ITV eyes prodcos as profits rise

UK commercial broadcaster ITV will continue to hunt for acquisition opportunities after posting better-than-expected profits for the first half of the year.

ITV CEO Adam Crozier

ITV bettered analysts’ forecasts by reporting a 25% increase in adjusted profit before taxes to £391m (US$609m) for the first six months of 2015.

The firm’s production arm, ITV Studios, saw its first-half earnings grow by 18% (EBITA) to £85m, driven by acquisitions, with chief executive Adam Crozier noting that more than half the Studios’ revenue now comes from outside the UK.

“Reflecting our growth and increasing scale in key production markets in Europe and the US, 53% of ITV Studios total revenue in the first half was generated outside the UK,” he said.

In the US, ITVS has bought Gurney Productions, High Noon Entertainment, Leftfield Entertainment, DiGa Vision and Thinkfactory Media. In the UK, the company has this year alone acquired Poldark producer Mammoth Screen and indie Twofour, and also bought John de Mol’s Talpa Media in the Netherlands for US$530m.

Crozier said ITV would continue “to look for acquisition opportunities in line with our strategy… At the moment, we are in some ways a consolidator. I think the market will continue to consolidate, not just on the content side, but on the broadcast side.”

ITV’s drama hit Downton Abbey

However, the company did see a 4% drop in UK audience share for its bouquet of channels to 22.1%, its lowest in more than a decade. It continues the trend from last year, when Crozier said he would be prioritising an increase in viewership.

The CEO said that improving audience share “remains a key focus for the year,” adding: ”As previously stated, we expect to see improvements in [the second half] when we have exclusive rights to the Rugby World Cup as well as a strong slate of high quality drama including Jekyll & Hyde, Unforgotten and The Trials of Jimmy Rose.”

In a separate conference call today, Crozier said added that the BBC, ITV’s main terrestrial rival, needs to be “more distinctive” and should “act more as an enabler and a partner to the commercial sector rather than a competitor.”

His comments come as the UK pubcaster looks to create its fledgling production division, BBC Studios, that will make shows for third-party broadcasters.

“We think the BBC needs to be more distinctive,” Crozier added, ahead of the pubcaster’s Royal Charter review and renewal in 2016.

ITV’s flagship scripted show Downton Abbey is set to end after its sixth season later this year, but the broadcaster said there would be “a lot more money going into drama” along with new entertainment formats.

Crozier added: “Our outlook for the remainder of this year is unchanged and we expect to deliver another strong performance in 2015.”