Westhouse Securities has retained its 'add' rating and 133p target price for terrestrial broadcaster ITV, saying that the company's results for 2012 show a 'robust performance despite a challenging market backdrop'.

Revenues came in at £2,196m, up 3.0% year-on-year, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 13% to £520m, broadly in line with Westhouse's forecasts.

"We are pleased with this morning's results and comments on recent trading, which represent another step in the successful repositioning of ITV and provide a clear reminder of its powerful cash flow dynamics, resultant income growth prospects and acquisition firepower," said analyst Roddy Davidson.

"We also view a tight cost focus, high level of on-going investment in content/digital services and its unrivalled ability to deliver audience against a backdrop of media fragmentation as key positives," he said.

Westhouse acknowledged that ITV's performance against key performance indicators (KPIs) was mixed - "with those relating to share of viewing impacted by one off events such as the Queen's Jubilee and Olympics" - but increased total long form video requests and share of broadcast illustrates "the growing importance of digital platforms / the group's ability to charge premium advertising rates, respectively."

Davidson said that the stock's valuation - trading at 13.6 times earnings with a 2.3% dividend yield - is "undemanding" and he sees scope for an "extension of recent share price strength".

Shares, having already gained around 16% so far in 2013, were up 0.5% at 120.8p by 10:00 on Wednesday.

BC

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