against a backdrop of wider economic uncertainty following the EU referendum we have put in place a robust plan to allow us to meet the opportunities and challenges ahead.”
He said advertising spend was starting to move back to television to reach big audiences tuning into major sporting events.
He added: “There is a growing understanding of what digital advertising can do, and more importantly, a growing understanding of what digital advertising can’t do. People are starting to realise that different media do different things.”
Crozier said the planned savings would be made across the board. ITV shares gained 12½p to 197¼p.
