UK’s ITV posts increase in profits on studio production unit

The country's largest commercial free-to-air television company reaps rewards from a shift away from advertising reliance as studio operations boost earnings.

An ITV studio in London,. The broadcaster has reported a rise in earnings. Neil Hall / Reuters

ITV, Britain’s biggest free-to-air commercial broadcaster, said it would pay a special dividend after growth in its studio production arm more than offset a drop in advertising revenue to result in a rise in earnings.

The broadcaster of the soap Coronation Street, which, starting in 1960, is Britain’s longest running, and the crime drama Broadchurch, has been building its production business and growing online revenue to reduce its reliance on broadcast adverting. ITV said 53 per cent of its revenues in 2016 came from sources outside traditional TV spot advertising.

“The continued growth in revenue and adjusted profit, despite a 3 per cent decline in spot advertising revenues resulting from wider political and economic uncertainty, is clear evidence that our strategy is working and remains the right one for ITV,” said the chief executive Adam Crozier.

The ad market remained tough at the start of 2017, with net advertising revenue across its channels forecast to be 6 per cent lower for the first four months, reflecting the current economic uncertainty in Britain, the company said.

ITV reported adjusted earnings per share of 17 pence, beating market forecasts, on total external revenue up 3 percent to £3.06 billion (Dh13.9bn), including currency benefits.

It said it would pay a special dividend of 20 pence a share, worth just over £200 million, on top of a final dividend of 4.8 pence, bring the total dividend for the year to 7.2 pence, up 20 per cent.

Analysts at Citi said the special dividend had not been widely expected and that the cash return signalled confidence in the future.

* Reuters

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