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ITV profits fall but World Cup and strong studio slate give confidence
ITV profits fell last year amid a squeeze on advertising sales, but new chief executive Carolyn McCall is very bullish about the year ahead and has begun a 'strategic refresh' of the group.
Adjusted operating profits were down 5% to £842m even as total external revenue rose 2% to £3.13bn, of which the ITV Studios production arm saw revenue up 13% to £1.58bn. Adjusted earnings per share fell 6% to 16.0p, which was above the 15.7p consensus.
Net advertising revenue was down 5% to £1.591bn "impacted by the uncertain economic environment" but is forecast to be positive in the first half of 2018, with the first quarter up 1% and growth in the second from the FIFA World Cup in Russia.
Confidence in the new year was reflected in a 10% hike to the final dividend to 5.28p, meaning the 7.8p total for the year was up 8%, with the previous year's special payout not repeated.
Within the total adjusted operating profits, ITV Studios was flat at £243m with strong underlying growth as the previous year was boosted by a strong contribution from the Chinese version of The Voice. Broadcast & Online profits were down 7% to £599m with a £81m decline in advertising partly offset by growth in high margin online and pay-TV plus cost savings.
Statutory profit before tax fell 10% to £500m and statutory EPS by 9% to 10.2p primarily due to the decline in earnings and higher amortisation and impairment of acquired assets.
McCall, who joined from Easyjet in January, insisted ITV's operational performance was strong in a challenging environment, with a 2% increase in share-of-viewing and 39% online and double-digit revenue growth in video on demand advertising and ITV Studios. "This gives us a solid foundation to build on for the next phase of ITV's development."
The strategic refresh "will enable us to define a clear strategy and priorities that will highlight the opportunities and address the challenges that we face in an increasingly competitive media landscape" and was said to be "well underway". She promised to report on the results of her strategy review at the interim results.
ITV has begun 2018 well, growing the viewing share and volume, at double-digits online, with a strong schedule as well as the World Cup, including Vanity Fair and Survival of the Fittest for ITV, Poldark, Bodyguard and Shetland for BBC, Living the Dream for Sky and internationally Love Island, The Voice, The Chase, Big Star's Little Star, Snowpiercer and Good Witch.
McCall said ITV Studios was seeing increasing demand for its formats and dramas, particularly in the UK and US, and has over 60% of this year's expected revenue already booked.
Adjusted operating profits were down 5% to £842m even as total external revenue rose 2% to £3.13bn, of which the ITV Studios production arm saw revenue up 13% to £1.58bn. Adjusted earnings per share fell 6% to 16.0p, which was above the 15.7p consensus.
Net advertising revenue was down 5% to £1.591bn "impacted by the uncertain economic environment" but is forecast to be positive in the first half of 2018, with the first quarter up 1% and growth in the second from the FIFA World Cup in Russia.
Confidence in the new year was reflected in a 10% hike to the final dividend to 5.28p, meaning the 7.8p total for the year was up 8%, with the previous year's special payout not repeated.
Within the total adjusted operating profits, ITV Studios was flat at £243m with strong underlying growth as the previous year was boosted by a strong contribution from the Chinese version of The Voice. Broadcast & Online profits were down 7% to £599m with a £81m decline in advertising partly offset by growth in high margin online and pay-TV plus cost savings.
Statutory profit before tax fell 10% to £500m and statutory EPS by 9% to 10.2p primarily due to the decline in earnings and higher amortisation and impairment of acquired assets.
McCall, who joined from Easyjet in January, insisted ITV's operational performance was strong in a challenging environment, with a 2% increase in share-of-viewing and 39% online and double-digit revenue growth in video on demand advertising and ITV Studios. "This gives us a solid foundation to build on for the next phase of ITV's development."
The strategic refresh "will enable us to define a clear strategy and priorities that will highlight the opportunities and address the challenges that we face in an increasingly competitive media landscape" and was said to be "well underway". She promised to report on the results of her strategy review at the interim results.
ITV has begun 2018 well, growing the viewing share and volume, at double-digits online, with a strong schedule as well as the World Cup, including Vanity Fair and Survival of the Fittest for ITV, Poldark, Bodyguard and Shetland for BBC, Living the Dream for Sky and internationally Love Island, The Voice, The Chase, Big Star's Little Star, Snowpiercer and Good Witch.
McCall said ITV Studios was seeing increasing demand for its formats and dramas, particularly in the UK and US, and has over 60% of this year's expected revenue already booked.
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