Int’l sales, ads boost ITV profit

UK broadcaster ITV has reported a sharp rise in profit for the first half of this year, helped by an increase in ad revenue and a better-than-expected return from its in-house production arm.

Pre-tax profit grew by 86% to £204m (US$335m) in the six months to June 30, while total revenue was up 4% at £1.027bn.

The broadcasting and online department saw revenue increase to £887m from £861m in 2010.

Advertising revenue rose by 2% in H1, but after reporting the first drop in ad income for 18 months in May, the broadcaster warned it was set to fall 2% in July and 4% in August. The slump, however, is expected to end in September when revenue is forecast to be “broadly flat,” ITV said.

Meanwhile, in-house production unit ITV Studios (ITVS) saw overall revenue increase 4% year-on-year to £264m, up from £254m in 2010.

This was boosted in part by the growth of ITVS’s international operation, which led to an 11% rise in external revenue – commissions from outside ITV – to £140m. It has received 68 new commissions so far this year, with 29 from overseas broadcasters.

New formats include Holding Out for a Hero, Born to Shine and Simon Cowell’s Red or Black, while a US version of Prime Suspect is being coproduced with NBC and 15 international broadcasters have pre-bought rights to another copro, Julian Fellows’ Titanic.

The ITV Player VoD service, now available on Android and Apple devices and UK free-to-air satellite platform Freesat, saw the number of average monthly unique users grow by 19% to 10.8 million, and longform video views rose 64% to 180 million. This boosted online revenue by 33% to £16m.

ITV CEO Adam Crozier also announced plans to introduce the first micropayments system for the online player in January 2012, with a number of models expected to “test” what viewers were willing to pay for.

ITV’s net debt has been cut to £52m from £188m at the start of 2011 and a programme of cost-cutting across the organisation also helped results.

Crozier said the broadcaster was “making good progress” one year into its five-year transformation plan.

“Our plan to renew and refresh our content business is beginning to gain momentum under the new top team in ITV Studios as we invest in re-energising the creative pipeline and in developing and piloting new programmes,” he said. “While there’s still a long way to go, we’re starting to see potential in the level of new work coming through ITV Studios.

“We’re encouraged by our progress to date and the prospects for ITV in the medium to long term, although we remain cautious about both the TV advertising market and the economy.”

ITV also announced shareholders would receive an interim dividend of 0.4p, its first payment to shareholders since 2008.